According to think tank OECD (Organisation for Economic Co-operation and Development), the divide between how much the richest and poorest take home is growing in almost all of the world’s leading economies.
Researchers found that wage inequality grew in 17 of the 22 countries examined from the 1980s to 2008, the year of the financial crisis.
Ahead of the pack
The dubious honour of the top four most unequal nations went to Chile, Mexico, Turkey, and the United States.
However, the UK is no stranger to the list, as the OECD noted that wage inequality grew fastest overall in Britain. The gap between rich and poor UK citizens peaked in 2000, then fell, but is currently on the rise.
Globally, the richest 10% of the world earns 9 times more than the poorest 10%. Angel Gurria, secretary general of OECD, spoke out against this widening gap, calling growing inequality “divisive” and saying that it carves the world between rich and poor, polarising societies.
There is great cause for concern because income inequality is one of the most stifling forces to upward mobility. Since income equality is growing, it means that each passing year makes it harder for hard-working people to move their families up the class divide.
Gurria also said that “ignoring equality is not an option,” and called on the world’s developed nations to draw attention to and plan to solve the problem. Without a real strategy promoting “inclusive growth,” the world’s wealth gap will continue to rise.
‘Trickle down’ disproved
The OECD report “dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged,” said Gurria.
The report shows that the richest 1% of Britain’s population has experienced a doubling of their income since the 1970s. The richest 10% now earn £55,000 a year, a figure 12 times the amount that the average worker in the bottom 10% receives.
The OECD said that the changes in the labour market are partly to blame, as technology has affected the pay of skilled and educated workers disproportionately. In addition, there are many more low-skilled workers with no education who are out of work.
Additionally, there has been an increase in people living alone or in single-parent homes in the last 30 years, which means more people have fewer opportunities to amass combined wealth.