When It Comes to Inequality, the U.S. Is Above Average

America has one of the highest rates of poverty among wage-earners in the OECD.

On Jan. 8, 1964, President Lyndon B. Johnson declared an "unconditional war on poverty in America." Fifty years later, we're still fighting.

On Jan. 8, 1964, President Lyndon B. Johnson declared an "unconditional war on poverty in America." Fifty years later, we're still fighting.

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The U.S. is the land of rugged individualism, and new figures show the country stands out among its peers...but not necessarily in positive ways.

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First, the good news: by a long shot, the U.S. has the highest disposable income per capita among Organization for Economic Cooperation and Development member nations, a group of developed countries. A new OECD report shows the U.S. had disposable income at $34,050 per person as of 2011, compared to the OECD average of $20,882. That also bests the nearest country, Norway, by nearly $6,000. 

But that high income doesn't mean all U.S. households are rich. In fact, a large share are poor, despite participation in the workforce. Among countries the OECD studied, the U.S. (represented in orange in the chart below) has the sixth-highest poverty rate among households with at least one worker, with 12.1 percent. The OECD average is less than two-thirds that level, at 8.1 percent. Additionally, for households in which all adult members work, the U.S. has the fourth-highest poverty rate.

The U.S. is also well above the OECD average in terms of inequality. As measured by the Gini Index, a common measure of inequality, the U.S. (marked with the orange bar below) has an inequality level that is nearly 23 percent higher than the OECD average (represented by the black bar) and is the fifth-highest among all member nations.

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In addition, the U.S.'s level of inequality is on the rise, a phenomenon not shared by many other high-inequality countries. For three of the four nations with higher inequality levels than the U.S. inequality is falling – sharply, in Turkey and Mexico's cases, and moderately in Chile, as well. Complete data were not available for Russia, the fourth nation. 

How can the U.S. simultaneously be so rich and so poor, relative to its peers? One large factor is that the highest earners are pulling away from the rest of the nation. Recent figures from the Social Security Administration showed the U.S. median wage to be at $27,519 last year, meaning half of all Americans earn less than that amount. The figures, first reported by Al Jazeera America, also show that average earnings last year were nearly $42,500 – more than $15,000 higher than the median, a sign that high earners are pulling the average away from the wage level that is the norm for many Americans.

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