(MENAFN - The Peninsula)
Stockholm: Economic inequality has grown faster in Sweden than any other developed country in recent decades as top earners have cashed in on rising asset prices while immigrants and the unemployed have been left behind, the OECD said yesterday.
It said, however, that the gap between top and bottom earners remains tighter in Sweden than most countries.
But while real incomes for the richest 5 percent of the population have grown about 70 percent since 1990, the poorest 5 percent have seen only a 10 percent increase.
'Income inequality rose more rapidly than in any other OECD country since the 1990s, the report from the Paris-based Organisation for Economic Co-Operation and Development said. 'The rise in income inequality needs to be contained.
Sweden has widely been seen as an example of a country that has got it right on fairness, using high taxes to smooth out income disparity and support the more disadvantaged through high welfare spending. Speaking at a meeting of wrld leaders recently, Swedish Prime Minister Stefan Lofven said there was widespread interest in the 'Swedish model of high taxes and social transfers.
'Equality is not only a buzzword but is becoming the key word in addressing sustainable development, he said.
But a rising stock market since deregulation in the 1990s and surging house prices have benefited those with financial assets, while favourable capital gains taxes in relation to income taxes have further benefited the wealthy. The OECD also pointed to the fact that increases in benefits have lagged wages while high levels of entry wages make it hard for many lower skilled individuals, many of whom were born outside Sweden, to get jobs.
'The share of the population with incomes below the relative poverty line almost doubled, from 7 percent to 14 percent between 1995 and 2013, the OECD said. 'More than 30 percent of the foreign born fell below the poverty line.
Sweden has experienced a huge increase in immigration this century.