UK austerity widens poor-rich gap: OECD

The Organization for Economic Cooperation and Development (OECD) has warned about a worsening poor-rich gap in Britain due to Londonâ„¢s insistence on its austerity drive.

The thinktank said in a report on the developed countriesâ„¢ response to the global economic slowdown that the financial crisis is increasing inequality and poverty.

OECD added inequality Å“remained pretty steady” in Britain between 1995 and 2007, but soared between 2007 and 2010, when the world was grappling with the financial meltdown.

New studies show that back in 2010, the top 10 percent of British families earned an annual £53,600 on the average that was 10 times higher than the lowest 10 percent households.

This is while, the richest earned nine times higher than the poorest in 2005.

“The concern is inequality will rise much more once the full impact of public spending cuts is felt,” said Michael F?rster, senior analyst at the OECD social policy division.

He further warned that the austerity, especially the welfare cuts, will Å“fall on the back of the poor population groups” in Britain, triggering a wider poor-rich gap in the short term.

“The theory is that in the medium term more people will go into the labour market and this low-wage employment will help equalize household incomes,” he added.

However, he said it remains a theory as it has so far only worked for Germany stressing poverty rose among British 18 to 25-year-olds by a percentage point annually in the three years to 2010.


This article originally appeared on : Press TV