For a few years I have worked with the OECD(Organization of Economic Cooperation and Development) in media and telecom issues. The organization has always done the best statistical analysis of the economies of the 30 Developed Countries that are members.
So last week they released their statistics on income inequality in the developed world. With the exception of Mexico and Turkey, the U.S. has the highest inequality level and poverty rate in the OECD. Here are some other depressing facts.
The average income of the richest 10% is US$93,000 in purchasing power parities, the highest level in the OECD. However, the poorest 10% of the US citizens have an income of US$5,800 per year – about 20% lower than the average for OECD countries.
Redistribution of income by government plays a relatively minor role in the United States. Only in Korea is the effect smaller. This is partly because the level of spending on social benefits such as unemployment benefits and family benefits (health care) is low – equivalent to just 9% of household incomes, while the OECD average is 22%.
Social mobility is lower in the United States than in other countries like Denmark, Sweden and Australia. Children of poor parents are less likely to become rich than children of rich parents.
Wealth is distributed much more unequally than income: the top 1% control some 25-33% of total net worth and the top 10% hold 71%. For comparison, the top 10% have 28% of total income.
We cannot continue the fantasy that we are a first world nation if we have a wealth gap that looks like a second world oligarchy.