Friday, March 16, 2012

blog #8Wage inequality 'getting worse' in leading economies


The article is about research by the OECD think tank that examined 22 countries that have the world’s leading economies finding income inequality growing in 17 of them.  They studied data from the 1980’s to the financial crisis of 2008.  Chile, Mexico, Turkey and the United states were the most unequal nations.  The UK had the fastest growing inequality hitting its peak in 2000.  Even traditionally egalitarian countries experienced a growing wealth gap.  The OECD found globally the richest 10 percent of the population is nine times richer than the poorest 10%.  Some countries the inequality is much worse.  The UK The richest 10 percent are 12 times richer than the poorest 12 percent.  The OECD says the changes in the labor market over the last 30 years are to blame claiming technology has benefited the highest paid while poorer workers have been forced to take jobs that are temporary, part-time or badly paid. 

I am not surprised by what article discuses.  The technological advances has definitely had an impact on the poorest people in the societies because their jobs are being taken over by automated machines.  If the owners of the companies purchasing the automated machines no long have to pay for labor and over time end up making more money with the automated machines hence a larger income inequality gap.  I speculate that unemployment rates have also contributed to the inequality gap.  The poorest 10% percent of populations are usually uneducated compared to the rest of the country.  People with low education are hit hardest by unemployment not the Top executives and top 10 percent of the population.   This also contributes the Income inequality growth.  I agree with one of the statements in the article “Without a comprehensive strategy for inclusive growth, inequality will continue to rise”.

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