Mainstream economists and politicians in the United States don’t want to talk about the problem of inequality. But the Paris-based economists who compiled the latest Organization of Economic Cooperation and Development economic survey of the United States are clear: U.S. levels of income inequality and relative poverty are among the highest within the OECD.
These are some of their major findings:
1. Real compensation growth has lagged far behind the gains in labor productivity.
2. Tertiary school completion rates have stagnated in recent decades, based in part on poor secondary school education and in part on the fact that many students have to drop out for financial reasons.
3. Workers have been hurt by the offshoring of jobs as well as skill-biased technical change, the decline in unions, and a reduction in the real minimum wage.
4. Average tax rates have significantly declined for the most wealthy and, in general, the U.S. tax-and-transfer system reduces income inequality and relative poverty by much less than in many other OECD countries.
The OECD’s 2012 survey of the U.S. economy leaves no doubt: we’re unequal in the USA.