The multi-billion dollar football industry was shaken to its core earlier this month when European police and prosecutors said hundreds of games may have been rigged in a match-fixing syndicate being run from Singapore.

Helping soccer’s governing bodies tackle the problem, companies such as Sportradar analyse betting odds movements to detect match-fixing, while FIFA has also set up an inhouse Early Warning System (EWS).

In Europe, a group of 15 leading bookmakers work together in the European Sports Security Association (ESSA), sharing information on suspicious betting patterns via e-mail.

But the scale of the problem, with World Cup qualifiers and Europe’s flagship Champions Leagues under suspicion, as well as games in Asia, Africa and Latin America, necessitates a global solution, says former FIFA security director Chris Eaton.

“A warning system has got to be global – gambling is global,” he told Reuters. “It’s true to say that ESSA will pick up movements in the legal gambling area – for the most part it is illegal betting where the fixes are conducted.”

Sportradar is part of an emerging industry that has grown up around official efforts to stamp out fixing in sports, especially football. The firm’s employees monitor 300 or more bookmakers and more than 30,000 games a year for European soccer’s governing body UEFA.

Ben Paterson, Sportradar’s Integrity Manager, said his firm identifies between 250 and 300 suspicious football games every year, and that those figures show no sign of dropping off.

“A lot of people are doing a lot of things to curb match fixing, yet we still see the numbers maintained, if not increasing slightly,” he added.

Although ESSA covers only a small part of the global market, it says it can give specific details on who is betting and where bets are placed to help prevent fixing before a game.

Bookmakers are linked by an email alerting system allowing its members to flag details of suspicious betting to each other and pass on details to sports bodies with whom they have ties.

Its advantage is that bookmakers know who made the bet and where. Its downside is that it is limited to Europe.

‘BLUNT INSTRUMENT’

FIFA’s system can monitor betting patterns but without the level of specific detail ESSA has. EWS also uses a network of contacts around the world to pass on intelligence and runs a whistleblower hotline. As well as FIFA games, it also monitors Major League Soccer in the United States and Japan’s J League.

“EWS in FIFA is a small and capable organisation but it seems to me that they don’t have a substantial field presence,” said Eaton.

“Sportradar are probably the best there is for the present. While they are a commercial organisation, I would rather see them operating within an independent global body independent of sport and betting organisations.”

Detection efforts are struggling to keep up, experts say, because of poor coordination between gambling companies and soccer’s ruling bodies, while a lack of regulation in Asia means vital data is simply unavailable.

Mike O’Kane, chairman of ESSA, wants big Asia betting houses like Sbobet and Ibcbet to join forces with their European counterparts to fight fixing.

“I do call on all the European betting operators, in fact all global licensed operators, who are serious about protecting their company to join ESSA,” he said.

Philippine-based Sbobet and Ibcbet declined to comment on the issue when contacted by Reuters.

A German investigator who helped jail 14 people for match-fixing was critical of the systems.

“Coming from our experiences of the last three years we have to say that these systems are not productive for our investigations as evidence in court,” said Friedhelm Althans, investigator in the German city of Bochum.

“They are basically blunt instruments which don’t yield results,” he told Reuters.

‘MADE FOR CORRUPTION’

Football has replaced horse racing as the staple of the bookmaking business, helped by technology that allows punters to bet live online while watching matches on television.

Sportradar’s Paterson said the explosion of the online industry led to particular match-fixing trends appearing.

Ninety percent of fixed games will see suspicious patterns in live betting, usually with the Asian bookmakers, rather than any pre-match betting.

The mechanics of Sportradar’s system rest on complex algorithms, a global network of 150 freelance informants and decades of analysts’ experience, but the principle behind it all is relatively simple.

Most football betting happens during the match, when bookmakers increase odds and offer a chance of higher payouts.

As the betting is live, the odds are reactive. If a large amount of money is placed on a particular bet, bookmakers respond by lowering odds. If they lower the odds far enough, Sportradar’s system triggers an alert and analysts get to work.

If a match is deemed suspicious, Paterson’s team will gather round a whiteboard and thrash out the details.

“If we see some suspicious betting, we try to exhaust all avenues of why that betting could be legitimate,” said Paterson. “Most of the time we’re able to find a legitimate reason for these.”

