Canada's economy grew 1% in the third quarter from higher government, household spending (www.cbc.ca)

submitted 7 months ago by Sunshine@lemmy.ca to c/canada@lemmy.ca

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[-] Showroom7561@lemmy.ca 4 points 7 months ago

Household spending rose as people spent money on new trucks, vans and sports vehicles

I have a hard time reconciling the fact that we have nearly half the country living paycheque to paycheque, with half also reporting that "rising prices are greatly impacting their ability to meet day-to-day expenses".

Yet enough people are buying vehicles they absolutely don't need in numbers great enough to impact our economy.

Can someone explain what's going on?

Are people struggling because they are mismanaging their finances, or are people “struggling” because they didn't buy that F150 to drive their kid to school in?

[-] eezeebee@lemmy.ca 6 points 7 months ago

"The top 20 per cent of Canadians hold more than two-thirds of the country's wealth"

https://www.cbc.ca/news/politics/canada-highest-level-income-inequality-recorded-1.7349077

[-] Showroom7561@lemmy.ca 3 points 7 months ago

That begs the question: What are multimillionaires doing with "trucks and vans"???

[-] eezeebee@lemmy.ca 4 points 7 months ago

I'd imagine raising families, since they can afford it.

[-] Showroom7561@lemmy.ca 2 points 7 months ago

That doesn't seem to be the case.

There have been numerous global studies showing an inverse relationship between income and fertility rates. Higher income usually equals lower fertility. And we even see this pattern when comparing developed (rich) countries to underdeveloped (poor) countries... the same can be said for education, with higher education typically meaning lower fertility rates.

Granted, these studies tend to cap the high-end of the income spectrum to around $100,000, which is near poverty in 2024, but I'd be interested in knowing if millionaires are actually having so many kids that they need to justify a ~~sports car~~ van.

[-] eezeebee@lemmy.ca 1 points 7 months ago

I think it's possible that generational wealth has become a factor in driving a larger wealth gap, especially looking at real estate.

I think there is a large reserve of boomer wealth that some millennials are starting to find themselves in possession of. Boomer parents' $50k bungalow is now worth $1mil. Their millenial kids still have a "work and have children mindset", vans and trucks are easily justified especially with those means. Maybe we'll see their grandkids slow down in having kids.

[-] sbv@sh.itjust.works 2 points 7 months ago

There's two ends of the spectrum. The bottom twenty percent who are screwed; the middle sixty who saw their effective income decrease enough that it hurts, but they still have some buying power; and the top twenty who can afford investments.

I'd guess that folks at the top end are buying vehicles for fun, while the majority of us are buying vehicles to get to work.