What Happens When Voters Don’t Believe in Economic Growth Anymore?
Canada’s politics are becoming less about left versus right and more about young versus old
Canada’s politics may be shifting along a generational divide rather than a traditional left-versus-right one. Mike Moffatt and Sabrina Maddeaux explore how aging voters, rising asset prices, housing affordability, and a growing sense of economic exclusion are changing what Canadians want from government.
They examine the difference between “pocketbook” politics and broader economic growth, and ask what happens when more voters feel they have little personal stake in a growing economy. The result could be a more zero-sum political culture, rising support for radical change, and growing tension between older and younger generations.
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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.
Sabrina Maddeaux: Twitter isn’t the real world, but it occasionally bleeds into it. Recently, a tweet went viral arguing that voting should be limited to working-age people in order to ensure decisions are made by “people with a stake in the future.”
Mike, I saw your recent piece in The Globe and Mail on this. You were super clear that you completely disagree with the idea, but you did think it highlights a bigger issue in Canada that we’re just not talking about. Can you break that down for us? Because your headline was that the idea of pensioners being excluded from voting is offensive, but the concern behind it isn’t.
Mike Moffatt: Absolutely. As the title of the article states, the idea that pensioners being excluded from voting is offensive to me, but I understand the concern behind it.
The first voting rights tweet that went viral - and to be clear, there were a few - was in the context of a public hearing in San Francisco on two mid-rise apartment proposals, a 22-story and an 18-story building. We know that in San Francisco, the middle class has been completely priced out of the city, even though high-income young tech workers make a lot of money. They still can’t afford to live there. Despite that, a large number of existing residents, who on average are substantially older, were actively trying to stop this development. To be clear, the folks opposing this development have every right to do so. People are allowed to have and express their opinions. But there’s also merit to the idea that bad things can happen to the politics of a country or a community when a critical mass of voters feel, rightly or wrongly, that they have no stake in either economic or infrastructure growth.
My politics lean centre-left, and I see this happening in both small-l and big-L liberal politics. Take one of our favourite examples: Old Age Security. Because of the aging population, OAS is taking up an increasing share of the federal budget each year, reaching about $100 billion annually. You would think that governments would look at that price tag and how fast it’s rising and go, “We’ve really got to scale this back, or otherwise it’s going to consume us whole and break our finances.”
To be fair, the Harper government actually tried to do that about 15 years ago by changing the cutoff age and reducing the size of the program. Instead, the Trudeau government went in the opposite direction. They made OAS more generous by giving a top-up to those aged 75 and up, adding about $3 billion to this already ultra-expensive program. That $3 billion is money that could be used to invest in infrastructure and things to grow the economy, but instead it’s being used for consumption simply because it’s politically popular. So I worry about these things.
Now, your politics are more conservative than mine. You’re more on the centre-right. Are you seeing those dynamics play out on your side of the aisle?
Sabrina Maddeaux: Absolutely. I think it’s affecting every stripe of political party because demographics don’t change across the aisle. The Conservative Party is definitely still figuring out its own generational dynamics within the so-called “Big Blue Tent.”
Historically, people think of social conservatives, fiscal conservatives, Alberta conservatives, Saskatchewan conservatives, and East Coast or Toronto ones. But the interesting divide that has emerged over the last five years is between older conservatives and younger conservatives, and they have very different views and priorities.
That younger cohort, which I’m a part of, is influenced by the fact that they’ve been let down by institutions and the economy. They can’t afford a home, the cost of living is soaring, employment is precarious, and they live in a very different reality than conservatives from prior generations. It’s creating a lot of tension, leading to infighting on social media and spilling into the news. That’s something the party is going to have to reconcile if it wants to stay together.
It will be really interesting if the leadership ever shifts before the next election, and how that plays out in a potential contest, because there will be a big divide there. It’s made it difficult to bring forward big, bold economic policy because there’s an inherent tension between catering toward a younger demographic that wants to disrupt the system, versus older conservatives who turn out to vote more and are more comfortable with minor change or keeping the status quo.
