Aaron Cynic writes at Diatribe Media:
The gulf between the rich and the poor continues to grow exponentially and stands to “unravel the social contract in many countries,” according to a report released Monday by the Organization for Economic Cooperation and Development. In 17 out of 22 countries the OECD measured, income inequality has risen steadily for more than three decades and now sits at the highest levels in recent history. The study found the average income of the richest 10% of a population is nine times that of the poorest 10%. The income gap in “traditionally egalitarian countries” like Demark and Sweden rose from 5 to 1 in the 80’s to 6 to 1 today, and in America, the income gap is a staggering 14 to 1.
Inequality in wages and salaries is the largest contributing factor to the rise in income disparity. Other factors include an increase in part time work and declining collective bargaining agreements between workers and employers; disparity between workers with higher technological skills and those without; and regulatory reforms that created mainly low wage jobs.
In the United States, the richest 1% bring home an average of $1.3 million after taxes. The poorest 20% take in just $17,700. During the same period of time (1980–2008), the income tax rate dropped from 70% to 35%. Redistribution of income by taxes and benefits offset less than 10% of market income inequality. While the hours of low wage workers increased by more than 20% over the past decades, overall earnings inequality still rose “moderately” due to the low level of the minimum wage.
Read the full post at Diatribe Media