IRELAND EXPERIENCED one of the sharpest falls in household market income between 2007 and 2010, according to a survey of 30 countries, published by the Organisation for Economic Co-operation and Development (OECD) today.
The report warns of the growing risk of income inequality in the 30 OECD countries, which has increased by more in the first three years of the recession to 2010 than it had in the previous 12 years.
Compared to countries like Chile, Mexico and Turkey, Ireland’s level of income inequality was relatively balanced though the report said the effect of unemployment was particularly large in Ireland with self-employment income also declining significantly.
The welfare state has “cushioned the blow” for many according to the report but it warns that further social spending cuts in OECD countries risk causing greater inequality and poverty in the years ahead.
Gap between the rich and poor
The richest 10 per cent of the population in the 30 countries countries earned 9.5 times the income of the poorest 10 per cent in 2010, up from 9 times in 2007. The gap is largest in Chile, Mexico, Turkey, the United States and Israel, and lowest in Iceland, Slovenia, Norway and Denmark.
Ireland experienced one of the largest falls in average market income during the period with incomes in poorer households fell by more than 5 per cent.
Between 2007 and 2010, average relative income poverty in OECD countries rose from 13 to 14 per cent among children and from 12 to 14 per cent among youth, but fell from 15 to 12 per cent among the elderly.
Since 2007, youth poverty increased considerably in 19 OECD countries with an increase of 4 per cent in Ireland. Child poverty has risen in 16 OECD countries since 2007, with increases exceeding 2 points in Turkey, Spain, Belgium, Slovenia and Hungary.
“These worrying findings underline the need to protect the most vulnerable in society, especially as governments pursue the necessary task of bringing public spending under control,” said OECD Secretary-General Angel Gurría.
“Policies to boost jobs and growth must be designed to ensure fairness, efficiency and inclusiveness. Among these policies, reforming tax systems is essential to ensure that everyone pays their fair share and also benefits and receives the support they need.”
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