Some, such as a match that ends 0-0 and has no corners, no throw ins and no free kicks, are hard to defend.

“All this does though is raise the flag that this match is fixed,” Patterson said. “It’s the start of an investigation.”

Monitoring in Asia is far weaker and Professor David Forrest, an expert on the economics of sports betting, said the conditions were ripe for match-fixing to flourish in the region.

“Most of the competitions targeted are competitions where there is low pay and yet there is a very, very big unregulated betting market in Asia where criminals can make lots of money,” said Forrest. “It’s made for corruption.”

The special economic zone of Cagayan in the Philippines is home to the top five Asian bookmakers who, due to a lack of stringent regulations, are under no obligation to file accounts, keep memoranda of understanding with sporting bodies or ensure ‘Know Your Customer’ principles like European counterparts.

Ralf Mutschke, FIFA’s head of security, says better coordination with law enforcement agencies would also help. Efforts to tackle match-fixing are hampered by the fact that it is not a criminal offence in every country.

Laila Mintas, head of legal at FIFA’s EWS, told a gaming conference in London this month: “We would appreciate the European Union taking a lead by setting the minimum national regulations on match-fixing.”

For Sportradar’s Paterson, match-fixing has become such an issue that left unchecked it could seriously challenge the game’s integrity.

“Who wants to go to a football match where people know the results already? You might as well go and watch worldwide wrestling.”

(Additional reporting by Shadia Nasralla and Pedro Redig; Editing by Peter Rutherford)

The multi-billion dollar soccer industry was shaken to its core earlier this month when European police and prosecutors said hundreds of games may have been rigged in a match-fixing syndicate being run from Singapore.

Helping soccer’s governing bodies tackle the problem, companies such as Sportradar analyse betting odds movements to detect match-fixing, while FIFA has also set up an inhouse Early Warning System (EWS).

In Europe, a group of 15 leading bookmakers work together in the European Sports Security Association (ESSA), sharing information on suspicious betting patterns via e-mail.

But the scale of the problem, with World Cup qualifiers and Europe’s flagship Champions Leagues under suspicion, as well as games in Asia, Africa and Latin America, necessitates a global solution, says former FIFA security director Chris Eaton.

“A warning system has got to be global – gambling is global,” he told Reuters. “It’s true to say that ESSA will pick up movements in the legal gambling area – for the most part it is illegal betting where the fixes are conducted.”

Sportradar is part of an emerging industry that has grown up around official efforts to stamp out fixing in sports, especially soccer. The firm’s employees monitor 300 or more bookmakers and more than 30,000 games a year for European soccer’s governing body UEFA.

Ben Paterson, Sportradar’s Integrity Manager, said his firm identifies between 250 and 300 suspicious soccer games every year, and that those figures show no sign of dropping off.

“A lot of people are doing a lot of things to curb match fixing, yet we still see the numbers maintained, if not increasing slightly,” he added.

Although ESSA covers only a small part of the global market, it says it can give specific details on who is betting and where bets are placed to help prevent fixing before a game.

Bookmakers are linked by an email alerting system allowing its members to flag details of suspicious betting to each other and pass on details to sports bodies with whom they have ties.

Its advantage is that bookmakers know who made the bet and where. Its downside is that it is limited to Europe.

‘BLUNT INSTRUMENT’

FIFA’s system can monitor betting patterns but without the level of specific detail ESSA has. EWS also uses a network of contacts around the world to pass on intelligence and runs a whistleblower hotline. As well as FIFA games, it also monitors Major League Soccer in the United States and Japan’s J League.

“EWS in FIFA is a small and capable organisation but it seems to me that they don’t have a substantial field presence,” said Eaton.

“Sportradar are probably the best there is for the present. While they are a commercial organisation, I would rather see them operating within an independent global body independent of sport and betting organisations.”

Detection efforts are struggling to keep up, experts say, because of poor coordination between gambling companies and soccer’s ruling bodies, while a lack of regulation in Asia means vital data is simply unavailable.

Mike O’Kane, chairman of ESSA, wants big Asia betting houses like Sbobet and Ibcbet to join forces with their European counterparts to fight fixing.

