Income Inequality Growing

The wealth gap between rich and poor increased in three-quarters of countries in the Organization for Economic Cooperation and Development over the last two decades, the group said in a report. Since the mid 1980s France, Greece and Spain were some of the few countries where income gaps shrank, the Paris-based organization said. Over the past five years, income inequality and poverty increased the most in the US, Canada, Germany and Norway, while the gap shrank in Greece, Mexico and the UK. Unemployment among the low skilled and poorly educated is one of the main drivers of the growing income gap, the report said. Government redistribution through taxation and distribution of benefits offset this by reducing income inequality by about one- third on average. The largest part of the increase in inequality comes from changes in the labor markets. This is where governments must act,'' OECD Secretary General Angel Gurria said. Increasing employment is the best way of reducing poverty.'' About 1 in 10 people in OECD countries had an income below half of the national median in 2005, the report said. Poverty rates are the furthest above the OECD average in Mexico, where the rate is one in 20, and furthest below average in Denmark, where the rate is one in five. The OECD is an organization of thirty countries dedicated to democratic and free market principles.

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• income
• inequality
• wealth gap organization for economic cooperation and development poverty increase unemployment redistribution