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With a federal election coming later this year, expect politicians to be talking non-stop about the middle class and its importance to the country.

The problem is, according to a new report, the middle class is shrinking — squeezed by high housing and education costs, displaced by automation and lacking the skills most valued in the digital economy.

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And faring particularly badly are millennials, who are less likely to reach middle-income levels in their 20s than their baby-boomer parents, says the Organization for Economic Co-operation and Development analysis.

The picture is as bad or slightly worse in Canada as in the average OECD country, said the report, which calls for various government measures to tackle the problems.

“Our analysis delivers a bleak picture and a call for action,” said Gabriela Ramos, the organization’s chief of staff, who oversaw the project. “The middle class is at the core of a cohesive, thriving society. We need to address their concerns regarding living costs, fairness and uncertainty.”