The widening gap between the rich and poor is not just an American problem. According to a new study by the Organisation for Economic Co-operation and Development, income inequality in most economically developed countries is the worst it has been in nearly 25 years. 24/7 Wall St. reviewed the OECD’s report and identified the 10 countries with the worst income inequality.
“In OECD countries today, the average income of the richest 10% of the population is about nine times that of the poorest 10%,” the study reports. And in many of these countries, income inequality is increasing as more and more wealth is concentrated in the hands of the rich.
In some countries the gap is even more pronounced. The income of the bottom 10% of earners has actually declined while the income of the top 10% has increased. In Israel, Turkey and the United States, the average income of the top 10% is 14 to one compared to the bottom 10%. In Mexico and Chile, it is an astounding 27 to one.
In many of the countries with the greatest levels of income inequality, there is also very limited public social expenditure. Seven of the 10 countries on this list spend below the OECD average — as a percentage of GDP — on social benefits. For example, the share of unemployed who receive benefits in both Chile and Turkey are less than half the OECD average. Mexico has no unemployment insurance at all.
The 10 countries on this list are ranked by their levels of income inequality using the Gini coefficient, where zero represents perfectly equal distribution and one represents maximum inequality. Also included are the change in income inequality from the mid-1980s, employment rates and the change in income for the rich and poor. While inequality has worsened in most countries, the situation has improved in some. Even in these countries, however, inequality remains at historically high levels.