The gap between rich and poor is getting bigger in the world's richest countries - particularly the United States - as children and low-skilled workers slide deeper into poverty, according to a 30-nation report released today. In a 20-year study of its 30 member countries, the Paris-based Organisation for Economic Cooperation and Development (OECD) said children and young adults are 25 per cent more likely to be poor than the population average - with an even larger gap for single-parent families.
The OECD's members are mostly developed nations, especially in Europe. The United States has the highest inequality and poverty in the OECD after Mexico and Turkey, and the gap has increased rapidly since 2000, the report said. Meanwhile France has seen inequalities fall in the past 20 years as poorer workers are better paid. At the same time, retiree poverty has fallen in many countries, the report said.
OECD secretary general Angel Gurria urged governments to address the "divisive" issue of growing inequality. He said they should do more to educate the whole workforce - and not just the elite - while helping people join the workforce and boosting incomes for working families, rather than relying on social benefits. "Greater income inequality stifles upwards mobility between generations, making it harder for talented and hard-working people to get the rewards they deserve," he said.
"It polarises societies, it divides regions within countries, and it carves up the world between rich and poor." Efforts by governments to curb poverty by redistributing wealth through social policies are becoming less effective as low-skilled workers find it ever harder to find work, the report said. In the US, the richest 10 per cent earn an average of US$93,000 (Dh341.6m) - the highest level in the OECD. The poorest 10 per cent earn an average of US$5,800 - about 20 per cent lower than the OECD average.
Social mobility is lowest in countries with high inequality such as the US, UK, and Italy, the report said. Since 2000, income inequality and poverty have grown fastest in Germany, although it remains below the OECD average. In Britain and Japan, inequalities have been falling since 2000 - although the gap between the rich and the poor is still greater in the UK than in three-quarters of OECD countries. The report covers the 20 years from 1985-2005, but the trends it highlights are valid through today, the OECD said. * AP