Is the Middle Class Doing Better in Canada?

A New York Times analysis purportedly showed that the U.S. middle class is declining relative to the middle class in other countries, especially Canadian.

This analysis shares a weakness with other such analyses: It measures cash disposable income, but does not include in-kind benefits. For both Canadians and Americans, healthcare comprises the biggest share of those benefits.

Americans with employer-based health benefits or Medicare receive significantly more “comprehensive” health benefits than Canadians do. On average, a Canadian patient waits 18.2 weeks between referral from a primary-care doctor to treatment by a specialist. This imposes a cost of over $1,000 per person in lost hours. Canadian patients also have significantly worse access to innovative prescription drugs, which imposes a measurable cost in loss of life.

Comments (11)

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  1. Martha B. says:

    The omission of healthcare in this report is a major oversight. And, if Canadian healthcare was such a great benefit (as many argue) then why is there a steady stream of Canadians traveling to the US border cities and further to get American health care?

    • Iris J. says:

      Is there a steady stream of Canadians traveling to the US border cities and further to get American health care? Give me data and facts.

  2. Tammy says:

    If the wait is 18.2 weeks in Canada, I wonder how long the wait will be with the new Affordable Care Act in place.

  3. arthurbeck says:

    Drugs are the big irony. Americans can get cheap mail-order prescriptions for mainstream drugs from Canada but to get the innovative, cutting edge drugs, Canadians must come to the U.S.

  4. Don Levit says:

    Health insurance should not be such a big part of the equation
    Imagine employers concerned about taxes to pay for family plans over $27,500
    Contact National Prosperity Life and Health and that issue will be a moot
    Don Levit

    • Arian says:

      I agree that in-kind benefits should not comprise a large part of the comparison. If you are comparing middle classes, disposable income should be the only threshold. Every single person has different jobs, which correlates to different benefits. I don’t think that healthcare would provide an accurate measure for comparison.

  5. Buster says:

    I always take these kinds of analysis with a grain of salt. The authors usually have a bias. They like European-style welfare states. They like bureaucracies where academic elites run the government and determine what is best for the people. Simply, they believe they should decide what the middle-class’ priorities are.

    A good friend met a Russian PhD-trained economist a few years back. He purported to be a communist — despite the fact he worked for an American company. Why would this guy — who was highly trained, living in America — support communism? Because under the Soviet system, he was the elite. He would be the guy who helped advise the government. Free markets may be good for entrepreneurs. But what about academics and elites who aren’t blessed with the business savvy and the desire to work 80 hours a week?

  6. Devon Herrick says:

    Nobel prize-winning economist James Buchanan told a similar anecdote 20 years ago when he spoke at University of Texas. He said many of his classmates at the University of Chicago started out as socialists. Most changed their minds but some remained socialists long after they understood how markets were a superior way to allocate goods and resources. The reason? Hhis fellow classmates wanted to be part of the bureaucracy that controlled the markets, rather than just being relegated to teaching students about them.

  7. Bob Hertz says:

    Point one, I agree with Buster that these cross company comparison are very hard to do.

    If you take an American state with a flourishing energy sector, few or no poor immigrants, and a cold climate (i.e. North Dakota), the average or median income will be right in line with Canada’s.

    Even Vermont which has no energy sector has the other two characteristics, and its incomes are very comparable.

    Why a cold climate? Because you cannot put 10 people in an unheated shack in ND, but it happens all the time in the Deep South and Southwest.

    I remember W. F. Buckley saying that incomes rise and crime rates fall in exact proportion to a state’s distance from Mexico.

    As for the health benefits?

    This is also tricky. The Canadian pays high sales taxes but no health premiums are taken out of his salary.

    The good thing for Canadians is that by the time they get their net salary, it is all theirs and not pledged to an insurance company.

    When I used to go to the Grand Canyon every year or two, there were a lot of Canadians there. (Germans and Swedes, too.)


    Longer vacations due to being in unions, and more income for travel and no medical debts and often no college debts.

    I have worked in the glorious private sector in the US for 25 years, and only once have I been able to take off a full two weeks. Americans often deal with incredibly
    stingy vacation policies.

    America is doing a lot of things wrong. The NYT article is clumsy but there are some real discepancies I fear.

    • John R. Graham says:

      In British Columbia, Alberta, and Ontario (and maybe one or two more provinces) premiums are deducted to pay for the single-payer health care (but they are a small fraction of the actual cost of the benefit).

      Pharmacy is a privately insured, employer-based, benefit in most provinces (for working age people).

      Dental and vision are privately insured, often employer-based, benefits in most provinces.