Saturday, May 23, 2015

Fact of the Day - Inequality

The OECD said  that income inequality among its 34 members is higher today than it was 30 years ago. In the mid-1980s, the richest 10 percent earned 7 times as much as the poorest 10 percent. Today they earn 9.6 times as much. Not even the financial crisis or the early recession could reverse the trend, the organization noted. On the contrary, disposable income for the rich either suffered less or grew faster than disposable income for the poor. In some countries, including the United States, the rich got richer even as the poor got poorer.

One explanation for rising inequality is the kind of jobs that job creators are creating. The OECD reported that temporary work, part-time jobs and self-employment have accounted for more than half of all positions created since the mid-1990s. Not only do these jobs tend to pay less and experience slower wage growth, they also tend to offer fewer opportunities for training and, by extension, upward mobility. This is why a poor person has a better chance of scraping her or his way into the middle class in Canada, where the rich earn 8.6 times as much as the poor, than in the United States, where the rich earn 18.8 times as much. Inequality in Mexico has surged in recent years, according to new survey, with the incomes of the richest 10 percent of the country 30.5 times greater than the poorest 10 percent.

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