Countries With The Widest Gap Between Rich And Poor

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5. Israel
> Gini coefficient: 0.371
> Change in income inequality: +13.8%
> Employment rate: 60.2% (7th lowest)
> Change in income of the rich: +2.4% per year
> Change in income of the poor: -1.1% per year

In Israel, the average income of the bottom 10% actually decreased between 1985 and 2008. On average, income of the top 10% increased 2.4% per year. During the same period, income of the poorest 10% declined 1.1% each year — the worst rate of decline among the 27 nations studied. Only one other country, Japan, saw its bottom decile’s income fall as well. According to the OECD, the top 10% of Israel’s residents make 14 times more than the poorest 10%.

4. United States
> Gini coefficient: 0.378
> Change in income inequality: +12.1%
> Employment rate: 66.7% (13th highest)
> Change in income of the rich: +1.9% per year
> Change in income of the poor: +0.5% per year

Inequality in the United States increased significantly from 1985 to 2008, putting it in the fourth-worst spot in the study. As with many other countries in which income inequality has increased, average income has gone up across all income groups since the mid-1980s, but not equally. The income of the wealthiest 10% has greatly outpaced the poorest 10%. The share enjoyed by the top 0.1% in total pretax income quadrupled in the 30 years to 2008.

3. Turkey
> Gini coefficient: 0.409
> Change in income inequality: -5.8%
> Employment rate: 46.3% (the lowest)
> Change in income of the rich: +0.1% per year
> Change in income of the poor: +0.8% per year

Turkey was one of the few OECD countries to experience a narrowing of the gap between rich and poor, with income inequality improving 5.8% between 1985 and 2008. However, it still has the third-highest income inequality among the countries in this study. Part of Turkey’s problem is a relatively low number of government programs to aid the poorest citizens. The average government social expenditure among OECD nations is close to 20% of GDP, while it spends just above 10% — the third-lowest percentage. The wealthiest 10% of Turkey’s residents make 14 times more, on average, than the poorest 10%.

Also Read: Nations That May Lose AAA Ratings – And Those That Won’t

2. Mexico
> Gini coefficient: 0.476
> Change in income inequality: +5.1%
> Employment rate: 60.4% (8th lowest)
> Change in income of the rich: +1.7% per year
> Change in income of the poor: +0.8% per year

Mexico has one of the highest rates of income inequality. Among all OECD countries, Mexico has the lowest amount of public social expenditure as a percentage of GDP. It also has the lowest unemployment benefit recipient rates. Finally, the country has the lowest minimum wages as a percentage of average wages.

1. Chile
> Gini coefficient: 0.494
> Change in income inequality: n/a
> Employment rate: 59.3% (4th lowest)
> Change in income of the rich: +1.2% per year
> Change in income of the poor: +2.4% per year

Chile is one of the few countries where the income of the poor increased at a higher annual rate than the income of the wealthy, 2.4% to 1.2%. Nevertheless, the South American nation has the worst income inequality among the 27 OECD nations examined. Chile has a particularly high rate of self-employed individuals, primarily because of its large farming class. The income ratio of the top 10% to the bottom 10% is 27 to one.

Michael B. Sauter, Charles B. Stockdale