Gap Between Rich and Poor Keeps Widening

An article by James    1 Comment

New data out of the US shows that the gap between rich and poor has grown wider:

the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest parts of the population in 2007 was the highest it’s been in 80 years, while the share of income going to the middle one-fifth of Americans shrank to its lowest level ever (source: Huffpo).

This comes just after data from the UK points to a similar trends.

“The divide between rich and poor is greater after 13 years of Labour rule than at any time since the Second World War”

While countries appear to get richer, the way the income is distributed is often difficult to determine – whether a developed or developing country.

Another trend worth noting is the ratio of CEO salary to average worker. Recent stats point to a ratio of 319 to 1 in the US. That means the average CEO gets paid 319 times the amount of the average American worker.  In the 1970s it was something like 30 to 1.

I’m not sure of the New Zealand statistics, however I don’t believe they are as extreme as this. Over the last 100 years or so I would argue that all people in the developed world have increased their standard of living, with small sections of the population jumping way ahead of others.

It is worth remembering those in developing nations who have barely moved forward at all, and some (such as Sub-saharan African countries) that have moved backward.