WHAT IS IT?
The gap between rich and poor is getting bigger in the world's richest countries - and particularly the United States - as top earners' incomes soar while others' stagnate, according to a 30-nation report released Tuesday.
In a 20-year study of its member countries, the Paris-based Organization for Economic Cooperation and Development said wealthy households are not only widening the gap with the poor, but in countries such as the U.S., Canada and Germany they are also leaving middle-income earners further behind, with potentially ominous consequences if the global financial crisis sparks a long recession.
Inequality threatens the "American Dream" of social mobility - children doing better than their parents, the poor improving their lot through hard work - which is lower in the U.S. than countries such as Denmark, Sweden and Australia, the report "Growing Unequal? Income Distribution and Poverty in OECD Countries"found.
The two decades covered in the study - 1985-2005 - saw the development of global trade and the Internet, and a period of overall strong economic growth. The countries covered are mostly developed nations, especially in Europe.
The United States has the highest inequality and poverty in the OECD after Mexico and Turkey, and the gap has increased rapidly since 2000, the report said. France, meanwhile, has seen inequalities fall in the past 20 years as poorer workers are better paid.
OECD Secretary-General Angel Gurria said that the study, which took three years to complete, would be useful to policymakers because it is coming out just as the world is undergoing "the worst crisis in decades."
With several OECD countries already in recession, the "key question" raised by...