Canadian Personal Finance Blog

Looking over at Stats Canada this week, you can see that they have published a report on the Income of Individuals for 2005. The article says:

The median total income of individuals amounted to $25,400 in 2005, up 1.9% from 2004 after adjusting for inflation. This is the largest annual increase in median total income of individuals since 2001. The median is the point where one half of incomes are higher and the other half are lower.

This is one of those, good news, and head scratching news. The good news is that the median total income has gone up by 1.9% so that is a good thing (it would be bad if it had gone down). The head scratcher part of it, is the question of just who is living on this income level?

The median employment income is a little higher at $26,300, but that again seems pretty darn low.

If you have a couple that together are making $52,600 that is a bit better, but again, that seems low.

Now let us bear in mind what the mathematical term Median actually means. Do not confuse Median for Mean or Arithmetic Average , which is:

Pardon me? Add all your numbers up and then divide it by the total number of numbers you added. This article does not mention Mean or Average income, it talks about Median.

What is Median?

Now THAT looks complicated doesn’t it? OK, what Median is, simply is the middle value in a list of numbers. This middle number may be nowhere near the average of all of the numbers, so this Median means half of all Canadians either make or earn less than $25,400.00 and half earn more than that.

What does this number mean, in my opinion is that the gap between the “haves” and “have nots” is widening at an alarming rate these days.

Well, I had to chuckle watching Oprah yesterday, when she had all of these folks on talking about how America isn’t a classless society, and that the “American Dream” that any little boy or girl can grow up to be President (or better still a CEO who resigns for $210M) is dead.

Doesn’t Oprah read this blog? I posted an article a while back about how the gap between the RICH and the POOR (in Canada at least) is definitely widening. Oprah’s glances of shock and surprise about how 1% of Americans control 40% of the wealth and that these rich folk, live lives that most Americans would never dream of, were classic “Theatre Fou”. She had a Johnson & Johnson heir who makes films (and is supported by his family) about how this Class Gap exists, and Oprah asked, “Do you think you’ll get cut out of the will for this?”, I almost fell off my couch laughing. At least this heir was honest enough to say, “I hope not”.

The fact that Oprah was talking about this was the “Coup de Grace” on this, one of the richest women in America and most powerful, talking about how folks can’t get ahead. She did it, yet she laments others can’t? There is a dichotomy there, but I am not sure what it is. Is she saying she was “lucky”, and that she is an exception? Not sure.

Truth: There are incredibly rich People in Canada and America, who have never had to work a day in their lives to “earn” it. CEO’s in most fortune 500 companies make more in 1 day than a great deal of average households do all year. The working poor are increasing as a percentage of the total population.

I think most folks “get” this, but I didn’t really get the sense that their was a resolution to the expose that Oprah was doing, it was simply exposing that their is a Class Society in America (wish that was the Daily Double question).

How can you change it? Give opportunities to the less fortunate? Make sure our education system gives kids opportunities, instead of frustrating them and causing them to drop out? Make Universities available and affordable for EVERYONE? These are a start, but not pious rants about how TERRIBLE it is, that is for sure (much like this one). There is your dichotomy from me (he complains yet does not offer any concrete solutions). I should run for office.