February 28, 2007

Stagnant family incomes

Canadian family incomes are stuck. You probably know this already. Here are the disheartening facts.

Statistics Canada reported that over the 20 years from 1980 to 2000, median family income grew from about $51,698 to $55,016. (The median is the midpoint: half the families earned less and half earned more.)

Adjusting for inflation, the annual growth over two decades was only 0.31%. Over the last decade, the growth was 0.08%. That's not much. We're keeping pace with inflation, but that's about it.

The Future
We're at risk of falling behind financially. There isn't much that can be done about this problem. Demanding higher wages doesn't work when there's pressure to drive prices down due to retailers like Wal-Mart and lower cost producers like China.

If family income is stagnant, then how likely are we to save for retirement or other needs. Lottery tickets aren't the solution ;)

So what can you do? That's a really tough question. Higher income comes from
  • higher education
  • switching jobs or careers
  • switching employers
  • becoming an entrepreneur
None of these choices is easy. But neither is life. My bias is towards improving skills. You can't go wrong by getting better no matter what you do :)


Anonymous said...

Increased incomes come from increased productivity. Thats all, Canada's record s very weak in that respect.

Promod said...

Thanks for the comment.

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