Mike Moffatt: I get that sense as well - that this crosses ideological and partisan lines. In any political movement, there have always been divides, like urban versus rural or regional differences. But it really seems like we are getting a deeper age divide in our politics that cuts across all parties.
Sabrina Maddeaux: For sure. It’s almost less about Conservative versus Liberal versus NDP than whether you are a Millennial, Gen Z, or a Baby Boomer. That’s the primary divide these days.
Mike Moffatt: And once again, we’re left out. Gen X.
Sabrina Maddeaux: You’re left out! Sorry, didn’t mention you.
Mike Moffatt: We’re used to it. It’s okay.
Sabrina Maddeaux: Now, people vote for a candidate or party for any number of reasons. But one of the most reliable indicators of who will win a U.S. presidential election is the polling question: “Which candidate would you like to have a beer with?” When it comes to voters who vote on issues, those are usually divided into economic issues and social issues. Your Globe piece makes the case that there are actually two kinds of economic issues, and the distinction between them matters. Why is that?
Mike Moffatt: There’s a fair bit of research to back this up. The piece argues that this distinction matters because there are different types of voting behaviour.
The first type of economic issues are personal finance or “pocketbook” issues, things that directly put more money in your pocket. That could be support checks from the government, keeping consumer prices as low as possible (like taking the GST off pop and wine), or protecting someone’s net worth through home prices.
The other class of issues is called sociotropic, because social scientists cannot make things easy for people. These are more society-wide: they affect the economy, but there’s less of a direct linkage to an individual family’s bottom line. It includes things like GDP growth, the employment rate, and overall business investment. Things that affect the nation as a whole rather than an individual family budget.
Sabrina Maddeaux: So the distinction is between economic issues that grow the size of the pie versus those about how the slices are distributed.
Mike Moffatt: Exactly. That is the key distinction.
To be clear, economic issues aren’t binary; it’s not like someone votes 100% sociotropically or 100% on pocketbook issues; rather, we exist on a spectrum. But what happens over time is that people shift categories.
The research shows that when a growing cohort of the population believes, rightly or wrongly, that economic growth doesn’t benefit them, they shift from voting on sociotropic issues to pocketbook issues. To use your analogy, they vote to get a bigger piece of the pie for themselves rather than voting to make the pie larger for everyone. My piece argued that this cohort includes pensioners, who are more likely than the general population to be pocketbook voters.
When a country has a large and growing share of the population past retirement age who recognize they won’t live long enough to experience the benefits of long-term economic growth or infrastructure investments, politics shift toward becoming zero-sum, and we stop investing in things that grow the economy overall.
Sabrina Maddeaux: We’re definitely seeing that trend in Canada. Combining a growing pensioner demographic with high asset prices and home equity creates a mentality of: “We don’t have to worry about economic growth or creating jobs, because a huge portion of voters don’t depend on employment income.” They feel comforted by asset prices and don’t have the same stake in growing the economy. Meanwhile, younger people are pro-disruption and pro-change because they don’t have the comfort of those asset prices or traditional pensions.
We’ve seen that impact views on U.S.-Canada relations as well. Polling shows older voters are much more in favour of an “elbows up” approach, sticking it to the U.S., whereas younger Canadians just want jobs and economic growth.
Mike Moffatt: It really does. It’s much easier to say: “Let’s close the border, stick it to the Americans, and if unemployment goes up 15%, so what?” if you’re not a working-age person.
Sabrina Maddeaux: The idea that adults shift into becoming pocketbook voters as they age makes intuitive sense, and we can come up with endless anecdotes supporting it. But is there empirical evidence that it’s true?
Mike Moffatt: It turns out there is. One study I like by Tim Vlandas at Oxford University looks at voting behaviour across 21 countries since the 1960s and tracks demographic shifts over time. He finds this conjecture to be true for a couple of key reasons.
First, pensioners naturally care more about the size of programs like public pensions (OAS) than non-pensioners, which causes governments with older populations to make those programs more generous - just like we saw in Canada.
Second, older voters are less likely to penalize incumbent governments for slow GDP growth or high unemployment, but far more likely to punish them for high inflation.
