Chart of day: Rich gain most during post-crash


Click on the image to enlarge.

Click on the image to enlarge.

From the latest Income Inequality Report from the Organisation for Economic Co-operation and Development report on growing income disparities in the 36-nation group:

Between 2007 and 2010, average real income fell by 2.1% on average, with a stronger decline at the bottom (-5.3%) and the top (-3.6%). While the recovery since 2010 improved average incomes, more rapid growth of top incomes (2.3%) and weaker improvement at the bottom and at the middle (1.1% and 1.3%) increased inequality, although only marginally.

By 2013/14, incomes at the bottom of the distribution are still well below pre-crisis levels while top and middle incomes had recovered much of the ground lost during the crisis.

During the economic downturn, low- and high-income households lost the most. During the recovery, high-income households gained more due
to unequal growth of labour incomes and changes in redistribution.

El País reports on the growing income gap in Spain, one of the nation’s hardest hit by the Great Recession:

Inequality is one of the biggest consequences of the economic crisis in Spain. The latest Income Inequality Update by the Organization for Economic Cooperation and Development (OECD) shows that between 2010 and 2014, Spanish workers with the lowest salaries suffered the greatest wage cuts of all OECD member states after Portugal.

“In Spain, despite the prolonged period of strong job creation, stimulated by the 2012 labor reform, persistently high levels of long-term unemployment, falling real wages and persisting labor market segmentation translated into a sharp fall of labor incomes, especially at the bottom,” reads the report, which was released on Thursday.

Spain also has the highest rate of poor workers after Turkey and Chile.

“Higher-income households benefited more from the recovery than those with middle and lower incomes,” states the study. “The fruits of the economic recovery have not been evenly shared.”

In Spain, inequality grew in 2014 even though the economy was growing at a rate of 1.4%. The reports finds that the average Gini coefficient of disposable household income – “a standard measure of inequality that takes the value of 0 when everybody has the same income and 1 when one person has all the income” – reached 0.346. In 2007 that figure was 0.324 while in 2012 it was 0.335, according to the OECD.

In 2014, the bottom 10% of workers in Spain earned just 2% of all income in the country while the top 10% earned 24.7%.

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