StatsCan's latest report on household income gives the lie to the Harper government's claim that it knows how to manage the nation's economy. The Huffington Post reports that:
StatsCan’s latest analysis of income trends among families of two or more people found that 2011 “was the fourth consecutive year without significant change in after-tax income.”
Over the four years from 2007 to 2011, median income for families grew a tepid 1.9 per cent, to $68,000 from $66,700. That’s a growth rate of less than 0.5 per cent per year.
What it means is that consumers -- who the Royal Bank says are the "lynch pin" of the Canadian economy -- are tapped out. RBC predicts that:
Canada will see years of economic growth below the rates seen in the U.S., as Canadian consumers start to spend more cautiously and pay down their debt.
And government cutbacks are partially responsible for the loss of family income:
Part of what appears to be keeping Canadian incomes stagnant is declining transfer payments from government. StatsCan’s data found that the median amount of money transferred from the government to families -- things such as the child tax benefit, unemployment insurance, or welfare -- fell to $6,000 in 2011 from $6,700 in 2010.
Seniors saw their median government payments drop by $600 over the year.
The reason the United States went into deep recession in 2008 was that wealth was sucked to the top of the economic pyramid, while wealth at the much wider bottom of the pyramid dried up. Canada appears to be headed down the same path.