Wednesday, April 20, 2011

OECD results - INCOME, INEQUALITY & POVERTY

INCOME
The United States has the 2nd highest household income after taxes and benefits in the OECD (31000 US$) after Luxembourg. France is just above OECD average (21000 US$) - that is in part due to the higher taxes and benefits.

INEQUALITY & POVERTY :
But US income is distributed relatively unequally with the 4th highest rate of income inequality in the OECD. This is not really a surprise.
The US comes 29th out of 31 countries in terms of poverty level, and France is 6th (before Denmark, Sweden, Czech Republic, Austria & Norway) - 1/5 of the American population is considered poor.

The average income of the richest 10% in the U.S. is the highest level in the OECD. However, the poorest 10% of the US citizens have an income about 20% lower than the average for OECD countries. (see here)

According to the OECD, this is due to 2 factors :
- greater distribution of earning in the U.S. than in other OECD countries (by 20% since the 1980s)
-the low level of social benefits (such as unemployment and family benefits) : only 9% compared to 22% in the OECD.


Poverty rate

(persons living with less than 50% of median equivalised household income.)

GINI coefficient

France

7.2

0.29

USA

17.3

0.38

OECD average

11.1

0.31


However, in France – the poorest 20% get just 16% of spending on benefits, which means that a great deal of the social spending gets to the middle-class.
France is one of only five OECD countries where income inequality and poverty have declined over the past 20 years. (see here)

GENEROSITY

The French are not very generous : only 31% of them give money, help strangers, or do volunteer work, compared to 60% of American and the OECD average of 39%.

This, I believe, is correlated to the high taxes and social benefits in France as the national consensus is that social problems are the government's responsibility through taxes - not the private citizens'. (A lot of them will use the high level of taxes as a reasoning for not giving more - "On paie déjà assez!)

So "fraternité" is supposed to be a Republican ideal secured by the government not an individual requirement.

The same applies to the wealthy - not any time soon will a French Bill Gates give half his fortune to a foundation. Contrary to the U.S. philanthropists have always been a rare kind in France.



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