Economic Perspectives & Security in Alberta

Michelle Maroto | University of Alberta | maroto@ualberta.ca 

Lori Thorlakson | University of Alberta | thorlaks@ualberta.ca

June 12, 2020

Introduction

In fall 2019, Alberta had not yet faced the double economic impact of COVID-19 and the collapse of oil prices in  March of 2020. However, Alberta had already seen a year of rising unemployment rates, and since 2015, had  been in the historically unique position of higher average unemployment rates than the rest of Canada. Since  2015, oil prices had remained in historically low territory, with Western Canada Select trading at approximately  $42 a barrel.  

This research brief provides a snapshot of Albertans’ economic perceptions in the fall of 2019. Results come from the 2019 Viewpoint Alberta Study.1 The survey was in the field in October and November 2019. The results provide a comparison point for future data collection, as they allow for future consideration of how attitudes in the province changed after the 2020 oil price drops and COVID-19 economic shutdown.

Households in Alberta were struggling financially in fall 2019. Many Albertans also expressed  

pessimistic views about Alberta's economy and their expectations regarding upward mobility. 

Economic Perspectives

In fall 2019, most Albertans saw their personal financial situations as worse than in the past, and many expected their financial situations to continue to get worse in the future. Compared to 2018, 52% of Albertans reported worsening financial situations in 2019, 40% thought their situation was similar to the previous year, and only 8% thought their financial situations were improving (Figure 1, left panel). In the fall of 2019, few Albertans expected their financial situations to improve anytime soon. When asked about their household's financial situation for the upcoming year, 21% of respondents said that they expected it to be better than it is now, 40% expected it to be the same, and 39% thought that it would worsen (Figure 1, right panel).

Figure 1: Views of financial situations compared to last year and expectations for upcoming year

When asked to compare their opportunities for upward mobility to that of their parents, most respondents believed that they would have a harder time moving up the economic ladder than their parents. Sixty percent thought it would be a "little," "moderately," or "a great deal" harder. Only 22% thought that it would be at least a "little" easier (Figure 2).

Figure 2: Ability to move up economic ladder compared to parents

Perspectives on the economy were not very positive. Few Albertans thought that the economy was improving in 2019 (Figure 3). Only 11% of respondents thought that the economy was starting to recover, 40% thought it was neither improving nor declining, and 50% thought that it was getting worse.

Figure 3: Feelings about Alberta's economy

The survey asked respondents how much they agree or disagree with a series of statements regarding Alberta's economic future over the next decade. The question included a set of three positive feelings (contented, optimistic, and excited) and three more negative feelings (pessimistic, angry, and frightened). As Figure 4 shows, respondents more often reported negative feelings about Alberta's economic future. Forty-nine percent agreed that they felt pessimistic, 48% agreed that they felt angry, and 53% agreed that they felt frightened. With the more positive set of feelings, 16% of respondents agreed that they felt contented, 29% agreed that they felt optimistic, and 18% agreed that they felt excited.

Figure 4: Feelings about Alberta's economic future over the next 10 years

Negative perceptions dominated Albertans' views on the economic future of the province.

Economic Security

In 2019, Albertans reported that they were struggling in meeting their monthly expenses. Figure 5 presents  results from two survey questions. The first (left panel) asked respondents to evaluate their level of difficulty in  meeting expenses in recent months, and the second (right panel) asked if they would be able to accommodate  an emergency expense of $1,000 or greater through their income or money in their savings accounts.  

Two-thirds of respondents (68%) reported that it had been somewhat or very difficult to meet expenses over  recent months. Additionally, 67% of households felt that they would not be able to accommodate an emergency  expense of $1,000 or more through savings or income.

Figure 5: Ability to meet expenses and accommodate emergency expenses

Who is hurting?

Although most respondents reported that their financial situations in 2019 were worse than the previous year,  certain groups were especially likely to report worsening situations. Figure 6 presents the percentages of  respondents reporting worsening financial situations within gender, race, education, generation, and location of  residence groups.  

Women and white respondents were more likely than men and non-white respondents to report worsening  situations, as were Gen X and Silent/Baby Boomer respondents when compared to other age groups. Respondents with some post-secondary education were also more likely than those with more and less  education to report worsening situations. 

Figure 6: Worsening financial situations compared to previous year across groups

Expanding on the results in Figure 6, Figure 7 reports the percentage of respondents who indicated that it was somewhat or very difficult to meet expenses in recent months with results broken down by gender, race, education, generation, and location of residence groups. This figure shows disparities related to gender, education, generation, and location. Women were more likely than men to report difficulties in meeting expenses. Few differences were present between white and non-white respondents. Education appeared to make a difference: respondents with some post-secondary education had a harder time meeting expenses than those with more or less education. Looking across generations, Millennials and Gen Xers had the hardest time meeting expenses. Finally, rural respondents experienced more difficulties in meeting expenses than respondents living in urban or suburban areas.

Figure 7: Experiencing difficulties meeting expenses in recent months

Who are the optimists?

Although we found that a pessimistic economic outlook predominated across all demographics, some demographic groups were more optimistic than others. Figure 8 presents the percentage of respondents who indicated that they expected their financial situations to improve over the next year within gender, race, education, generation, and location groups. Figure 9 reports the percentage of respondents who somewhat or strongly agreed that they were optimistic about Alberta's economic future within gender, race, education, generation, and location groups.

Figure 8: Expecting financial situations to improve over the next year

Figure 9: Optimistic about Alberta's economic future

As highlighted by Figures 8 and 9, the youngest generations had the highest proportion of economic optimists. About a third of Generation Z (born since 1995) and Millennials (born between 1980 and 1994) reported that they expected their economic situation to improve in the next year. By comparison, only 17% of Gen X respondents, 12% of Baby Boomers, and 5% of the Silent Generation (born before 1944) shared this optimism. For the two youngest generations, this economic optimism also extended to their evaluation of Alberta’s economic prospects over the next ten years. We also found a slightly higher agreement with the statement that compared to their parents, it will be a little or moderately easier to move up the income ladder—a sentiment less frequently shared by their counterparts in the Gen X and Baby Boomer generations.

Methodology of the Viewpoint Alberta Survey

The Viewpoint Alberta Survey was conducted between October 22 and November 21, 2019. The survey was deployed online by Qualtrics. A copy of the survey questions can be found here: https://bit.ly/2PvQV2C. Qualtrics coordinates the survey with an online panel system that targets registered panelists who meet the demographic criteria for the survey. Survey data are based on 820 total responses (number varies across questions) with a 17-minute average completion time. The Viewpoint Alberta Survey was led by co-principal investigators Jared Wesley and Loleen Berdahl. It was funded by an Alberta-Saskatchewan Research Collaboration Grant from the Kule Institute for Advanced Study at the University of Alberta and the College of Arts and Science at the University of Saskatchewan.

Endnotes

1. The Viewpoint Alberta Survey was funded by an Alberta-Saskatchewan Research Collaboration Grant from the Kule Institute for Advanced Study (University of Alberta) and the College of Arts and Science (University of Saskatchewan). The survey was completed for the research team, led by co-principal investigators Loleen Berdahl and Jared J. Wesley. Neither the funding bodies nor the research team is responsible for the analyses or  interpretations presented here.