OECD report: Inequality worst in Israel and US

When it comes to inequality, Israel is second only to the United States among developed nations, an OECD report released Thursday said.

In Israel, the richest 10 percent earn 15 times more than the poorest 10 percent, a lot more than the average gap between haves and have-nots among OECD nations, which is 9.6 times.

The average income of the top 10 percent in the US was 19 times higher than that of the bottom 10 percent in 2013. The US figure rose from just 11 times higher 30 years ago, the OECD says.

An increase in part-time and temporary work contracts as well as self-employment was seen as an important driver of increased inequality, with half of all jobs created in OECD countries between 1995 and 2013 falling into these categories.

The report also found that as inequality rose, there were significant falls in educational attainment and skills among families in lower income groups, leading to much wasted potential and lower social mobility.

The report noted that Israel is failing to increase sufficiently the participation of women in the workforce, a key driver for reducing inequality.

“There’s a [long] way to go in Israel to get the female employment rates higher,” said Mark Pearson, the author of the report.

Policies to improve women’s treatment in the labor market and measures to reverse the growing share of low-quality, “dead-end” jobs are key to reducing income inequality and unlocking more economic growth, the OECD says.

“Put simply: rising inequality is bad for long-term growth,” the OECD concludes in the report, which is titled “In It Together, Why Less Inequality Benefits All.”

The problem is also acute in the US: Between 2008 and 2013, real average household disposable income at the top 10 percent rose 10.6 percent, while in the bottom 10 percent it fell 3.2 percent, the OECD said. Austria, Denmark and France are other countries where rising income at the top has been accompanied by falling incomes at the bottom.

The average income of the top 10 percent in the US was 19 times higher than the bottom 10 percent in 2013, far higher than the OECD average of 9.6 times. The US figure rose from just 11 times higher 30 years ago, the OECD said.

“We have reached a tipping point. Inequality in OECD countries is at its highest since records began,” said OECD Secretary-General Angel Gurria.

Times of Israel staff, AP and AFP contributed to this report.