By Dorothy Dobbie
There has been a lot said and written about the state of the middle class, with some people claiming that we are worse off now than we were 30 years ago. Whether or not that is the case or just a feeling people have is a matter of debate. But there is no doubt that we have more and expect more than we used to.
Think back to 1984. It certainly hadn’t lived up to George Orwell’s predictions in his book, Nineteen Eighty-Four. Families typically had one television set, one telephone and one car. Today, there is a television set in every room, everyone has a personal telephone (which costs a lot more to run than the old landline did), and there are two cars in many, many, middle class homeowners’ driveways.
14 per cent mortgage rates
In 1984, only the upper middle classes had more than one bathroom. The average price of a house in Canada was $76,000 but the interest rate in 1984 was just over 14 per cent. Making payments of about $900 a month for 30 years meant that you would have paid $324,000 for that home; that’s considerably more than a $250,000 home at three per cent would cost you on a fixed 30-year mortgage, making monthly payments of about $1,000 today.
Houses have also become bigger in cities such as Winnipeg (although they have shrunk in downtown Toronto and Vancouver). Back in 1984, the average middle class home was around 1,000 to 1,500 square feet. Today the range is closer to 2,000 square feet.
Poverty rates, too, have fallen statistically, and though the poor are often very poor indeed, even they often have cell phones and most have televisions.
Back in 1984, nobody had computers – well, very few did. Now most middle class homes have two and sometimes more. Some have already abandoned their desk and laptops in favour of tablets (one in four Canadians owns a tablet), while more and more often the tablet and phone have been merged into a single, larger device.
As for our automobiles, Scotia Bank predicts a surge in new car sales this year, noting that Canadians now spend about 4.3 per cent of their disposable income on new cars, down from 5.8 per cent just a decade ago. The average age of Canadian cars is nine years.
Last year about 12 per cent of the population went south in March with Manitobans spending an average of $3,200 each, according to CIBC. We holiday in the summer, too, spending about $1,700 last year.
So it seems the Canadian middle class has lots of stuff and enjoys the luxury of travel for leisure, indicating a high sense of entitlement: we deserve it, don’t we? But can we afford it? That’s the pressing question. In 1984, the average household debt was a whopping 66 per cent of annual disposable income. Today? That number is 164 per cent! Most of that is tied up in mortgages.
Still, the net worth of Canadians continues to climb – to $212,000 per capita in 2013.