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Saturday, October 29, 2011

Germany: A study on income inequality and how the US shapes up against others

PJ: With Occupy Wall Street making headlines, catching the admiration from the left and the admonishment from the right, it is important to stay grounded. This report from Germany's independent research organization: Bertelsmann Stifung, is a good place to start since neither US republicans or US democrats had a hand it its development. Out of 31 countries studied, the US ranks 27th in Social Justice only ahead of Greece, Chili, Mexico and Turkey.


Bertelsmann Stifung

Social Justice in the OECD –
How Do the Member States
Compare?
Sustainable Governance Indicators 2011


Key Findings:

A cross-national comparison of social justice in the OECD shows considerable variation in the extent to which this principle is developed in these market-based democracies. According to the methodology applied in this study, Iceland and Norway are the most socially just countries.1 Turkey, which ranks among the bottom five in each of the six targeted dimensions, is the OECD’s least socially just country. The findings of the cross-national study can be summarized as follows:

The north European states comprise a league of their own. Leading by far on the Justice Index, Iceland, Norway, Denmark, Sweden and Finland achieve particularly good results in the dimensions of “access to education,” “social cohesion” and “intergenerational justice.” Yet even in Scandinavia, there are some areas in want of action. Despite its overall strong showing, Sweden, for example, struggles with a rate of youth unemployment three times as high as the general unemployment rate.

Most central and northwestern European states rank in the upper midrange, although the Netherlands (6), Switzerland (7) and France (10) rank higher than Germany (14).
The east-central European OECD members Hungary (17), Poland (20) and Slovakia (24) rank in the lower midrange together with their southern European neighbors. The high-ranking outlier here is the Czech Republic (11) due to its very low poverty levels in cross-national comparison.

All southern European countries lie considerably below the OECD average, with Turkey and Greece in the bottom group of the ranking. In both these countries, fair access to education and intergenerational justice (i.e., equity in burden-sharing across generations) are particularly underdeveloped.

Canada (9) is the top performer among the non-European OECD states. Its high ranking can be attributed to strong results in the areas of education, labor market justice and social cohesion.

Australia (21), despite its relatively inclusive labor market, is struggling with larger problems in poverty prevention and educational justice, and is therefore lagging behind in terms of creating a sound framework for social justice.

Japan (22) and South Korea (25), where income poverty is relatively spread, fail to rank above the bottom third of the Justice Index. Japan also receives particularly low marks for intergenerational justice.

Poverty prevention

The midfield mainly comprises continental European welfare states such as Germany, Belgium or Switzerland. Most Anglo-Saxon welfare states find themselves in the lower midfield followed by Southern European countries. At the bottom of the ranking, we find South Korea, Turkey, Australia, the United States – where 17.3 percent of the population lives on less than 50 percent of the net median
income – Chile and, finally, Mexico bringing up the rear with an overall poverty rate of 21 percent.

In terms of preventing old-age poverty, the picture is mixed. South Korea lands at the bottom of the ranking. Some 45 percent of the country’s citizens over 65 years of age must survive on incomes less than one-half of the national median income. According to the latest available OECD figures (see appendix p. 49), old-age poverty rates are also high in Australia (39.2 percent), Mexico (29
percent), New Zealand (23.5 percent), Chile (22.8 percent), Greece (22.7 percent) and the United States (22.2 percent), all of which lie far above the 31 countries’ average of 14.5 percent. In the United States, which still represents the largest economy in the world, poverty rates among children and the old are above 20 percent. These high rates are a crushing burden for the country to
bear, particularly in the face of its drastically high level of national debt and stagnating economy. In contrast, old-age poverty seems to be barely relevant in the Netherlands (2.1 percent) and Luxembourg (2.3 percent).


http://www.sgi-network.org/pdf/SGI11_Social_Justice_OECD.pdf

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