Rich man, poor man
Income inequality grew in most OECD countries between the mid 1980s and the mid 2000s. On average the income of the richest 10 percent of the population is now almost nine times higher than the poorest 10 percent. In Denmark and Sweden the gap is narrower with the richest 10% earning on average less than five times the poorest.
Only a few countries bucked the trend: France, Greece and Spain moved towards greater equality of incomes over the past 20 years.
The United States has one of the highest levels of inequality with the average earnings of the richest 10 % of the population 16 times higher than the poorest 10 percent. The gap between rich and poor in the US has also widened more rapidly than in most other countries over the past 20 years.
The two poorest and most unequal OECD countries – Mexico and Turkey – saw big rises in inequality between the mid 1980s and mid-1990s. But there were equally large falls in the subsequent decade. In the UK, inequality increased throughout the 1980s then remained stable, and fell from 2000-2005. The following tables from OECD Growing Unequal? report show trends in selected countries:
Source: Growing Unequal? Income Distribution and Poverty in OECD Countries
Governments have been taxing more and spending more in an attempt to offset this growing income gap but reducing inequality also means ensuring that people have a decent income. OECD says governments have to get more people into work so that there is less reliance on unemployment, disability and early retirement benefits. But work alone is not sufficient to avoid poverty; more than half of poor people live in households where one or more members are in work. Public services such as education and health are distributed more equally than income. Policies to improve child development also make a difference.
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