Richard Exell
Divided We Stand: Why Inequality Keeps Rising, today’s report from the Organisation for Economic Co-operation and Development, illuminates the debate on benefit levels and re-distribution. Of course, most of the initial comments have focused on the headlines about this country’s relative performance. The OECD has produced a very useful ‘Country Note‘ on the UK, with a stunning take-away quote up at the top:
Income inequality among working-age persons has risen faster in the United Kingdom than in any other OECD country since 1975. From a peak in 2000 and subsequent fall, it has been rising again since 2005 and is now well above the OECD average.
And the data shows that the UK is up there with Mexico, Turkey, the USA and Israel as one of the titans of inequality:
(Inequality here is measured using the Gini coefficient.) But there’s also interesting reading further down and in the detail of the report. In particular, there’s a vital discussion about the causes of the UK’s inequality, which suggests that cuts in benefit rates played a major part. The policy prescriptions in the main report says that it is going to be hard to make progress on inequality without redistribution – higher taxes and benefits. And promoting social mobility is difficult if inequality is left untouched.
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