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Inequality Rising Across the Developed World - NYTimes.com - 0 views

economix.blogs.nytimes.com/...ing-across-the-developed-world

Income Inequality OECD Gini Coefficient Globalization

shared by Carolyne Wang on 02 Jun 11 - No Cached

A new report from the Organization for Economic Cooperation and Development finds that most of its member countries have seen their richest citizens get much, much richer in the last few decades, leading to a widening income gap.
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- Carolyne Wang on 02 Jun 11
  
  This graph shows that the Gini coefficients of most countries have increased, indicating increasing income inequality in the world as the value of the Gini coefficient approaches 1, which represents perfect income inequality.
  
  <div class="cArrow"> </div><div class="cContentInner">This graph shows that the Gini coefficients of most countries have increased, indicating increasing income inequality in the world as the value of the Gini coefficient approaches 1, which represents perfect income inequality.</div>
  
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Changes in capital income — which primarily affects wealthier people — have contributed to rising inequality, although the impact has been relatively modest when compared to changes in labor income
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As lower-paid workers have seen their incomes stagnate or even fall, the highest-paid workers have gotten steep raises.
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- Carolyne Wang on 02 Jun 11
  
  In this graph, you can see that there is a greater reduction in the number of hours worked by low income earners compared to the hours worked by high income earners. Fewer work hours combined with low wages leads to lower incomes for the poor and widens the divide between the rich and the poor.
  
  <div class="cArrow"> </div><div class="cContentInner">In this graph, you can see that there is a greater reduction in the number of hours worked by low income earners compared to the hours worked by high income earners. Fewer work hours combined with low wages leads to lower incomes for the poor and widens the divide between the rich and the poor.</div>
  
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Globalization has had an impact, as rich countries have been sending more of their commodifiable, generally less-skilled jobs offshore, which has displaced many lower-paid workers in rich countries.
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Besides outright layoffs, there have also been cuts in work hours (sometimes voluntary, sometimes not), disproportionately affecting lower-paid employees:
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Today, across developed countries, the average income of the richest 10 percent of the population is about nine times that of the poorest 10 percent, with much bigger multiples in Israel, Turkey, the United States, Chile and Mexico. In these last two countries, the income ratio is 27 to 1.
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Technological improvements have also disproportionately benefited the pay of high-skilled workers. Regulatory changes, like loosening protections for temporary (and less-skilled) workers and lower unemployment benefits, may have also had an effect.
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Over the years people have become more and more likely to marry mates who have similar incomes. “Today, 40 percent of couples in which both partners work belong to the same or neighboring earnings deciles, compared with 33 percent some 20 years ago,” the report says.
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Surely to some extent this has to do with more women having earnings, period, and therefore having more women’s earning matching what their husbands make. But in any case if poor marry poor and rich marry rich, that magnifies the income gap effect. After all, if poor married rich, the result would be more evenly distributed wealth.
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