Income inequality rises around the world, not just U.S.

David Gura Dec 3, 2011

Jeremy Hobson: Well a report out this morning finds income inequality is at a record high — not just in the U.S., but around the world. That’s according to the Organization for Economic Cooperation and Development.

Marketplace’s David Gura reports from Washington.


David Gura: The gap between the rich and poor has widened in developed countries pretty steadily over the last 30 years.

Lane Kenworthy teaches political science at the University of Arizona.

Lane Kenworthy: There are a common set of economic changes that have occurred, roughly speaking, since the 1970s.

One change was globalization. Companies now face more competition than ever — both here and overseas.

Kenworthy: The increase in competition has made it a lot more important for firms to try to rein in labor costs or prevent them from rising.

And unions aren’t as strong as they used to be. Technology has eliminated some jobs, and it’s become a barrier for many people looking for work.

Stefano Scarpetta: Technology has rewarded more those with high levels of skills, compared with those with relative low levels of skills.

Stefano Scarpetta wrote the report. He says taxes and benefits can play a big role in reducing income inequality. But tax rates have gone down for high-income earners in many countries. And as countries cut back, social programs may be the first to go.

In Washington, I’m David Gura for Marketplace.

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