PARIS, Oct. 21, 2008
Gap Between Rich And Poor Growing
Study Of Global Income Inequality Shows U.S. Middle Income, Poor Falling Further Behind Since 2000
-
According to an OECD report on income equality and poverty, the income of the richest 10 percent of people is, on average across OECD countries, nearly nine times that of the poorest 10 percent. In the U.S., that gap is even greater — about 16 times. (OECD)
-
Interactive Living In Poverty A state-by-state look at U.S. Census Bureau data on income and poverty levels.
In a 20-year study of its member countries, the Paris-based Organization for Economic Cooperation and Development said wealthy households are not only widening the gap with the poor, but in countries such as the U.S., Canada and Germany they are also leaving middle-income earners further behind, with potentially ominous consequences if the global financial crisis sparks a long recession.
Inequality threatens the "American Dream" of social mobility - children doing better than their parents, the poor improving their lot through hard work - which is lower in the U.S. than countries such as Denmark, Sweden and Australia, the report "Growing Unequal? Income Distribution and Poverty in OECD Countries" found.
The two decades covered in the study - 1985-2005 - saw the development of global trade and the Internet, and a period of overall strong economic growth. The countries covered are mostly developed nations, especially in Europe.
The United States has the highest inequality and poverty in the OECD after Mexico and Turkey, and the gap has increased rapidly since 2000, the report said. France, meanwhile, has seen inequalities fall in the past 20 years as poorer workers are better paid.
OECD Secretary-General Angel Gurria said that the study, which took three years to complete, would be useful to policymakers because it is coming out just as the world is undergoing "the worst crisis in decades."
With several OECD countries already in recession, the "key question" raised by the report is whether governments can prevent a possible drop in top earners' incomes from sparking "a second wave" hit to the lowest-income households, Martin Hirsch, France's high commissioner for fighting poverty, said at a news conference.
Fast Fact
Also speaking at the report's presentation, Oxford University economist Anthony Atkinson noted that the widening inequality gap had coincided with a period of strong economic growth.The U.S. has the 3rd highest inequality and poverty among nations studied, and the gap has increased rapidly since 2000.
"What will happen if the next decade is not one of world growth but of world recession? If a rising tide didn't lift all boats, how will they be affected by an ebbing tide?" Atkinson said.
With governments around the globe announcing trillions of dollars in rescue financing to shore up banks, "I think that citizens of OECD countries are going to expect that if you can find funds to rescue banks, then governments can fund an effective unemployment insurance scheme, and they can fund employment subsidies," Atkinson said.
Atkinson said governments need to act to support employment as a response to widening inequality and faltering economies.
"If the government can take on the role of lender of last resort, then we should think about the government taking on the role of employer of last resort. Put bluntly, governments have to step up. Step up to the plate as Roosevelt did in the Great Depression," Atkinson said.
The OECD's Gurria urged governments to address the "divisive" issue of growing inequality. He said they should do more to educate the whole work force - and not just the elite - while helping people get jobs and increasing incomes for working families, rather than relying on social benefits.
"Greater income inequality stifles upward mobility between generations, making it harder for talented and hardworking people to get the rewards they deserve," he said in a statement. "It polarizes societies, it divides regions within countries, and it carves up the world between rich and poor."
In the United States, the richest 10 percent earn an average of $93,000 - the highest level in the OECD. The poorest 10 percent earn an average of $5,800 - about 20 percent lower than the OECD average.
Social mobility is lowest in countries with high inequality such as the United States, United Kingdom, and Italy, the report said.
More information from the OECD Web site:
By AP Business Writers Emma Vandore and Greg Keller
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Add a Comment See all 47 Comments
- All of you have valid points but the biggest problem here in America is quite a small word. GREED. Greed has ravaged America like a cancer. And we are spreading it all over the world. Even the Europeans, who are a semi-socialist society are becoming just like us. A few years ago they were appalled at our hire and fire mentality, well they are adopting it. They were disgusted at the gap between the greedy and the poor, well now they are not. I hope that as Americans we can see how we are poisoning the world with our greed and put this ugly disease into remission. We have the rescources and we can provide the leadership. Let''''s do it America!!! Let''''s stamp out poverty in our country first so we can once again show the world what America and Americans are really all about. Stop the greed!!!!!!!