“I do call on all the European betting operators, in fact all global licensed operators, who are serious about protecting their company to join ESSA,” he said.

Philippine-based Sbobet and Ibcbet declined to comment on the issue when contacted by Reuters.

A German investigator who helped jail 14 people for match-fixing was critical of the systems.

“Coming from our experiences of the last three years we have to say that these systems are not productive for our investigations as evidence in court,” said Friedhelm Althans, investigator in the German city of Bochum.

“They are basically blunt instruments which don’t yield results,” he told Reuters.

‘MADE FOR CORRUPTION’

Soccer has replaced horse racing as the staple of the bookmaking business, helped by technology that allows punters to bet live online while watching matches on television.

Sportradar’s Paterson said the explosion of the online industry led to particular match-fixing trends appearing.

Ninety percent of fixed games will see suspicious patterns in live betting, usually with the Asian bookmakers, rather than any pre-match betting.

The mechanics of Sportradar’s system rest on complex algorithms, a global network of 150 freelance informants and decades of analysts’ experience, but the principle behind it all is relatively simple.

Most football betting happens during the match, when bookmakers increase odds and offer a chance of higher payouts.

As the betting is live, the odds are reactive. If a large amount of money is placed on a particular bet, bookmakers respond by lowering odds. If they lower the odds far enough, Sportradar’s system triggers an alert and analysts get to work.

If a match is deemed suspicious, Paterson’s team will gather round a whiteboard and thrash out the details.

“If we see some suspicious betting, we try to exhaust all avenues of why that betting could be legitimate,” said Paterson. “Most of the time we’re able to find a legitimate reason for these.”

Some, such as a match that ends 0-0 and has no corners, no throw ins and no free kicks, are hard to defend.

“All this does though is raise the flag that this match is fixed,” Patterson said. “It’s the start of an investigation.”

Monitoring in Asia is far weaker and Professor David Forrest, an expert on the economics of sports betting, said the conditions were ripe for match-fixing to flourish in the region.

“Most of the competitions targeted are competitions where there is low pay and yet there is a very, very big unregulated betting market in Asia where criminals can make lots of money,” said Forrest. “It’s made for corruption.”

The special economic zone of Cagayan in the Philippines is home to the top five Asian bookmakers who, due to a lack of stringent regulations, are under no obligation to file accounts, keep memoranda of understanding with sporting bodies or ensure ‘Know Your Customer’ principles like European counterparts.

Ralf Mutschke, FIFA’s head of security, says better coordination with law enforcement agencies would also help. Efforts to tackle match-fixing are hampered by the fact that it is not a criminal offence in every country.

Laila Mintas, head of legal at FIFA’s EWS, told a gaming conference in London this month: “We would appreciate the European Union taking a lead by setting the minimum national regulations on match-fixing.”

For Sportradar’s Paterson, match-fixing has become such an issue that left unchecked it could seriously challenge the game’s integrity.

“Who wants to go to a football match where people know the results already? You might as well go and watch worldwide wrestling.” (Additional reporting by Shadia Nasralla and Pedro Redig; Editing by Peter Rutherford)

“Education then, beyond all other devices of human origin, is a great equalizer of the conditions of men — the balance wheel of the social machinery.”

- Horace Mann, pioneering American educator, 1848

“In America, education is still the great equalizer.”

- Arne Duncan, U.S. Secretary of Education, 2011

When Puritan settlers established America’s first public school here in 1635, they planted the seed of a national ideal: that education should serve as the country’s “great equalizer.”

Americans came to believe over time that education could ensure that all children of any class had a shot at success. And if any state should be able to make that belief a reality, it was Massachusetts.

The Bay State is home to America’s oldest school, Boston Latin, and its oldest college, Harvard. It was the first state to appoint an education secretary, Horace Mann, who penned the “equalizer” motto in 1848. Today, Massachusetts has the country’s greatest concentration of elite private colleges, and its students place first in nationwide Department of Education rankings.

Yet over the past 20 years, America’s best-educated state also has experienced the country’s second-biggest increase in income inequality, according to a Reuters analysis of U.S. Census data. As the gap between rich and poor widens in the world’s richest nation, America’s best-educated state is among those leading the way.

