By Sam Pizzigati
We Americans tend not to pay much attention to our northern neighbors. Often, entire election cycles can come and go without anyone running for national office saying anything about Canada.
But that’s changing.
Canada now looms much larger in our politics, mainly because Canadians enjoy a health care system far superior to our own. Canada’s single-payer approach to health care has become — for many Americans — a guiding inspiration.
We need what Canadians have — in more ways than one. An innovative new report from the Canadian Centre for the Study of Living Standards finds that Canadians now enjoy higher incomes than their counterparts in the United States as well.
The new report challenges conventional economic wisdom on household well-being.
That wisdom, notes report author Simon Lapointe, typically defines well-being as “GDP per capita.” To calculate this yardstick, economists take the sum total of the goods and services a nation produces, divide that by the nation’s population, and tell us the resulting number measures how well a nation’s people are doing.
By this conventional measure, Americans are doing much better than Canadians. In 2016, the latest year with comparable stats available, GDP per capita in the United States ran over 20 percent higher than GDP in Canada, $57,798 to $47,294.
But GDP per capita can obscure reality as most households live it, especially in a deeply unequal society like the United States. American households certainly do rate as richer than Canadian on average. But “much greater incomes at the top of the income distribution” in the United States, explains the study, are inflating that average.
To remedy this statistical distortion, Lapointe divided the Canadian and U.S. populations “into 100 equal sized groups, ordered from lowest to highest income,” then compared the actual income for each “percentile” group.
The result? Well over half of Canadian households — 56 percent — turn out to be “better off than American households at the same point in the income distribution.”
At the 20th percentile, for instance, Canadian households pocketed $27,201 in 2016, some $3,786 more than the comparable U.S. household. At the 40th percentile, Canadian households made $1,871 more than similarly situated American households.
Rich American households, on the other hand, make much more than rich Canadian households. At the 100th percentile — the top 1 percent — U.S. households collected $711,801 in 2016, a stunning 57 percent more than Canadian top 1 percent households.
Lapointe would be the first to admit that his new research on comparative Canadian-U.S. household well-being has some significant limitations. His numbers, he acknowledges, only trace “money incomes before tax” and do not factor in “major government transfers in kind — public education, publicly funded health care, and publicly supported housing.”
What would happen if we did factor in these transfers? The lives average Canadians lead would appear even more economically secure, since Canadians today get much more substantial “transfers in kind” from their government than Americans do.
Higher taxes do, to be sure, accompany Canada’s more generous social benefits — but the rich in Canada pay taxes at higher rates than the rich in the United States. This would leave ordinary Canadians even further ahead of their American counterparts.
Let’s hope we hear a good bit more about Canada in the 2020 election campaign. We Americans have a lot to learn about how much more decent life in North America can be.
Sam Pizzigati co-edits Inequality.org for the Institute for Policy Studies. His latest book is The Case for a Maximum Wage.
Rick G says
I’ll await the comments from those who will scream SOCIALISM SOCIALISM and not realize that Canadians do have a better outcome on economics and health care.
Allen Flynn says
Where are your statistics regarding their outstanding healthcare? My understanding has been those Canadians who can afford it come to America for major procedures because the wait is horrendous in Canada and the quality is so much better here. Pharmaceuticals are much less expensive there however.
Was this considered? Convert from United States Dollar (USD) to Canadian Dollar (CAD)? https://themoneyconverter.com/USD/CAD
1 CAD = 0.759483 USD
1 USD = 1.31668 CAD
OIF Vet says
Sam… lost again.
Aside from Canada’s military.. with whom I have served with in an active war zone…
Canada is a joke.
Really? You have obviously never needed continued medical care in Canada.. it is a complete joke and not dissimilar to the DMV here in America, the greatest country on earth.
And, any group who would submit themselves, as a group, to the leadership of Justin Trudeau, are vastly inferior to us. He is a weasel and a joke…
I could easily write a 2K-word take down of everything you mentioned here… but you are too far gone.
Just hope the readers here enough common sense to see that you are a complete liberal hack.
Alphonse Abonte says
If one understands that socialism is not a share the wealth program, but is in reality a method to consolidate and control the wealth, the seeming paradox of super rich men promoting socialism becomes no paradox at all.
Instead ,it becomes logical,even the perfect tool of power seeking megalomaniacs.
Communism or more accurately socialism,is not a movement of the downtrodden masses, bt of the economic elite.
This article lacks balance. Here is a link that articulates the pros and cons:
Hmmmm, that must be why so many Canadians come the the USA for surgical procedures as well as MANY other MEDICAL reasons.
I like this story and ALL US citizens should take note. Yes, we should be more like Canada and tax the hell out of ALL of the rich people living here in the US instead of allowing them to skate by paying very little or no taxes using the loopholes in our tax system. Plus this money could pay for the social healthcare system similar to what Canada has but make it even better. Now once that is implemented how many of our RICH people will move from the US to some other country to avoid being tax well over 50%? Then who will be left to pay for the social healthcare system? It certainly won’t be our law makers in Washington as they have their own elite healthcare system along with many other perks that citizens could never afford.
We Could learn that Mr Wonderful Justin Trudeau has a history of displaying he is a Racist, a History being MORE than ONE occurrence, actually three separate instances …SO FAR.