Rich-Poor Divide raises inequality to a 30 year high, OECD Says

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December 12, 2011 

 

The gap between rich and poor has grown in most of the world's major economies, and now stands at its highest level in 30 years. 

A report released Monday by the Paris-based Organization for Economic Cooperation and Development (OECD), a research and policy group that has 34 member countries, calls for governments to act quickly to address the growing inequalities.
 

The report shows that the gap between the income of the richest 10 percent and the poorest 10 percent has risen in nearly all OECD member countries. The biggest gap is in Chile and Mexico, where the richest make 25 times more than the poorest. The gap is 14-to-1 in the United States, Turkey and Israel; 10-to-1 in Japan, South Korea and Britain; and 6-to-1 in Germany, Denmark and Sweden.
 

OECD Secretary-General Angel Gurria said the study shows that "the social contract is starting to unravel in many countries."
 

Gurria said the study shows that the benefits of economic growth in countries do not automatically trickle down to the poor.
 

The OECD attributed the rising income gaps to several factors, including changes in tax and benefits policies and differences in education and training.
 

In the three decades prior to the recent economic downturn, wage gaps widened and household income inequality increased in a large majority of OECD countries. This occurred even when countries were going through a period of sustained economic and employment growth.

 

This OECD report (with some free PDF’s attached here) analyses the major underlying forces behind these developments:

- An Overview of Growing Income Inequalities in OECD Countries

- Special Focus: Inequality in Emerging Economies 

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