“The rich get richer and the poor get poorer” is more than a cliché.
It’s a reality, and it has reached a record high in dozens of countries, according to the Organisation for Economic Co-operation and Development, which is made up of 34 nations and seeks to improve economic and social well-being worldwide.
The Paris-based organization’s latest report, “In It Together: Why Less Inequality Benefits All,” found that the richest 10 percent of the population among OECD members now earn 9.6 times the income of the poorest 10 percent, up from seven times in the 1980s and nine times in the 2000s.
OECD Secretary-General Angel Gurría says in a press release issued today:
We have reached a tipping point. Inequality in OECD countries is at its highest since records began…
By not addressing inequality, governments are cutting into the social fabric of their countries and hurting their long-term economic growth.
Among OECD members, the gap between the disposable household incomes of the rich and the poor is highest in:
- United States
Income inequality is even higher in some emerging economies and countries that are not OECD members. For example, nonmembers South Africa and Colombia fare worse than Chile.
Among OECD members, the income gap is lowest in:
- Slovak Republic
Earlier this year, the World Economic Forum deemed income disparity the biggest threat facing the world.
WEF’s latest annual “Global Risks” report — to which more than 700 experts contributed — states:
The chronic gap between the incomes of the richest and poorest citizens is seen as the risk that is most likely to cause serious damage globally in the coming decade.
In the U.S., factors that contribute to the income gap include debt, unemployment and a growing wage gap.
The latest OECD report states:
Three in four households are in debt and one in four is over-indebted (debt-to-asset ratio above 75 percent). This exposes them to sizeable risks in the event of sudden changes in asset prices, with implications for the vulnerability of the economic system as a whole.
And if you’re wondering why income inequality matters, see Ask Stacy: Why Income Inequality Matters to Everyone.
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