Between 1989 and 2011, the average income of the state’s top fifth of households jumped 17 percent. The middle fifth’s income dropped 2 percent, and the bottom fifth’s fell 9 percent. Massachusetts now has one of the widest chasms between rich and poor in America: It is the seventh-most unequal of the 50 states, according to a Reuters ranking of income inequality. Two decades ago, it placed 23rd.

If the great equalizer’s ability to equalize America is dwindling, it’s not because education is growing less important in the modern economy. Paradoxically, it’s precisely because schooling is now even more important.

One force behind rising inequality, in both America and other advanced economies, is well-known. The decline of manufacturing and the replacement of clerks and secretaries with software mean there are fewer high-paying jobs for low-skilled workers.

The good jobs that do exist increasingly require higher education: Since the recession started in the U.S. in 2007, the number of jobs needing a college degree has risen by 2.2 million, according to a recent Georgetown University study. The number of jobs for mere high-school graduates fell by 5.8 million.

Just to stay even, poorer Americans need to obtain better credentials. But that points to another rich-poor divide in the United States. Educators call it the scholastic “achievement gap.” It has been around forever, but it’s getting wider. Lower-class children are getting better educations than before. But richer kids are outpacing their gains, which in turn is stoking the widening income gap.

Across the country, a Stanford University study found last year, the achievement gap between rich and poor students on standardized tests is 30 to 40 percent wider than it was a quarter-century ago. Because excellent students are more likely to grow rich, the authors argued, income inequality risks becoming more entrenched.

“Now, we’re in a situation where we need to educate everyone at the level of the elite in the past,” said Paul Reville, Massachusetts secretary of education. “We don’t have a system to do that.”

It’s an academic arms race, and it can be seen in the sharply contrasting fortunes of Weston, a booming Boston suburb, and the blue-collar community of Gardner, where a 20-foot-tall chair sits on Elm Street as a monument to the town’s past as a furniture-manufacturing hub.

The percentage of Gardner children bound for four-year colleges has held steady at about half in the past decade, and median incomes have tumbled as furniture makers headed south or overseas. Gardner High School graduate Curtis Dorval dropped out of the University of Massachusetts this year after his father, a Walmart worker, ran short of money. He’s working at a Walmart now, too, and then heading off to the military.

In Weston, hedge-fund managers are tearing down modest homes to build mansions. Per-capita incomes have leaped 161 percent in the past two decades, and the high school is sending 96 percent of its graduates to universities.

Tanner Skenderian, president of the class of 2012, is now at Harvard; in her graduation speech, she told her classmates to “reach for the moon.”

This correlation between educational attainment and financial fortune is clear statewide. In the bottom fifth of Massachusetts households, the average income dropped 9 percent in the past 20 years to $12,000. They fared worse despite a sizable gain in educational attainment: The share of people 25 and older in the group with a bachelor’s degree rose to 18.5 percent from 11 percent.

The same thing happened to the middle fifth. Their average income slipped 2 percent to $63,000. The share of adults with a bachelor’s rose to 43 percent from 29 percent.

But the top fifth saw their average income leap 17 percent, to $217,000, as their education levels soared far higher. Three-quarters had a bachelor’s, up from half. Fully 50 percent had a post-graduate degree, up from a quarter.

Some Massachusetts officials say they fear a vicious cycle is taking hold, in which income inequality and educational inequality feed off each other. Democrats and Republicans agree that the increased disparity is a threat to economic mobility in the state. But as in much of the rest of the United States, they disagree over what to do about it. Democrats argue the solution is more – and earlier – schooling. Republicans believe traditional public schools are part of the problem.

The education gap is just one factor behind growing inequality. The U.S. economy has been so weak that large numbers of graduates are underemployed: In 2010, according to Andy Sum, director of the Center for Labor Market Studies at Northeastern University in Boston, only 59 percent of Massachusetts adults with a bachelor’s degree were in jobs that actually required one.

Long-term changes in marriage patterns matter, too, because they are stoking the educational-attainment gap that in turn feeds the income chasm.

