“On July 1, Canada Day, Canadians awoke to a startling, if pleasant, piece of news,” writes Canadian author Stephen Marche. “For the first time in recent history, the average Canadian is richer than the average American.”
His source is a recent study by Environics Analytics WealthScapes, which concluded that the average Canadian has a net worth of $363,202 to $319,970 for the average American. I figured I’d check that figure against other estimates. It turns out, if anything, it lowballs Canadians’ wealth advantage.
First, the Environics data measures only mean household wealth. Median wealth is probably a better metric for how the typical household is doing. And there, Canada is beating the United States by even more. Credit Suisse’s Global Wealth Report (pdf) found that in 2011, Canada had a median household wealth of $89,014 to $52,752 for the United States. Here’s how the countries featured in the report stack up (click for a bigger version):
So not only does Canada beat the United States on median net worth. Just about every developed country save Sweden and Denmark does. The UK, Japan, Italy (!) and Australia more than double the U.S. median.
One might think that this is an artifact of the financial crisis, which Canada weathered better than the United States. In particular, housing prices, as measured by the House Price Index in Canada and the Case-Shiller Index in the United States, fell by much less in Canada.
But a look at net worth before the crisis shows that Canada was ahead then too. Here’s how U.S. and Canadian median net worth looked in 2004 and 2005, respectively,(unfortunately, the two countries both only collect data every few years):
So Stephen Marche is wrong. The average Canadian is not wealthier than the average American for “the first time in recent history.” He’s been wealthier all along.