OECD report cites increasing income inequality in U.S.
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Income inequality in the United States is rising and is now greater than in all developed countries other than Chile, Mexico and Turkey, according to a new report.
The report released Monday by the Organization for Economic Cooperation and Development indicates that income inequality has increased in almost every developed country in the last 30 years, and has continued to rise since the global financial crisis. Among the few countries where inequality has decreased in the last 30 years are Ireland, France, Greece and Turkey.
In the United States, the average income among the richest 10% is 14 times greater than the average income among the poorest 10%, up from a 10 to 1 ratio in the 1980s. The countries where the ratio between the incomes of the top 10% and the bottom 10% is the lowest -- around 5 to 1 -- are Denmark, the Czech Republic, Belgium and Norway.
The conclusions by the OECD, whose members are developed countries, come just after the Occupy Wall Street movement focused attention on the gap between the wealthiest 1% of the population and everyone else. In a side note specifically about the U.S., the OECD notes that the disparity between the top 1% and the bottom 99% has grown much faster than the gap between the top 10% and bottom 90%.
The report says there are many causes for increasing income inequality, including technological progress, which sends a greater share of national income to workers who are technologically literate. The report says labor market reforms have helped get more low-income people working, but have also led to more part-time jobs and general job instability.
The head of the OECD, Angel Gurria, said in a speech Monday that increasing inequality is an issue because ‘the social compact is starting to unravel in many countries’
‘Uncertainty and fears of social decline and exclusion have reached the middle classes in many societies,’ Gurria said. ‘People feel they are bearing the brunt of a crisis for which they have no responsibility, while those on high incomes appear to have been spared. Addressing the question of ‘fairness’ is a condition-sine-qua-non for the necessary restoring of confidence today.’
Michael Lewis, the author of ‘Moneyball’ and ‘The Big Short,’ wrote a sardonic commentary , published Monday by Bloomberg, on the topic. The piece is written as a memo by a member of the top 1% complaining to others in that group about the rabblerousers in the 99%:
We must be able to quit American society altogether, and they must know it. For too long we have simply accepted the idea that we and they are all in something together, subject to the same laws and rituals and cares and concerns. This state of social relations between rich and poor isn’t merely unnatural and unsustainable, but, in its way, shameful.
-- Nathaniel Popper