How the financial crisis made everyone poorer

THE financial crisis tore through economies and shattered lives. Only now are we starting to see the full extent of the damage. The economic hardship fell disproportionately on the poorest, according to figures released today by the OECD. An insightful metric is the extra spending-money people have (officially known as household disposable income). Between 2007 and 2011, the poorest in society saw their money either fall more during the crisis, or gain less during the recovery, than the wealthier people.

In Spain, for example, the richest in society suffered a modest decline in disposable income, while the poorest were heavily stung. By contrast, in egalitarian Germany, everyone’s spending money increased slightly. In the US and France, the rich got richer and the poor got poorer—which may explain recent unrest, from the “Occupy” movement exclaiming “We are the 99 percent” to demonstrations across France. And the data leans in favour of Thomas Piketty’s thesis that wealth inequality is increasing: certainly the period of the financial crisis upholds that depressing view.