They are more likely to support an “elbows up” approach, sticking it to the Americans, even if it causes higher unemployment. Because of that tradeoff, governments prioritize keeping inflation low over investing in future growth. Vlandas finds that these policy shifts actually cause overall economic growth to slow down.
Sabrina Maddeaux: We see that even in tax policy, where older generations receive more favourable terms even as they get larger government payouts. We also see it in the focus on keeping home prices high. The Liberal housing minister even stated home prices shouldn’t come down, despite the obvious need for affordability.
Mike Moffatt: We might not have a housing minister making comments like that if our population skewed younger. Vlandas directly notes in his paper that as the share of elderly voters increases, parties focus more on keeping inflation down and house prices up, since this matters more to the elderly. There is peer-reviewed science showing this isn’t just youth conjecture, but an observed phenomenon.
Sabrina Maddeaux: You take it a step further and argue that it’s not just seniors becoming disconnected from economic growth, but also working-age folks who feel left behind and would rather see the pie redistributed than worry about growing it.
Mike Moffatt: Exactly. This isn’t isolated to seniors. There are times when working-age populations become disconnected from economic growth.
I had a lightbulb moment during Brexit a decade ago. I watched a BBC interview with two men in their late 50s in a northern English town who voted for Brexit. The reporter asked, “Aren’t you worried about the economic consequences? Markets went down this morning, and companies might struggle.” These guys just laughed and said, “Oh no, a bunch of rich people lost money! I’m going to lose so much sleep over that.” They viewed an economic slowdown as a positive thing because they believed growth only flows to the top 1%. Their mindset was, “If we want to stick it to the 1%, we slow the economy.” When people feel disconnected from growth, they focus entirely on how the pie is sliced.
Sabrina Maddeaux: That trend has only grown since then. It starts with a lack of faith in institutions that feel rigged against you in favour of a different demographic. Polling in Canada and the U.S. shows support among young people for capitalism, and even democracy, is shockingly low. You see the rise of more radical politics because young people feel the system is actively working against them. They think, “Why not tear down the system or assert authoritarian control if that’s what it takes to own a home and raise a family?” It leads to radicalization, anger, and disillusionment.
Mike Moffatt: There’s a German study looking at 60 countries over 100-plus years that finds when a critical mass of voters believe they cannot personally benefit from economic growth, they turn on political and economic elites. They elect a populist promising to break the system. When those populist governments take power, they shift focus away from growth toward redistribution, which often flows to themselves and their allies rather than the public. Talent leaves, institutions weaken, and the economy slows. The study found that after 15 years, the economy is about 10% smaller than in comparable countries that didn’t experience that shock. When people feel they have no stake in growth, it breaks the politics of a country and sets off policy changes that make a bad situation worse.
Sabrina Maddeaux: It’s not strictly left versus right for young people; they just want massive change. A mistake Conservatives have made is assuming young voters shifting toward them in polling meant they became Conservative for life. They just wanted big change. They could easily switch to the NDP or other parties if a radical message appeals to them. Voting patterns are fundamentally different than in prior generations. That’s why younger voters need a real stake in the economy, capitalism, and democracy, so they can buy a home, start a business, and raise a family. Otherwise, there will be massive ripple effects as Millennials and Gen Z age into higher voter turnouts.
Mike Moffatt: There’s a horseshoe theory dynamic where people are attracted to extremes rather than traditional left-versus-right divides.
In recent German elections, young people voted heavily for the far-left or far-right because they believe the system isn’t working for them. If we want to avoid electing politicians intent on breaking the system, we have to make the system work for younger people. If only for self-preservation, older generations need to help build a functional system for younger people, or the country will face severe political consequences.
Sabrina Maddeaux: Absolutely. Thank you, everyone, for watching and listening, and thanks to our producer Meredith Martin and our editor Sean Foreman.
Mike Moffatt: If you have thoughts or questions about how Gen X is always left out—and you probably don’t, because Gen X is always left out—please email us at [email protected].
Sabrina Maddeaux: And we’ll see you next time.
Additional Reading/Listening that Helped Inform the Episode:
Tobi Lutke’s idea that pensioners be excluded from voting is offensive. The concern behind it isn’t
Funded by the Neptis Foundation
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