Rich-poor divide accelerating, says OECD

May 16, 2013 5:59 pm 0 comments Views: 301

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The gap between rich and poor widened more in the three years to 2010 than in the previous 12 years, the OECD group of industrialised nations has said.

It says the richest 10% of society in the 33 OECD countries received 9.5 times that of the poorest in terms of income, up from nine times in 2007.

Those with the biggest gaps included the US, Turkey, Mexico and Chile.

The OECD says that if governments do not stop cutting back on welfare support this gap will grow wider.

The Paris-based group is generally in favour of free-market policies, but has recently become more vocal in support of more generous social provision to soften the impact of the economic downturn of the past few years.

Many countries, particularly within the eurozone, have been cutting back hard on welfare spending in an attempt to reduce debt and balance government books as tax revenues fall because of weak growth.

In some cases, this is a condition of international support from the likes of the International Monetary Fund.

The OECD’s secretary general, Angel Gurria, said: “These worrying findings underline the need to protect the most vulnerable in society, especially as governments pursue the necessary task of bringing public spending under control.”

Countries where the gap was least pronounced were mainly in the north of Europe, with Iceland, Norway, Denmark and Slovenia the most egalitarian societies.

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