Mintz points out that it wasn’t all that long ago that we were much poorer than the Americans. Just think back to the 1980s when our dollar was worth 69 American cents, inflation was raging, our real wages were dropping and our productivity was . . . well it was just embarrassing. “From 1987 to 1997 in particular, we had terrible economic growth,” says Mintz. “By the time we reached 1999, we were way behind the U.S. in per capita incomes and everything else.” Back then, he notes, the newspapers were packed with dire warnings of brain drain. Canadian incomes were so low compared to Americans, our best and brightest were fleeing the country.
Today, it’s the reverse, and families such as Eric Nay, his wife, Polly, and their son are moving the other way. Nay, who’s 41 and now works as associate dean at the Ontario College of Art & Design in Toronto, says he packed his bags and left his home in tony Monterey, Calif., for a new life in Canada two years ago. And get this: he did it for a bigger paycheque. “The academic salaries here are much higher,” he says. “When I was working as an assistant professor in California, I was making $55,000, but in Canada, that magically becomes $70,000.”
How did this happen? Canada often comes out ahead when you look at squishy things like quality of life. But since when were we richer? Mintz credits the rising loonie, the boom in commodities, and better public policy. He says that over the past decade productivity growth in the U.S. has slowed, while we’ve been hacking away at our government debt and lowering taxes. In short, as a nation, we’ve been doing everything right, while the U.S. has been doing everything wrong.
When you look at how individual Canadian and American families make and spend their money, it gets even more interesting. The numbers show that our median household incomes are about the same, or at least they were back in 2005 when the most recent figures came out. That year the median household income in Canada was about US$44,300, after you adjust it for the exchange rate and our lower purchasing power, while the American median was US$46,300. Since then, the loonie has gained on the U.S. dollar, so we’ve likely narrowed the gap. But while our incomes may be similar to American incomes, we’re still much wealthier because we have less debt. What you make isn’t a good measure of how rich you are — to figure out your true wealth you should add up everything you have and subtract what you owe. And Americans owe more. A lot more. Here in Canada the average amount of personal debt per person is US$23,460. In the U.S. it’s a whopping US$40,250. And all those numbers are from 2005, just before their housing market slipped into a sinkhole. If you looked at the numbers now, you’d find that Americans are even further behind, because their largest asset — their home — is worth less. “There has been a lot of destruction of wealth in the U.S. over the past few years,” says Mintz, “and that would affect the net worth figures significantly. I would suspect that they would be even worse off today.”
