Income Inequality Reaches Highest Levels in OECD Countries Since Records Begin Journal of Turkish Weekly
go to original May 21, 2015

Rising inequality threatens social cohesion and growth (OECD)

Income inequality has reached record highs in most OECD countries and remains at even higher levels in many emerging economies, said the organization in a new report. The richest 10 per cent of the population in the OECD now earn 9.6 times the income of the poorest 10 per cent, up from 7:1 in the 1980s and 9:1 in the 2000s, according to the OECD report.

The report, In It Together: Why Less Inequality Benefits All, also shows that wealth is even more concentrated at the top than income, exacerbating the overall disadvantage of low-income households. In 2012, the bottom 40 percent owned only 3 percent of total household wealth in the 18 OECD countries with comparable data. By contrast, the top 10 percent controlled half of all total household wealth and the wealthiest 1 percent owned 18 percent.

“We have reached a tipping point. Inequality in OECD countries is at its highest since records began,” said OECD Secretary-General Angel Gurría, launching the report in Paris with Marianne Thyssen, European Commissioner for Employment, Social Affairs, Skills and Labour Mobility.

“The evidence shows that high inequality is bad for growth. The case for policy action is as much economic as social. By not addressing inequality, governments are cutting into the social fabric of their countries and hurting their long-term economic growth,” he added.

Inequality is highest among OECD countries in Chile, Mexico, Turkey, the United States and Israel and lowest in Denmark, Slovenia, Slovak Republic and Norway, according to OECD data. Inequality is even higher in major emerging economies although it has fallen in many including Brazil.

To reduce inequality and boost inclusive growth, the OECD said governments should promote gender equality in employment, broaden access to better jobs, and encourage greater investment in education and skills throughout working life.

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