Sociologists' study

December 21, 2009

Average earners on the edge

U of C sociologists study impacts of financial crisis on middle-income families

Dr. Anne Gauthier
Canada Research Chair in Comparative Family Policy
Department of Sociology, University of Calgary

The global economic troubles that led to thousands of job cuts and painful recessions in Canada and the U.S. have created heightened vulnerability and anxiety within middle-income families, according to preliminary data from a University of Calgary-led study.

Often ignored by media reports and government programs, these “families in the middle” with yearly incomes between $50,000 and $90,000 are increasingly finding themselves without any savings or cushion should they lose their jobs or face unforeseen hardships. And with many people taking home less money due to lower salaries, fewer shifts and an end to boom-time bonuses, the wolf could be at the door sooner rather than later. “Most of these people are not secured,” says Anne Gauthier, Canada Research Chair in Comparative Family Policy in the U of C’s sociology department. “They currently have enough money to meet their basic needs, but if anything were to come up unexpectedly, they would be in serious trouble within weeks.”

Gauthier is directing an ongoing qualitative research project studying middle-income families in each of five Canadian cities—Calgary, Kelowna, B.C., Coquitlam, B.C., London, Ont., and Montreal—along with two American cities—Tacoma, Wash., and Upper Darby, Penn. The focus is on families with at least one child between the ages of 9-14.

While the study is expected to wrap up in January with analysis completed next June, financial demands of the holiday season are likely placing an additional strain on already tight budgets. Preliminary results from the study are showing a variety of strategies that these at-risk families are taking, including bringing in extra income by taking in children for daycare or after-school care, subletting the basement or extra rooms in the house and cutting all unnecessary spending. These financial frailties are leading to heightened anxiety and stress within families and are also impacting their children, where money for extra-curricular sports, clubs and activities is no longer there. Most of these families want their children to get a post-secondary education, though few have been able to set aside any money to pay for it.

“I think it would be a disaster if one of us loses our job,” said Susan, a married mother of two from Kelowna. “We’d likely have to sell a vehicle and really start to make some cutbacks—and I think the cutbacks would probably end up hitting the kids first.”

Researchers are particularly struck by their findings in Calgary, arguably the epicenter of the previous economic boom due to its leadership role in the oilpatch. “Before this study, we really didn’t know who the middle-income group was and how vulnerable they really are, and how little savings they have,” says Gauthier. “It looks as though the boom in Calgary possibly blinded people into taking on more debt than they should have, which is causing more problems,” says grad student Jamie Budd. “It seems particularly acute after such an unprecedented boom—one would have thought that people would have been able to save more.”

Researchers are still looking for families within the middle-income bracket who would like to be part of their study. Anyone interested should go to: http://soci.ucalgary.ca/fypp/research-projects/families-new-millennium

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