12/5/11

Rich Poor Divide Growing

I just read a bloomberg article which states the gap between rich and poor is widening across most developed economies as skilled workers reap more rewards and well, less skilled workers fall behind.  No kidding.

The study was done by the OECD (Organization for Economic Cooperation and Development) and states that the average income of the richest tenth of the population is now about nine times that of the poorest tenth and the gap has increased about 10 percent since the mid 1980s.

The US, UK, Mexico and Israel are among the countries with the biggest divide between rich and poor, while Denmark, Norway, Belgium and the Czech Republic are among those with the smallest gap. The earnings multiple is 14-to-1 in the U.S. and Israel, compared with about 10-to-1 in the U.K., Italy and Japan and 6-to-1 in Germany and Denmark.

They use the Gini Coefficient or Index in this study and if you don't know about it, check it out on wikipedia and while you are there, donate if you can, its a great resource.  Gini rose in every major country around the world and while this maybe unfair, its totally expected.

Bottom line is that this shouldn't be a surprise.  It takes money to make money and as our societies mature, it stands to reason that those with wealth will only get wealthier.  Sure taxing at different rates may slow the rate of disparity but in the end, its a natural occurring economic phenomenon.

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