When it comes to improving their standard of living, young Canadians are facing an uphill battle. A new report, published by the Montreal Economic Institute (MEI), highlights the difficulties younger Canadians in many provinces are facing in achieving higher earnings and a better standard of living than their parents. The report highlights the range of factors contributing to these barriers to social and income mobility, pointing to housing and high youth unemployment.
“What we want is high social mobility, high absolute mobility, so that everyone is getting better off massively, and high relative mobility [compared to their parents] as well,” MEI senior economist, George Mason University economics professor, and one of the paper’s authors, Vincent Geloso, told The Hub. “On both of these metrics, Canada’s not doing as well…there’s been a mild decline in absolute mobility, and there is a definite decline overall to relative mobility.”
The paper defined social mobility as “the ability to earn more than one’s parents and climb up the socio-economic ladder.” In an ideal world, someone’s economic or social status is determined by their talents, efforts, and choices, not by their circumstances at birth.
Alberta emerged with the highest social mobility score, though it still barely managed a passing grade.
“Despite it being the top-ranking province, [Alberta] still has a relatively low score. It’s below 60 [out of 100],” said Geloso.
He blamed the province’s large number of regulated occupations, which he said included onerous qualifications, lengthy mandatory training, and high licensing fees.
B.C. ranked the second highest with an aggregate score of 52.7 out of 100. Researchers found exorbitant housing costs as the major social mobility barrier for the Pacific province.
“The thing really dragging down B.C. was entirely housing. Vancouver is an incredible city, but with such restrictions on land use, [the government is] making the supply of housing become so inelastic that every extra person in the city pushes up rent so much that it eats away the gains of migrating to this highly productive place,” he explained. “So you’re basically locking away opportunities for upward ascension.”
The MEI study—entitled “Barriers to Social Mobility across Canada”—used an aggregate score of natural and artificial barriers to rank all 10 Canadian provinces. Artificial barriers included regulations affecting “key goods” like childcare, housing, transport, food, and public school assignments, trapping poor families in underperforming, low-quality schools. Natural barriers (those out of the government’s control) included poverty at birth, childhood inequality, parental involvement, family stability, social capital, and incarceration rates.
The study found Ontario ranked in the middle of the pack at 46.9 out of 100.
“Inside Ontario, it’s very difficult to move to places of opportunity in Toronto, and reap the rewards from migrating to a place where productivity is much higher,” said Geloso, pointing to the province’s worsening housing crisis. “You’re massively reducing income mobility,” He also criticized what he called the province’s “dismal” school quality and taxes.
Geloso added that in the last three decades, Ontario has gone from being the exemplar of social mobility in Canada to being a province not worth emulating.
Coming in last, Quebec (39.7) had a range of artificial and natural barriers restricting its residents from climbing the socio-economic ladder.
“Quebec is at the bottom and that makes sense given how much [it] regulates occupations, which limits the ability to move between industries,” explained Geloso, adding that the province has gone on to regulate housing construction, land supply, and land use.
“Quebec has a horrible set of public policies with regard to mobility, especially if you pile on the taxes that end up discouraging effort and investment.”
Recent economic indicators suggest social mobility in Canada will continue to decline in the near future. Canada’s spiking emigration rates, prolonged sluggish GDP, record youth unemployment, and rising foodbank usage, as well as a steep decline in job openings, all suggest a tough slog for young Canadians trying to better their lot in life.
Geloso says economics literature shows time and time again that challenging formative years set one up for static or downward social mobility.
“If I compare you to your parents, and you have the misfortune of being born in a period of an economic downturn. It has lasting consequences.”
Graeme Gordon is The Hub's Senior Editor and Podcast Producer. He has worked as a journalist contributing to a variety of publications, including CBC,…
Comments (1)
The only reason you guys don’t achieve social mobility is because you trades risk for safety in the sense of being salaried employees, this changed for me once I decided that I wasn’t interested to work for half a gross -GST-PST , I then fired my employer and continued to do what I had been doing for over 30 years but not for humans.
Today I WFH , I own my IT infrastructure and my production has a waiting list for chosen customers. I get to work less for more money and no MBA drama. Oh and I was working paycheck to paycheck as an employee, now I’m in private banking , finished paying my plexes and most of what my corporation earns is tax free. Keep on working for abusive employers , you’ll get far in life