The rich are winning the global economic recovery
LONDON (CNNMoney) — The rich are winning the economic recovery.
That’s according to the Organisation for Economic Co-operation and Development, which says in a new report that the poor — who were hit hard by the financial crisis — have been left behind in the global recovery.
“The fruits of the economic recovery have not been evenly shared,” the OECD said Thursday.
The group found that the bottom 10% of earners in developed countries saw their real incomes fall by 16.2% between 2007 and 2010. The incomes of the top 10% fell by only 4.6% over the same period.
The recovery has also produced unequal results. Between 2010 and 2014, the incomes of the bottom 10% have risen by only 1.6% compared to the 5.2% growth rate enjoyed by the highest earners.
The end result is more income inequality. The wages earned by the top 10% had recovered to pre-crisis levels by 2014, while the same year the poorest earned 14% less than they did before the crisis.
OECD data show that the U.S. is among the most unequal countries. Americans with incomes at the top 20% are earning 8.7 times more than those in the bottom 20%.
Nordic countries Iceland, Norway and Denmark have the lowest inequality among developed nations. There, the top 20% earn roughly 3.5 times more than the bottom 20%.
World leaders agree that income inequality is a major problem. At the most recent G20 summit in China, the heads of the world’s 20 biggest economies called for more action to make sure economic growth is inclusive.
In a separate study published on Thursday, the Institute of Fiscal Studies said that average earnings in the U.K. will not reach the pre-crisis levels before 2021.
A full recovery will be delayed further by the country’s separation from the European Union.