--------------------------------------------------------------------------------
Posted by tonfrac at 05:26 PM : Oct 22, 2008
Nice thoughts, nice words. But its hard to be charitable when the government is commanding/forcing charity through the tax system. And its hard to be patriotic when the government chatises me for improving my lot. Im not greedy, Im just protecting what little they leave me. And I dont want to give them anymore because they waste it so terribly. - Reply to this comment
- All of you have valid points but the biggest problem here in America is quite a small word. GREED. Greed has ravaged America like a cancer. And we are spreading it all over the world. Even the Europeans, who are a semi-socialist society are becoming just like us. A few years ago they were appalled at our hire and fire mentality, well they are adopting it. They were disgusted at the gap between the greedy and the poor, well now they are not. I hope that as Americans we can see how we are poisoning the world with our greed and put this ugly disease into remission. We have the rescources and we can provide the leadership. Let''s do it America!!! Let''s stamp out poverty in our country first so we can once again show the world what America and Americans are really all about. Stop the greed!!!!!!!
- Reply to this comment
- The US looking like Argentina more & More. To bad the American people have no clue as to what there government really is If they there would have been a revolution long before now. So America are you just going to lay there like a slaughtered pig
- Reply to this comment
- The US government can solve this problem by each year just hiring everyone that is making minimum wage and put them each in a job where they make government wages. It will give those folks an income stream lifting them out of poverty and it shouldn''t affect the collective productivity level at all.
This, and deficit spending, should be able to continue as the solution by congress to the US problems for at least another few years. - Reply to this comment
- "France, meanwhile, has seen inequalities fall in the past 20 years as poorer workers are better "
In case you missed it, France is the only "Western" economy that does suffer this problem. And we see how much of a world leader they are.
In addition, Asian countries seem to be ignored in this study. They are whipping our ***.
Finally, the bottom 50% of American wage earners pay less than 3% (yes, three percent) of the American tax bill. The top one tenth earners pay 70% of the tax bill. Taxes and rebates cant do much more to fix your perceived problem. Whats next? Comandeering money from the wealthy. Ill bet they take their money and their knowledge and leave for Australia.
Our ONLY hope is to gain fair wages from small businesses. The big guys (GM) are already dying. Small businesses cant pay more salaries until we set them free again.
Its a nice dream, the one where America has so much wealth and the businesses are so strong we can tax the rich and feed the rest. That dream is dying along with the phrase "The land of opportunity".
Please research the numbers before you vote. we cant tax our way to prosperity OR fairness. - Reply to this comment
- "wealthy households are not only widening the gap with the poor, but in countries such as the U.S., Canada and Germany they are also leaving middle-income earners further behind"
----
In case you missed it, lack of initiative is a worldwide issue... - Reply to this comment
- Want to see a magic trick? Ready? 1..2..3..Poof. No more middle class-just rich and poor. Is that cool or what?
- Reply to this comment
- KittenPower, Heres part 2,
As for your: "final comment-do rich oilmen deserve big bucks as they pollute our environment??" Ill give you a dozen rich, cigar smoking, water poluting oilmen (does he really exist anymore?) if you will give me a few thousand crack dealing stay at home welfare moms.
But I will still go along with your plan, tax the lazy CEO who cheats and polutes and leave the hard working generous CEO alone. How will you tell the difference? While we are at it, lets give money to the deserving, hard stricken single mother but not to the drug dealing crack addict baby machines. How will you tell the difference?
If you give government the controls, who will control the government?
The problem is we end up trying to elect officials who understand what is "fair" on the farm and in the factory. They end up controlling our charities "for those who cant work". All the while trying to keep our total standard of living better than the rest of the world. You cant fix, and grow, an economy if you are busy making everything "fair".
I believe both McCain and Obama want to leave a mark on history. Is that fair to me?
Government needs to protect us and keep our communications free. Let us take care of the rest. My family does not need Big Brother deciding for us. - Reply to this comment
- KittenPower, (I had to split my answer into two parts)
I dont miss the points you make. I grew up poor, married a single mother who raised two kids on her wages as a store clerk. I have close relatives who cannot work for very valid reasons. I speak from experience.
