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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Tue Oct 28, 2008 1:36 pm Post subject: Income inequality and poverty rising in most OECD countries |
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21/10/2008 - The gap between rich and poor has grown in more than three-quarters of OECD countries over the past two decades, according to a new OECD report.
OECD�s Growing Unequal? finds that the economic growth of recent decades has benefitted the rich more than the poor. In some countries, such as Canada, Finland, Germany, Italy, Norway and the United States, the gap also increased between the rich and the middle-class.
Countries with a wide distribution of income tend to have more widespread income poverty. Also, social mobility is lower in countries with high inequality, such as Italy, the United Kingdom and the United States, and higher in the Nordic countries where income is distributed more evenly.
Launching the report in Paris, OECD Secretary-General Angel Gurr�a warned of the dangers posed by
inequality and the need for governments to tackle it. �Growing inequality is divisive. It polarises societies, it divides regions within countries, and it carves up the world between rich and poor. Greater income inequality stifles upward mobility between generations, making it harder for talented and hard-working people to get the rewards they deserve. Ignoring increasing inequality is not an option.�
A key driver of income inequality has been the number of low-skilled and poorly educated who are out of work. More people living alone or in single-parent households has also contributed.
Children and young adults are now 25% more likely to be poor than the population as a whole. Single-parent households are three times as likely to be poor than the population average. And yet OECD countries spend 3 times more on family policies than they did 20 years ago.
In developed countries, governments have been taxing more and spending more on social benefits to offset the trend towards more inequality. Without this spending, the report says, the rise in inequality would have been even more rapid.
But new ways of tackling this issue need to be found, Mr Gurr�a said. �Although the role of the tax and benefit system in redistributing incomes and in curbing poverty remains important in many OECD countries, our data confirms that its effectiveness has gone down in the past ten years. Trying to patch the gaps in income distribution solely through more social spending is like treating the symptoms instead of the disease.�
�The largest part of the increase in inequality comes from changes in the labour markets. This is where governments must act. Low-skilled workers are having ever-greater problems in finding jobs. Increasing employment is the best way of reducing poverty,� he said.
Better education is also a powerful way to achieve growth which benefits all, not just the elites, the report finds. In the short-term, countries have to do better at getting people into work and giving them in-work benefits to provide working families with a boost in income, rather than relying on unemployment, disability and early retirement benefits. |
http://www.oecd.org/document/25/0,3343,en_2649_201185_41530009_1_1_1_1,00.html
For Canada:
http://www.oecd.org/dataoecd/44/48/41525292.pdf
For the US:
http://www.oecd.org/dataoecd/47/2/41528678.pdf
Inequality in the US was behind only Turkey and Mexico, of the 30 nations surveyed.
http://www.globalresearch.ca/index.php?context=va&aid=10643 |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Tue Oct 28, 2008 1:49 pm Post subject: |
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| Better education is also a powerful way to achieve growth which benefits all, not just the elites, the report finds. |
But that's the problem why you'll never get away from such disparity. Highly advanced, technological nations will pay a premium for a computer scientist, a doctor, or an engineer. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Tue Oct 28, 2008 1:52 pm Post subject: |
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America can do a better job of restricting income inequality by:
a) cutting down on ineffective social programs, ones that are naked wealth transfers
b) further progressivizing the tax code somewhat
c) investing in education, both liberal education (I mean old-school classical liberal education, not post-60s BA programs) and vocational training of all kinds
This is essentially a center-right prescription. I believe that the most important ingredient, and the one that appeals to both parties, is (c). I cite Ross Douthat, an actual conservative, for these ideas:
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| I thought that being on the right meant that you wanted a welfare state that's small in size and limited in scope - that's what I signed up for, at least - and the most just and reasonable way to shrink and/or restrain the American welfare state that I can see is to make it more redistributive, rather than less so. To quote William Voegeli quoting Paul Pierson in a fine essay on the dilemmas of small government conservatism: "If conservatives could design their ideal welfare state, it would consist of nothing but means-tested programs." In other words, a conservative welfare state would eliminate our current network of universal entitlement programs, and replace them with cheaper, means-tested programs that, well, spread the wealth - that spend your tax dollars to provide temporary assistance to the unemployed, underwrite health care costs for the aged and very poor, set an income floor underneath American seniors, and so forth, rather than taking money from the middle class with one hand and giving it back to them with the other. |
The costs of education really are transferred to society already. Lawyers in America are EXPENSIVE. Why? Part of it is because America requires lawyers to undergo three years of post-graduate training, after which they must pass an extremely difficult and grueling exam. This regulatory regime may not be the most efficient, but one can see how its self-perpetuating. Can you see the Class of American Law Schools '07 banding together to overturn the test they just took for graduates of '08? I digress.
