Canadians Shift Income Groups

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    Too often, an underlying assumption in the income inequality debate is that low- and high-income Canadians are the same people year in and year out. In reality, however, Canadians are not permanently stuck in certain income groups, says a study by the Fraser Institute. Over the course of their lives, the overwhelming majority of Canadians move up and down the income ladder. The study finds considerable upward relative mobility over all time periods, particularly for the bottom 20 per cent. In just five years, 79 per cent of Canadians who started in the bottom 20 per cent in 1993 had moved to a higher income group by 1998. After 10 years (1993 to 2003), 88 per cent in the lowest income group moved up at least one income group. The 19-year period (1993 to 2012) similarly had nearly nine of every 10 individuals (89 per cent) in the lowest income group moving up. The results show being in the lowest income group is generally a temporary experience and that upward mobility occurs fairly quickly in one’s life. The results also show that many of those initially in the bottom 20 per cent climbed high up the income ladder reaching the top income groups. Remarkably, nearly one in four (24 per cent) of the bottom 20 per cent in 1993 had reached the top 20 per cent by 2012, and nearly half (46 per cent) ended up in the top two income groups.