Income inequality has reached its highest level in more than 30 years in the Organisation for Economic Cooperation and Development (OECD) member states.
The organisation says in a new report that the richest 10% of the population in the OECD now earn 9.6 times the income of the poorest 10%, up from seven times in the 1980s and nine times in the 2000s.
The report also shows wealth is even more concentrated at the top than income, exacerbating the overall disadvantage of low-income households.
In 2012, the bottom 40% owned only 3% of total household wealth in the 18 OECD countries with comparable data. By contrast, the top 10% controlled half of all total household wealth and the wealthiest 1% owned 18%.
"We have reached a tipping point. Inequality in OECD countries is at its highest since records began," said OECD secretary-general Angel Gurría.
"The evidence shows that high inequality is bad for growth. The case for policy action is as much economic as social. By not addressing inequality, governments are cutting into the social fabric of their countries and hurting their long-term economic growth."
The OECD has 34 member countries, including most of the European Union nations as well as developed economies such as the US, Canada, Australia and Japan.
The organisation blamed the increasing share of people working part-time, on temporary contracts or self-employed as an important driver of growing inequality. It also stressed the importance of a reduced gender gap to address income inequality.
The OECD also called on governments to promote gender equality in employment, broaden access to better jobs, and encourage greater investment in education and skills throughout working life in order to tackle the rising inequality.
Read the full report below