For decades, the United States boasted the honor of having the richest middle class. However, as of 2015, Canada has the wealthiest middle class of any country in the world.

The most common figure used by researchers and economics professors when comparing middle class economies across different countries is median annual income, standardized to U.S. dollars. In 1980, the U.S. was the only country in the world with a median annual income above $15,000; Canada was second at just over $14,000, while developed European countries such as Britain, the Netherlands, Norway, Sweden and France all hovered around the $10,000 mark. Some of these countries, such as Norway and the Netherlands, began making steady gains on the U.S. beginning in the 1980s, while others, such as Canada, mostly tracked the U.S.' middle class growth until the late 2000s, when they started making large gains on the world's superpower.

While the middle class incomes of Canada and most Western European countries continued to rise, even during the deep global recession that began in 2009, the U.S. saw its median annual income fall during the late 2000s and early 2010s. The only other aforementioned country to experience a similar decline was Britain. The middle class in Canada, on the other hand, continued to amass wealth robustly during the recession, albeit at a slightly slower pace than in years prior.

As of 2013, the U.S.' economy is still over nine times larger than Canada's. The U.S. gross domestic product (GDP) that year was over $16.8 trillion, while that of its northern neighbor came in at only $1.8 trillion. Middle class citizens in the U.S. haven't reaped much benefit from their country's economic prosperity during the 21st century. The wealthy have benefited from most of the post-2000 wage growth in the U.S., while middle-class and lower-class wages have stagnated and even declined.

Several factors have allowed Canada to pass the U.S. in middle class prosperity. First, American educational attainment has dropped precipitously in comparison to other developed countries. While Americans over 55 are highly educated and literate compared to their Canadian and European counterparts, the same cannot be said for those in the 16- to 24-year-old age bracket, who rank near the bottom for all rich countries in educational attainment.

Additionally, the private sector wage gap between high-level executives and entry-level workers is massive in the U.S., especially when compared to Canada and developed European countries. This is why economic indicators such as GDP can be misleading when trying to discern which country's citizens are doing the best economically. The U.S. boasts impressive economic numbers, but a large number of its citizens do not benefit from them.

Finally, the U.S. government takes more of a laissez-faire approach toward promoting income equality than the Canadian and European governments, which redistribute wealth much more proactively. The result is a much smaller gap between rich and poor in countries such as Canada, which translates to a more robust and prosperous middle class.

  1. What is the difference between Class A shares and other common shares of company's ...

    Discover how a company can break down its common stock into multiple classes and how these classes differ from one another ... Read Answer >>
  2. Is the upfront cost of Class A mutual fund shares worth it?

    Learn about the differences between mutual fund share classes, and discover under what circumstances the Class A shares make ... Read Answer >>
  3. What emerging markets are best suited for investing in the aerospace sector?

    Discover the best emerging markets suited for investing in the aerospace sector and how middle class growth best positions ... Read Answer >>
  4. How does the landscape of the financial services sector in the U.S. compare to Canada?

    Read about the financial services sector in the United States and Canada, two countries that represent each other's largest ... Read Answer >>
Related Articles
  1. Insights

    Slip Slidin' Away: America's Shrinking Middle Class

    A new study from the Pew Research Center provides evidence that the American middle class is shrinking.
  2. Personal Finance

    Which Income Class Are You?

    Which income class do you belong to and what defines the middle class?
  3. Investing

    China's Middle Class: An Inside Look

    Discover the catalysts for China's improving middle class population, from global demands of its consumer goods to unoccupied real estate.
  4. Trading

    Why the American Middle Class is Shrinking

    Discover why the American middle class is shrinking and why that is probably good thing, although the Fed might be funneling growth to the ultra-wealthy.
  5. Insurance

    6 Signs That You've Made It to the Middle Class

    If you can check off each of these points, you are likely a member of the middle class.
  6. Investing

    What are Class B Shares?

    Class B shares are one classification of common stock issued by corporations.
  7. Trading

    The Canadian Dollar: What Every Forex Trader Needs To Know

    Canada is becoming an increasingly viable alternative to the U.S. dollar, making it more important in the forex market.
  8. Investing

    Norway, the Safest Oil Economy?

    Norway is one of the most stable oil-producing countries in the world. But for how much longer?
  9. Investing

    Low Oil Prices Are Forcing Economies to Diversify

    The impact of low oil prices goes beyond the pump. Here's how some countries are diversifying away from oil-based economies.
  10. Insights

    Globalization: Progress Or Profiteering?

    Proponents of globalization argue that it helps the economies of developing nations and makes goods cheaper, while critics say that globalization reduces domestic jobs and exploits foreign workers. ...
  1. Share Class

    A designation applied to a specified type of security such as ...
  2. Class B Shares

    A classification of common stock that may be accompanied by more ...
  3. Dual-Class Ownership

    A type of share division in which companies issue shares that ...
  4. Complex Capital Structure

    The use of different forms of securities rather than relying ...
  5. Institutional Shares

    Institutional shares are a class of mutual fund shares available ...
  6. Staggered Board

    A staggered board consists of a board of directors whose members ...
Hot Definitions
  1. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  2. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  3. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  4. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  5. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  6. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
Trading Center