Why the U.S. middle class is falling behind Canada’s

http://www.cbsnews.com/news/why-the-us-middle-class-is-falling-behind-canadas/

By/Aimee Picchi/MoneyWatch/April 23, 2014

The economic backbone of the U.S. -- its middle class -- has lost ground over the past decade, thanks to wage stagnation and a greater distribution of wealth going to top earners.

An analysis of data by The New York Times finds that after-tax middle-class incomes in Canada have pulled ahead of American middle-class earners. On top of that, the poor in some European countries actually earn more than the poor in America.

While the report confirms what many Americans feel every day when they check their bank accounts -- that they're barely treading water -- the eye-opener is how far the U.S. consumer has fallen when compared with other countries. Median per capital income in the U.S. has barely budged since 2000, while Canadians have seen their median income jump 20 percent

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So how did Canada surpass the U.S. middle class? For one, younger Americans are losing ground in educational attainment when compared with their peers in Canada and other countries, the study found.

But America's growing income inequality is also posing a problem for the middle class. While it's difficult to find recent comparisons across countries for CEO-to-worker pay ratios, the ratio in America is at least double that of other countries, Mishel notes. The disparity between the average U.S. worker's income and CEO pay has also been growing wider, with CEOs pulling in a 331-to-1 ratio in 2013, up from a 46-to-1 ratio in 1983.

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America's poor are also dragging behind other the poor of other countries. People at the 20th percentile in Netherlands and Canada earned 15 percent more income than someone in the same percentile in the U.S., The New York Times found.

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