I have no illusions, the hardest workers dont earn the most money. Never have, never will, even with "wealth sharing".
I am not sure where Obamas "tax cuts" are going. But I do know he plans to raise taxes on the guys who dont pay them anyway and pass them to the rest of us. Then he and the rest of our government will decide who "deserves" the money. Doesnt sound to be based on hard work and success to me.
If you want proof this fails look at our last 40 years, since Lyndon Johnson created "The Great Society". Our non-working class (people who dont even try to work) is growing, our place in the world economy declining. Electronics, Steel, clothing, cars, furniture "Made in Asia". - Reply to this comment
- Machineguy - I think you are missing a few details: 1) Obama''s tax cut only goes to WORKING Americans 2) there is a false belief out there that those who work the hardest earn the most wealth - I for one don''t think all ceos work hard or rich porn stars, rockers or athletes....I general the DISTRIBUTION of wealth in this country is screwed up...under this system the rich (think W) get richer sometimes by sitting on their *****...furthermore, those who don''t work often are in that position because of mental illness, lack of skills etc...final comment-do rich oilmen deserve big bucks as they pollute our environment??
- Reply to this comment
- The real danger with distributing the wealth is when you do it correctly everyone in the WORLD gets equal shares. So we Americans end up with less than $5800 each.
Posted by Machineguy at 12:14 PM : Oct 21, 2008
Right,
What we have had instead for the last decade is a redistribution of any American job worth having, moved from America to the rest of the world.
Screww the majority of Americans bad enough and watch your ruling party lose big-time in the next election.
Happens every time, dont look so surprised.
--------------------------------------------------------------------------------
Posted by mytoosense at 03:43 PM : Oct 21, 2008
I agree with you in part. We are loosing our jobs to overseas economies. But the ruling parties cant stop that, only we can. Neither the Repubs or the Dems can ennact enough laws to stop the world from buying goods from the cheapest/best vendor. We need politicians who set us free, not set fences that the rest of the world ignores.
We are fighting with one hand tied behind our back. Fourty percent of our people dont pay taxes (dont work)!!!
Do you really think big government will treat you better than big business? My guess is you are the only one who has your best interest at heart and you need freedom, not more rules.
Obama says he will cut taxes for the middle class. Do we all hope to stay in the middle class? Who can we trust to decide that for us? What will happen to the rest of our pride? - Reply to this comment
- You can not tax business - it is impossible. They will just cover that cost with higher prices. Obama maybe will lower the income tax but the secret is that Social Security tax is going up in his plan. That is what he is not telling you. Employers match that SS tax for each employee. Result; lay off employees. Not tax them a bit just to drive the nail in the coffin. Your taxes will go down and prices will go up. The ONLY way to keep more of your money is to make government SMALLER, so it do0esnt cost as much.
Posted by bailmeout1
What part of this Republican Economic Theory of yours can we thank for the current state this country is in?
So what if prices rise due to additional business tax.
If the price is too high the public wont buy the product. Then the company will have a capitalistic choice to make: Lower the price thus sacrificing some of the disgustingly high profits enjoyed lately by corporation OR chose to go out of business from a lack of sales.
I am looking forward to watching the fat cats having to make the tough decisions for a change. - Reply to this comment
- ttinsly,
You seem to confuse capital with oportunity. Capital is a lever, not a barrier. Like Obama, I started with nothing (no capital, none) and succeeded beyond expectations. It took hard. Obama has succeeded even more than I because he is willing to lie and promise you things he cant deliver.
An economy is a fragile thing. If you control it, it will die. If you fence it in, it will move away. Social slavery results anytime someone has to work so someone else doesnt. Isnt that what welfare is all about? - Reply to this comment
- The real danger with distributing the wealth is when you do it correctly everyone in the WORLD gets equal shares. So we Americans end up with less than $5800 each.
Posted by Machineguy at 12:14 PM : Oct 21, 2008
Right,
What we have had instead for the last decade is a redistribution of any American job worth having, moved from America to the rest of the world.
