US, Israel Deemed 'Inequality Champions' Of The Developed World

Today, there is more inequality in the developed world than at any time in the past 30 years, says a recent OECD research study. Yet the USA and Israel show the maximum disparity between the rich and poor, according to rt.

"In most countries, the gap between rich and poor is at its highest level since 30 years. Today, in OECD countries, the richest 10 percent of the population earn 9.6 times the income of the poorest 10 percent," said the Organization for Economic Cooperation and Development (OECD) in a report released Thursday. "In the 1980s this ratio stood at 7:1 rising to 8:1 in the 1990s and 9:1 in the 2000s."

In the US, the wealthiest 10 percent of the population earn 16.5 times as much as the poorest 10 percent. In Israel, the poorest manage with just one-fifteenth of the earnings of the wealthiest 10 percent.

Moreover, the widest gaps between the richest and most average households also belong to the US. The topmost 5 percent of American households own almost 91 times the wealth of the average citizens.

The OECD report documents the situation in 18 member nations. It points out that half the total wealth is held by only 10 percent of the population, even as the next 50 percent holds the second half, while the next 40 percent is left only with the scraps of about just 3 percent of the wealth.

The large gaps is mainly due to the difference in the quality of education. One more factor that OECD thinks is spurring the growing inequality is the rise in non-standard work, including temporary contracts and self-employment.

Most of the jobs created in the OECD countries since the mid-90s fall in the category of non-standard work, therefore most families in this category tend to get poorer, leading to high inequality.

"High and often growing inequality raises major economic concerns, not just for the low earners themselves, but for the wider health and sustainability of our economies," the report says. "Put simply: rising inequality is bad for long-term growth."

Less progressive tax systems and inflation are other reasons. "Redistribution via taxes and transfers is a powerful instrument to contribute to more equality and more growth," the report says.

Latin America is just one of the regions where inequality hasn't grown in the last 30 years, even though the social gap is higher, says OECD.