The Best Places for a Working Woman

According to The Economist, the United States ranks 12^th out of 26 wealthy countries for a woman to work. The results were determined using five indicators including how many men and women who had secondary education, the percentage of women who participate in the labor force, the gap between the earnings of men and women, the proportion of women in high level positions, and the cost of child care compared to the average wage. 

 

New Zealand came in first place, followed by Norway, Sweden, Canada, and Australia. Although Finland placed 7^th overall, it performed the best on measures regarding education. In Sweden, 78% of women participate in the labor force marking the highest rate out of all 26 countries. In Spain, the wage gap was only 6%, the lowest among all the countries. In contrast, Japan and South Korea were ranked quite low because there are few women in the country who hold high level senior positions.

Chinese Leaving in Droves for Other Developed Nations

On October 31, the New York Times highlighted China's difficulties in keeping residents from emigrating to other developed nations. While China's economy has experienced robust economic growth in recent years, more and more Chinese continue to leave the nation in search of a new life.  The lack of religious freedom and the lure of a more liberated social and economic environment has driven an increasingly high number of Chinese out of the country. In 2010, 508,000 Chinese departed for one of the 34 developed countries that compose the Organization for Economic Cooperation and Development (OECD). The U.S. welcomed 87,000 permanent residents in 2011, up from 70,000 in 2010.  But this feeling of uncertainty and unrest is not a one-way street.  The lethargic recoveries hampering the economies in the West has driven Chinese students back home in droves. In 2011, the number of students returning to China was up 40% from the previous year. Even still, it appears China is experiencing a sort of "brain drain." The United States' investment-based green card program allows foreigners to obtain a green card if they invest over $500,000 into American businesses. Chinese citizens obtained well over 2,000 of these specialized permits, more than double the investment-based green cards of all other nationalities combined.  

Compared With OECD Countries, Latin America Trails in Effort to Reduce Poverty, Inequality

The Economist recently summarized a report by the OECD which supports findings that "compared with rich countries, Latin American countries still fall short" in the fight to "reduce poverty and inequality." Even within the OECD, which The Economist recognizes as "a club of mostly rich countries," it is a Latin American country, Chile, which performs the worst in these efforts.

The report, according to The Economist, identifies Chile as the OECD's "most unequal member." (Although Brazil is shown in the visual, it is not an OECD country). Further, Chile "also finished third from the bottom, ahead only of Mexico and Israel, in relative poverty, measured by the share of the population earning less than half the median income."

The Economist notes, "Governments can reduce poverty and inequality through taxes and cash transfers." It argues that Chile does not effectively reduce poverty or inequality because of deficiencies in these areas. In Chile, "Government spending on health, education and social policies is low, around 16% of GDP; the OECD average is around 27%." And that's not Chile's only problem: "Tax evasion by corporations and individuals alone is estimated to cost the government some 2.5% of GDP."

The Chilean government has introduced a program, Ingreso Ético Familiar, aimed at fixing these problems. But The Economist points out that "the new cash transfer programme only targets the extreme poor." So how could these problems in Chile be better targeted? The Economist suggests, "More efficient and progressive taxes would raise revenues and reduce inequality." Looking forward in Chile, The Economist notes, "Better job opportunities and higher quality education are needed to improve labour productivity and boost growth."

Income Inequality Continues to Rise in OECD Countries

A recent OECD report shows that the wealth gap in most rich countries continues to grow wider, consistent with an upward trend during the past few decades. The Economist blogged: "The Gini coefficient, a measure of inequality in which zero corresponds to everyone having the same income and one means the richest person has all the income, increased by almost 10% from 0.29 in 1985 to 0.32 in 2008, for working-age people in OECD countries."

Changes in wages have benefited the top 1% of earners most, but relative gains are not limited to them, as "the pay of the richest 10% of employees has increased at a far greater rate than that of the poorest 10% of employees." Gains in technology, because they "disproportionately benefit...high-earning workers," have contributed to increases in income inequality. High earners tend to marry other high earners, which only exacerbates this growing inequality. In addition, "governments are doing less to redistribute wealth than they have done in the past."

The report, however, shies away from identifying globalization as the cause of increased income inequality. Instead, as summarized by the Economist, it argues that "one of the many reasons for the rise in income inequality is that more people are in work now (or at least they were before the financial crisis hit) compared with the 1970s."

Within-Country Inequality Rising in Rich Countries

A new report from the Organisation for Economic Co-operation and Development -- a club of the world's wealthiest nations -- shows that across the developed world, income inequality between households is on the rise. Over the past twenty years a confluence of events have biased big economies towards wealthier individuals. Low-wage workers in rich countries now face competition from cheaper workers in poorer countries and from computerization and mechanization of many low-skilled jobs. As a result, they have seen incomes stagnate, and their working hours decline: a trend exacerbated by the Thatcher/Reagan wave of neo-liberalism that loosed regulations intended to protect these employees in many countries. Meanwhile, wealthier people have benefited disproportionately from technological advances and globalization and have made money through capital gains on assets.

In addition to the familiar refrain of globalization, technology and neo-liberalism, generally used to explain the rise in within-country inequality (and corresponding decline in between-country inequality), the authors of the OECD report offer another possible explanation for rising households inequalities. As more and more households include two incomes, the gap in household income will increase given that most rich people marry other rich people and most poor people marry other poor people.

The OECD report has been widely discussed throughout the world.