Recession at the household level

According to national growth figures in Canada the recession is over and recovery is well underway. But do national trends give a clear indication of the state of families, households and individuals?

Yesterday the Vanier Institute of the Family released The Current State of Canadian Family Finances 2009 Report. As part of the Family Finances series, this report discusses the financial status of Canadian families based on household income, debt, employment patterns and living expenses. The 2009 Report contains an entire section illustrating the impacts of the recession on families, stating that it will be a long time before recovery fully reaches Canadians households.

Employment rates are a major indictor of the impacts of the recession. From October 2008 to July 2009, over 400,000 jobs were eliminated. Unemployment rose from a record low of 6.2% to 8.6% in the summer, and only falling slightly to 8.5% by the end of 2009.

Closely related is the aggregate or total Canadian wage level. Due to rising unemployment, total wage levels, which had been steadily increasing before the end of 2008, decreased. From annual rises of 6 to 7% in the years leading up to 2008, the total wage level for 2009 was 1% lower than the previous year.

Finally, indicators of household debt and bankruptcy reveal some of the struggles within Canadian households during these hard economic times. The frequency of reported delinquencies in terms of mortgage and credit card payments rose significantly in the last year, 50% and 40% respectively.

As economic recovery continues at the national level, it is important not to forget the struggles that persist at the household level. While increases in national growth are a good sign for Canada as a whole, it does not reflect the economic challenges that continue to plague Canadian households.