My point is that we already pay for education, except that at this point education is fueled by credit. Well guess what, people. We don't have a lot of credit to go around right now. Time for the government to take a more direct hand. The University system is already well-insulated from political pressures due to policies such as tenure, so its nigh immune to the troubles that afflict other government programs. If America is to turn to the left, the first left turn it should make is down University Boulevard. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Oct 28, 2008 2:07 pm Post subject: |
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I largely agree with that Kuros. I don't think that the modern economy needs more sociology grads but more competent tradesmen. Check out the NAIT/SAIT programs in Alberta:
http://www.sait.ab.ca/pages/cometosait/academic/Programs.shtml#Fulltime
Most are 2 years in length, highly employment focused (perhaps 100%) 2-3k/year in tuition and have easy admissions standards and very, very difficult graduation standards in most programs. I think NAIT/SAIT saved the lives of many of my lower income friends from high school that did not do well academically. Most own homes, are married etc because they did a good 2 year diploma in welding etc. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Tue Oct 28, 2008 2:36 pm Post subject: |
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| I don't think that the modern economy needs more sociology grads but more competent tradesmen. |
I largely agree with that. I'd like to see some kind of technical education system designed to start at around 16 for those who know they won't be going for a Ph.D. in Ethnobotany (as interesting as that field is). Over the last few decades AP courses were brought in to the high schools to allow those students an opportunity to get a head start on college. A good move. Decades before that, the work/study program was instituted, but that had no real social support and the kids end up waitressing at Pizza Hut or sacking groceries at Safeway.
Drop out rates are awful and not improving. We all know the end result of that and we end up paying for it as a society. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Tue Oct 28, 2008 2:40 pm Post subject: |
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Agreeing is boring.
Here's the world's Gini coefficient. As you can see, the US's Gini coefficient is high, but not quite developing country high. It should also be noted that the US is in the bottom of its color range. But that being said, it still lags behind every single country in Europe (except fake Europe: Georgia & Turkey). |
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laogaiguk
Joined: 06 Dec 2005
Location: somewhere in Korea
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| Posted: Tue Oct 28, 2008 2:45 pm Post subject: |
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| Kuros wrote: |
Agreeing is boring.
Here's the world's Gini coefficient. As you can see, the US's Gini coefficient is high, but not quite developing country high. It should also be noted that the US is in the bottom of its color range. But that being said, it still lags behind every single country in Europe (except fake Europe: Georgia & Turkey). |
fake Europe  |
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Jandar
Joined: 11 Jun 2008
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| Posted: Tue Oct 28, 2008 3:50 pm Post subject: |
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I see nothing wrong with redistributing wealth if it is in the form of investment.
What I mean by investment is worthwhile endeavors such as education and health-care. I see no problem with free health care for every child enrolled in school.
I see no need to return to previous welfare levels.
I would like to see stronger labor unions, however I think monopoly laws should apply to Unions as well as corporations, Unions practicing complete control over an entire industry is uncompetitive. I'd like to outlaw certain exploitative temporary and part time labor practices, most temp agencies I have seen in operation are exploiting people. |
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Bigfeet
Joined: 29 May 2008
Location: Grrrrr.....
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| Posted: Tue Oct 28, 2008 7:00 pm Post subject: |
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| Kuros wrote: |
Agreeing is boring.
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Here's my try at being non-boring:
I see that you guys are good at parroting talking heads instead of doing some thinking yourselves.
Income inequality is caused by free enterprise and capitalism, it's a natural consequence of it. The more free enterprise and capitalism a country has, the greater its income disparity. We use socialism to mitigate this.
People's favorite catch-all answer to this problem is "better education" like it's a magic salve that'll solve it all. How is graduating thousands more scientists and lawyers and doctors going to solve this problem? It's only going depress the wages of those already in the profession and let the bosses be more picky and raise standards when hiring professionals.
One of the reason the bar exam is so hard is to help keep people out of the profession to keep wages for existing lawyers higher. How will increasing the supply magically increase the demand, please tell me?
The only long-term answer I see is to live more efficiently. Learn to do more with less money. Because that is what competitiveness really boils down to, cost. Here we're talking about the cost of labor. |
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mises
Joined: 05 Nov 2007
Location: retired
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Kuros
Joined: 27 Apr 2004
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| Posted: Tue Oct 28, 2008 8:18 pm Post subject: |
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Importing poor immigrants is a net loser for society. But studies in the States have shown that importing immigrants who have a college degree or better (Bigfoot might call this parroting) immediately impacts the tax base for the better. Of course, America's immigration system is narrowly set up to attract STEM non-immigrant workers and only immigrants who can satisfy worker authorizations pledging a whole list of factors. This has its own downsides. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Wed Oct 29, 2008 4:56 am Post subject: |
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Who is going to clean tables at the Eaton Center? |
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