This complete global solution for HR professionals combines custom research, strategic white papers, country primers, webinars, and the expert guidance you’ve come to expect from...
June 1—Income inequality has reached record highs in much of the world, according to a new report by the Organization for Economic Cooperation and Development (OECD), the richest 10 percent of the population in OECD countries now earning 9.6 times the income of the poorest 10 percent, up from ratios of 7:1 in the 1980s and 9:1 in the 2000s. The bottom 40 percent of households owned just 3 percent of total household wealth in 2012, the top 10 percent 50 percent and the wealthiest 1 percent 18 percent.
“We have reached a tipping point,” OECD Secretary-General Angel Gurría said in a May 21 statement. “Inequality in OECD countries is at its highest since data collection began. The evidence shows that high inequality is bad for growth,” so by not addressing inequality “governments are hurting their long-term economic growth.”
The 330-page report estimated that the increase in inequality between 1985 and 2005 knocked 4.7 percentage points off cumulative growth in OECD countries between 1990 and 2010. Most of the economic harm appears to have been caused to the bottom 40 percent of wage earners, who have not benefited proportionately from recent growth in global economic activity. As inequality rises, families at the lower socioeconomic levels experience the most significant drops in educational achievement and skills, wasting their economic potential, according to the report.
The report also noted structural change in the world job market. Between 1995 and 2013, more than half of all jobs created in OECD countries were part-time positions, temporary contracts or positions for self-employed, a trend the OECD called “one important driver of growing inequality.”
Youth are most affected, the report continued, 40 percent working in “nonstandard” jobs and about half of all temporary workers under age 30. Youth are also less likely to move from a temporary to a permanent job.
More must also be done to reduce the gender gap, according to the report, which found that the total increase in inequality would have been one point greater had more women not entered the job market during the past two decades. Women are still about 16 percent less likely to be in paid work, however, and earn about 15 percent less on average than men.
Of the 19 OECD countries surveyed, the report found the greatest income inequality in Chile, Mexico, Turkey, Israel and—in last place—the U.S. The average income of the top 10 percent in the U.S. was 19 times higher than the bottom 10 percent in 2013, far greater than the OECD average and up from 11 times higher 30 years ago.
The OECD identified the lowest levels of income inequality in Denmark, Slovenia, the Slovak Republic and Norway. Inequality is higher in major emerging economies, although it has fallen in some, including Brazil.
• promote gender equality in employment,
• broaden access to better jobs,
• encourage greater investment in education and skills throughout working life,
• redistribute wealth via taxes and transfers and
• ensure that wealthier individuals and multinational firms pay their share of taxes.
Together with the report, the OECD launched a new interactive web-tool that lets users from OECD member states identify where they fit into their country's income distribution. “Compare Your Income” is available at http://www.oecd.org/statistics/compare-your-income.htm.
To contact the reporter on this story: Jenny David in Jerusalem at email@example.com
To contact the editor responsible for this story: Rick Vollmar at firstname.lastname@example.org
The full report, In It Together: Why Less Inequality Benefits All, is available at http://www.keepeek.com/Digital-Asset-Management/oecd/employment/in-it-together-why-less-inequality-benefits-all_9789264235120-en#page3.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)