Gap between rich and poor worst in decades

NOVANEWS

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The Organization for Economic Cooperation and Development (OECD) says the gap between rich and poor in most of its member countries has reached its highest level in 30 years.

The organization released a report on Tuesday saying most of its 34 member states have seen a widening inequality gap.

Among its members are both developed and developing nations, including countries from the European Union, the US, Turkey, Mexico and Japan. However, China, Brazil and India are not members of the OECD.

According to the report, the richest 10 percent of people in the OECD area earn 9.5 times the income of the poorest 10 percent. The ratio stood at 7:1 in the 1980s.

The finding also showed that in the couple of decades leading up to the global financial crisis which erupted in 2007, the average household income increased for all OECD member states by around 1.6 percent annually.

However, in recent years, the average household income has stagnated or fell in most OECD member states.

The organization said the expanding inequality gap has negatively affected member states’ economies, with estimates showing that it has slashed more than 10 percentage points off growth in Mexico and New Zealand.

This is while growth rates in the US, UK, Sweden, Finland and Norway would have been more than a fifth higher if there had not been widening inequality.

The organization called for a number of measures to tackle the widening gap, including anti-poverty programs and increased access to high-quality education, training and healthcare.

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