'It basically means nothing': Why some economists are skeptical of the term middle class

With an October federal election creeping closer, Canadians can expect to hear the term middle class tossed around by politicians on the campaign trail. But according to experts, it's not necessarily a useful term.

"It basically means nothing. It's a feeling," said Stephen Gordon, a Université Laval economics professor. "Politicians love that because they can never get called on it because if you feel like you're middle class, then you are."

Politicians use middle class as a catch-all term to reach the broadest segment of the population, he adds.

"It's become basically a talisman and it doesn't really have much meaning when it comes to data policy analysis."

The reason it works is simple: Canadians want to consider themselves middle class, Gordon says.

My instinct is to say I'm middle class, and I have to force myself to realize 'No, I'm not in the middle and I'm way in the top end of the distribution.'- Stephen Gordon, economics professor

"Everyone likes to think they're middle class," he told Cross Country Checkup. "No one likes to think they're superior; being called an elite is an insult. No one wants to think they're poor because that's low status."

The number of Canadians who believe they are middle class is changing, however. 

A 2018 poll conducted by Ekos Research for The Canadian Press suggests less than half (47 per cent) of Canadians consider themselves middle class — down from nearly 70 per cent in 2002.

Over the same period, the number of Canadians polled who self-identified as "poor" doubled from 5 to 10 per cent

"The most reasonable hypothesis about why is the fact that incomes have lagged in the middle of the income distribution," said Lars Osberg, economics professor at Dalhousie University.

"Many people will feel that they're not keeping up with what's going on at the top end of the income distribution."

The Organization for Economic Co-operation and Development defines a middle-class household income as 75 to 200 per cent of a country's median household income — a broad threshold.

The median annual income in 2017 for a single person living in Canada is $33,000. That number jumps to $92,700 for families. According to OECD numbers, 58 per cent of Canadians are firmly in the middle-income bracket.

High earners still middle class

That wide range of middle incomes makes it difficult to pin down exactly who politicians are targeting. 

"They mean it to be basically everybody who's not rich and poor," said Cristos Aivalis, a postdoctoral fellow at the University of Toronto studying labour movements in Canada.

"If we were to take 10 Canadians ... they'd probably apply [middle class] to everybody from two to nine," with the first and last poor and rich, respectively, he added.

Pointing to the Liberal government's middle-class tax cut, Gordon says while taxes did increase on the top 10 per cent of wage earners, the benefits to so-called middle-class families are less clear.

"The middle-class tax cut only kicks in at about the 50th or 60th percentiles, so it means that more than half of tax filers didn't receive any benefit and that includes the median — the 50th percentile — doesn't benefit," he said.

"So it was called the middle-class tax cut but the middle doesn't even get it."

According to the government's math, the average middle-class family is better off by $2,000 compared to the situation in 2015.

But Gordon says people receiving tax cuts, who are among Canada's top income brackets, may consider themselves middle class, too. That's something Gordon, a high earner himself, struggles with.

"My instinct is to say I'm middle class, and I have to force myself to realize 'No, I'm not in the middle and I'm way in the top end of the distribution."