Job Losses and the Middle Class: Canada and the USA, and the Possible Role of ICT

This chapter examines several key issues in the “polarization” debate. Should one be using wage or income data, and before or after income tax? How refined are aggregate countrywide job classifications when job tasks essentially differ by firms? Is polarization a universal phenomenon, or is it either a US issue or an ICT life cycle issue with other countries lagging the US experience? How are polarization and aggregate productivity related? Canada–US comparisons are used to examine whether recent job losses in the Canadian middle-class mirrors US experience. The role of Information and Communications Technology (ICT) in such “polarization” is discussed. Canadian data at least until 2013 do not show the “hollowing out of the middle class.” However, because Canada lags the US’s ICT rollout, it may be too early to be sure that polarization will not occur in Canada in the future.