Since the 2008 financial crisis, household income and household wealth in OECD countries has declined, unemployment is up and people’s optimism about where they’ll be in five years has taken a hit.
At the same time, civic engagement is suffering, with confidence in government in decline around the globe, according to a study by the Organization for Economic Development.
The How’s Life 2013 report takes the measure of economic, health and social well-being in the 35 OECD countries.
Canada comes out well in the study, placing among the best countries in the world for income and wealth, employment, health status, housing, education expectancy and attainment, work-life balance and personal security.
There is no ranking, but Canada, which took less of a hit than European countries from the financial crisis, is in the top category with Australia, Sweden, Switzerland, Denmark, the U.S. and Norway.
'In countries most hit by the crisis, the people have lost trust in their institutions to actually help them and solve their problems'- OECD statistician Martine Durand
Between 2007 and 2009, real GDP per capita in the OECD declined by 2.5 per cent and in the following two years, increased by just one per cent a year.
In the eurozone, where the financial crisis toppled banks and threw thousands out of work, household net incomes were down in a range from 3 per cent in Italy to 10 per cent in Greece.
The study noted the ways people compensated for declining wealth, including sharing households and declaring bankruptcy, Europeans reported increased work/life stress as they struggled to get by.
At the same time, citizens lost all confidence that their governments could fix the problems, the report said.
"In countries most hit by the crisis, the people have lost trust in their institutions to actually help them and solve their problems," said Martine Durand, the chief statistician of the Organization for Economic Cooperation and Development.
Declining trust in government
The percentage of people that trust national government declined in the United States from 50 per cent in 2009 to 35 per cent in 2012, ahead of the partial shutdown of the U.S. government this fall.
Among the 14 EU countries that are members of the OECD, the proportion who trust government fell from 49.1 per cent to 42.8 per cent over the same period.
In Greece, which has faced deep austerity cuts and high employment, as well as a decline in social services, distrust was high.
"In Greece, the percentage of people reporting that they trust the government fell from 38 per cent to 13 per cent," said Durand. "So you can sort of see the distrust in institutions between 2007 and 2012."
Increased income inequality in Canada
In Canada, the OECD noted that average disposable income was relatively resilient in the 2007 to 2011 period, but it said there was increasing income inequality in household net earnings with more lower-income households declaring insolvency.
In Canada, as in most of the OECD nations, people’s expectations of where they would be in five years was pessimistic.
The OECD said “the average Canadian household has been affected by the crisis, with impacts that are particularly visible when looking at household income, jobs, life satisfaction and civic engagement.”
Canadians reported their trust the government slid to 52 per cent last year from 64 per cent in 2007. However, there was an increase in time spent volunteering and helping others.
The report sought to measure the quality of life beyond purely financial parameters such as gross domestic product. Issues like housing, health, personal security, education and social connections were all assessed. It uses economic data from government sources, as well as surveys performed over the last four years in OECD nations.