Inequality hits record levels across OECD countries
Inequality in OECD countries is now higher than at any time since the 1980s, with levels in the UK well above average, according to a new study.
An OECD report on the economic and social damage done by rising inequality, found that the richest 10 per cent of the population in the OECD now earns 9.6 times the income of the poorest 10 per cent, an increase from a ratio of 7:1 in the 1980s and 9:1 in the 2000s.
In the UK the gap was wider, with the average income of the top 10 per cent of the population 10.5 times higher than that of the bottom 10 per cent.
Launching the report, In It Together: Why Less Inequality Benefits All, OECD Secretary-General Angel Gurría said: “We have reached a tipping point. Inequality in OECD countries is at its highest since records began.
“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.”
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The UK is the sixth most unequal country of the 18 included, with wealth even more concentrated at the top than income.
In the UK, the richest 10 per cent of the population owns around 47 per cent of all net wealth, while the top 10 per cent of income earners get 28 per cent of income.
And while the average household income in the UK is about 10 per cent lower than in Germany and France, the average income of the bottom 10 per cent in the UK is 40 per cent lower than in France, and 49 per cent lower than in Germany.
Across the OECD young people have been hit hardest by changes to the labour market, with under 30s making up 40 per cent of those in ‘non-standard work’ and about half of all temporary workers. Young people are also less likely to move from a temporary job into a stable permanent one.
Meanwhile women are 16 per cent less likely than men to be in paid work, on average earning 15 per cent less than their male counterparts.
Responding to the findings, Oxfam’s Inequality Campaign Manager, Adam Musgrave, said: “It’s now startlingly clear that ‘trickle down’ is not working. This rising gap between the richest and the rest is a serious and significant barrier to ending poverty and improving lives.
“Urgent action needs to be taken to ensure that work pays for everyone and not just those at the top. The OECD is right to call for policies that focus on the creation of decent jobs for everyone, for wealthier individuals and multinational firms to pay their share of the tax burden and for women to have greater participation in economic life.”