OECD report shows members facing greater inequality challenges
2011-12-06 17:32:57
A report released on Monday by the Organization for Economic Co-operation and Development (OECD) showed that its member countries are facing greater inequality risks.
According to the report, the gap between rich and poor in OECD countries has reached its highest level for over 30 years and has become a universal concern among both policy makers and societies at large.
The report found out that the average income of the richest 10 percent of the population is now about nine times that of the poorest 10 percent across the OECD.
The income gap has risen in Germany, Denmark and Sweden from 5 to 1 in the 1980s to 6 to 1 today. The gap is 10 to 1 in Italy, Japan, Republic of Korea and Britain, and higher still at 14 to 1 in Israel, Turkey and the United States.
Only a few countries have been able to buck this trend, according to the report. Income inequality has recently fallen in Chile and Mexico, but the richest in these two countries still have incomes more than 25 times those of the poorest, the highest in the OECD.
"The social contract is starting to unravel in many countries. This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that greater inequality fosters greater social mobility," the OECD Secretary-General Angel Gurria told journalist while launching the report on Monday.
"Without a comprehensive strategy for inclusive growth, inequality will continue to rise," he said at the OECD Paris-based headquarters.
The OECD chief noted that the single most important driver of the inequality trend has been greater inequality in wages and salaries.
"This is not surprising: earnings account for about three-quarters of total household incomes among the working age population in OECD countries in most cases," he said.
The OECD report also looked at other factors such as the impact of changing family structures and changes in other income sources, examining the effects of tax and benefit systems as well as public services in smoothing market-based inequality and how these effects have changed over time.
This report entitled "Divided We Stand: why inequality keeps rising" is a follow-up to the OECD 2008-edition of the "Growing Unequal."