Screww the majority of Americans bad enough and watch your ruling party lose big-time in the next election.
Happens every time, dont look so surprised. - Reply to this comment
- This study was done in France and finds France doing better than the rest of us. Of course France leads the civilized world, lol.
Our economy is going into decline because the rest of the world is outperforming us. We have too many people collecting government money. Japan took the steel industry, electronics and next automobiles. China took clothing, India is taking computer technologies.
The first 6 years of Bush II saw economic growth in spite of world competition. Its been a fast ride down hill since Nancy Pelosi came to power. But Obama will spread what is still left here so it wont feel too bad for a few years. Real wealth will move overseas like Madonna.
Wake up people, we live well when people work, people work when they get to keep the results. Our country will have all the wellfare we are willing to pay for until the wealthy move away. - Reply to this comment
- farpoint is drinking the pretty red Kool-Aid again. Who has been in power since 2000-not democrats but repukes. Trickle down is not an economic strategy. Bush was a disaster for this country and the repubs had control of congress long enough for us to see how successful there brand of economics is for the middle-class. VOTE OBAMA or be prepared for a nice facist future care of the neocon right.
- Reply to this comment
- As our socialist government provides more and more for the lower levels of Maslow''s hierarchy of human needs, the propensity for indiviudals to seek employment to satisfy those needs is greatly diminished.
Hence, the disparity between the have''s and have not''s grows proportionately as government welfare increases.
Example: A neighbor receives food stamps and uses the local emergency room for medical attention (both free of cost to him and his family). He inherited his house, but has to come up with enough money to pay utilities, property taxes, car insurance and gas. He works (no w-2 jobs) just enough to generate cash to pay the bills. When asked who paid for his food and medical care, he replied, "the government". And when asked where the government got its money, he didn''t know.
Motivation, education and opportunity are the keys to bridging the income gap, not the redistribution of wealth, which is a proven negative motivator. - Reply to this comment
- McSame is part of the problem. The right wing ideology of "trickle down", already discredited as a failure, is alive and well in the Con Men party. What has to happen, do the newspapers need to declare America a fascist country before you believe it? OMG, wake the F up already. The gap between the rich and poor is already the end result of the fascist policies. OMG.
--------------------------------------------------------------------------------
Posted by noloyalisti at 12:48 PM : Oct 21, 2008
"Trickle Down" is a left wing term for what conservatives call "Opportunity without Government intervention". Of course the LEFTIES dont understand it because it entails other terms they dont understand like "work", and "fair pay". So they made up a term that fits their concept of the world, "trickle down", with them sitting at the bottom instead of working to get on top.
fascist? you have no understanding of the word. And no, I wont believe it just because the papers say so. Do you? - Reply to this comment
- McSame is part of the problem. The right wing ideology of "trickle down", already discredited as a failure, is alive and well in the Con Men party. What has to happen, do the newspapers need to declare America a fascist country before you believe it? OMG, wake the F up already. The gap between the rich and poor is already the end result of the fascist policies. OMG.
--------------------------------------------------------------------------------
Posted by noloyalisti at 12:48 PM : Oct 21, 2008
Well then maybe you can explain how it was even possible for a fellow such as your very own Obama to rise from his meager beginnings to where he is today? Perhaps he worked hard and believed that education was the key? perhaps he shaped his own destiny and applied himself and worked very hard? I imagine he had plenty of all-nighters getting through Harvard.
It is you that needs to wake up. Our lives are ours (at least for now). Government can not help our lives but has a huge potential to hurt it. Bush had a responsibility as to winning the war in Irag, true, he has screwed that up to a level of moron-ness that defys comprehension. That thing should have been two months, tops. That is where our money went, all of this has nothing to do with economics. - Reply to this comment
- ... That Congress saw fit to add 150 Billion dollars in pork to what was already a tremendous cost to us, the 750 Billion bail out.
Until Obama (or anyone) can explain why Obama tried to add even more pork (for Acorn) to it - I do not believe a single thing that leaves his lips.
--------------------------------------------------------------------------------
Posted by bailmeout1 at 12:41 PM : Oct 21, 2008
Obama was just trying to "spread the wealth around". He does that a lot. - Reply to this comment
