Are 60% of Canadians Really Living Paycheck to Paycheck?

Much media attention has been given to a recent poll by the Canadian Payroll Association, which (among other things)claims that 59% of respondents would find it financially difficult if their paycheck was delayed by a week. This story has been picked up by several newspapers, but my question is: can we trust the interpretations of the data?

Taking a look at the actual poll from the Canadian Payroll Association, I’m left with a lot of questions about the data-set used to come up with the numbers, especially in connection with Canada’s workforce. For example, though women make up roughly half of the Canadian workforce, they account for 73% of those surveyed. Not that this deters from the findings in relation to an individual who is concerned about his or her financial wellbeing, but it does raise the question of whether this is an accurate representation of Canadian workers or not.

A second issue I have with the survey is that there is no breakdown of industry. Knowing what workers were polled would give greater insight into the demographic validity of the survey.  A disproportionate number of steel workers, for example, could very easily skew the findings. The closest question is about respondants’ position within their organization, in which case we can see that 66% are in non-management rolls. 

My problems with the demographics continues in regard to the geographic location of those polled. Though Alberta, for example, makes up only 11% of the Canadian workforce, workers from Alberta make up 32% of the survey data. On the flip-side of this is the fact that workers in Ontario and Quebec make up 38% and 23% of the workforce, yet only make up 27% and 8% of the survey respectively.

I’m also a bit unsure of how to interpret to what degree a financially troubling situation is. Michael James on Money raised this point in a recent article, and looking at the survey gives us no help. We are left wondering what each respondent’s thought was when she or he answered.

The actual question is “If your pay cheque was delayed for a week how difficult would it be to meet your current financial obligations?” The 59% number is actually the sum of 3 possible answers: very difficult, difficult and somewhat difficult. “Somewhat difficult” sounds more like the annoyance that is talked about in the linked article above.  

Beyond the question of ‘what is difficulty’ I am also wondering what a ‘financial obligation’ is. I could give myself the financial obligation to put a certain amount of my paycheck to a retirement plan, but it wouldn’t be the end of the world if I skipped a week, or pulled from savings to make that RRSP contribution.

So can we trust the numbers? I  say yes and no.

Though I don’t think we can take the survey and say with accuracy that 60% of Canadian workers are living paycheck to paycheck, I do think we can probably take the numbers as an indication that there is a high proportion of Canadian workers that could find themselves in financial difficulty. Whether the real number is 60% or 40% is not important; the survey is a pointer to a problem.

I do think there are some interesting points in the survey though. While there is a general feeling of worry on one hand, 68% received a wage increase in the last year (though it may or may not have matched inflation), 62% of those surveyed expect a wage increase within the next year, 92% feel confident that their taxes and benefit deductions are accurate, and 67% feel the economy in their town or city will improve over the next year.

Another great thing about reading the actual survey is the inclusion of a select number of actual responses. Reading those comments from people makes you realize that there is a large number of people who are worried about debt, housing and their children’s education. And that is far more important that any numbers game.

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4 responses to “Are 60% of Canadians Really Living Paycheck to Paycheck?

  1. Kevin@InvestItWisely

    There are lies, damn lies, and then there are statistics. 😉

    Given the propensity of many people to go into debt, I don’t doubt that at least some are only a c0uple paychecks away from trouble…

  2. I don’t doubt that there are a lot of people who are only a paycheck or two away from trouble, Kevin. I agree with you completely.

    I just can’t believe that for every 10 of my family and friends, approximately 6 are so close to said trouble.

    By the way, statistics never lie… three out of four dentists agree 😉

  3. Pingback: Canadian Finance Carnival #2 - Canadian Finance Blog

  4. But these figures are skewed since many are living paycheck to paycheck but are not renters and are homeowners. These people are really not all that broke in the truest sense of the term in that they have significant equity in their home.

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