In American politics, the issue of income inequality comes up frequently. As wealth continues to concentrate at the top – now the wealthiest 10% of American households control nearly 75% of household net worth – the middle continues to shrink, and some previously thriving metro areas have been hard hit by extreme poverty.
But income inequality is not a uniquely American issue. Nations from all six populated continents have massive wealth gaps between their richest and poorest residents. Many of the most economically productive countries in the world have not been able to devise a way to stop, or even slow, the growing inequality.
Income inequality across a population is quantified using the Gini coefficient measure. On the Gini scale, inequality is measured from 0 to 1, where 0 represents a perfectly equal society and 1 represents extreme inequality where a single individual controls all the wealth.
24/7 Wall St. reviewed the Gini coefficient of 42 countries from the Organization for Economic Cooperation and Development to identify the countries with the widest gaps between the rich and the poor. Both OECD member states and affiliated states were considered. OECD members tend to be high-income nations, and income inequality may be even more pronounced in poorer countries not considered.
• Gini coefficient: 0.35 (pretax + transfers: 0.48)
• Unemployment rate: 8.7%
• GDP per capita: $23,710
• Poverty rate: 16.8%
• Population: 1.9 million •
Latvia’s Gini coefficient of 0.35 is the 15th highest among the 42 OECD member states and affiliates for which data exists. The Baltic nation narrowly edged out Israel for a spot on this list. Latvia may struggle in the future to sustain economic growth as it faces a declining population. The nation’s population contracted by nearly 0.9% over the last year. The decline in population will likely translate into a decline in the workforce and less economic activity, which could hamper economic growth in Latvia.