BRAINS AND JOBS

People are increasingly more likely to marry their educational equal, Sum’s research finds, creating well-paid two-income couples at the top. At the bottom fifth, the number of single-parent families has risen 15 percent since 1990. Those parents have lower incomes and less time to devote to their children’s schooling. In a pattern echoed nationwide, 70 percent of Massachusetts families with children in the bottom fifth are headed by a single parent – compared with 7 percent in the top fifth.

“All the evidence shows that children born to two highly educated, high-income people tend to obtain the highest level of academic achievement,” said Sum. “At the bottom, where the mom is not that well-educated and tends to have lower income, children tend to do worse.”

A brainier workforce alone isn’t sufficient to drive growth, though. Even as education levels in the Bay State have risen lately, faster growth hasn’t followed. Between 2000 and 2010, Sum found, Massachusetts ranked just 37th in job creation. In fact, none of the 10 states with the top students placed in the top 10 on payroll growth.

“The best educated states were overwhelmingly mediocre in job creation,” he wrote in a study last year. He urges states to complement education with such steps as tax credits, infrastructure spending and on-the-job training.

Seventy miles northwest of Boston, Gardner once touted itself as the “chair-making capital of the world.” The factories employed thousands of workers who supported large families on single incomes. The first workplace time-recorder was invented here, too; as a result of its adoption, “punching the clock” became part of the vernacular.

Today, the factories have gone south or closed. Gardner still calls itself the furniture capital of New England but because of its outlet stores, not its factories. The biggest employers are a hospital and a community college. Retail jobs at Walmart and other chains have replaced better-paying factory work. Between 1989 and 2009, the town’s per capita income slipped 19 percent to $18,000.

A town of some 20,000 people, Gardner has roughly twice the population of wealthy Weston, but spends just 60 percent as much on education. The town’s high school has had six principals in the past eight years.

Even kids who excel at Gardner High School increasingly face financial hurdles after they graduate, say teachers and students. Mayor Mark Hawke said cost routinely prices high-achieving students out of elite private colleges. “It happens every day,” he said.

David Dorval, 47, was laid off in 2009 after working at an area hospital registering patients for 16 years. Dorval, who has an associate’s degree, struggled to find work, and he and his wife divorced. Today he takes home $1,000 a month at Walmart in Gardner and pays half of his earnings to his ex-wife in child support. He goes to his 79-year-old mother’s house for lunch each day.

“I don’t feel like I am able to do what my parents were able to do,” he said. “My parents were able to support eight kids.”

His son, Curtis Dorval, works at Walmart as well. When he was a senior at Gardner High School, Curtis was class president. He was accepted by Northeastern University, a private school in Boston.

PRICED OUT

But Northeastern cost $50,000 a year, which Curtis, then 17, felt he couldn’t afford. Instead, he enrolled last year at the state-run University of Massachusetts Amherst, studying mechanical engineering. With the help of a scholarship for graduating in the top quarter of his class, Curtis paid $10,200 a year.

He got some help from his father, who had saved up $10,000 in stocks and bonds from his days in the hospital job. This summer, that money ran out and Curtis left UMass to enlist in the Air Force. He will serve as an airman – and hopes to use military benefits to pay for parttime university classes.

“The main reason was I needed a way to pay for college,” he said.

That is the flip side of New England’s excellent universities: They are the most expensive in the country, according to a study by the College Board. A four-year education at a public or private university costs nearly one-fourth more than the national average.

Sticker shock is forcing those who do stay in college to pass up elite private schools for cheaper state ones. That’s also happening in the middle-class town of Leominster, a former plastics-manufacturing center 15 miles east of Gardner.

Among last year’s top students was Eric Marcoux, co-leader of the robotics team and member of the National Honor Society. He was accepted to Worcester Polytechnic Institute, a top private engineering university. WPI offered him a $20,000 annual scholarship – but he and his family still faced taking on roughly $30,000 a year in debt. Marcoux chose the University of Massachusetts Lowell, where he’ll have to borrow only half as much.

“It was a lot of going back and forth,” said Marcoux, whose dream is to work for Google. “It was a hard decision but I think it was the right one.”

Trading down can carry a stiff cost: A Harvard study published this year found that students who go to Massachusetts state colleges are less likely to graduate than those who attend Massachusetts private colleges.

The state has tried to help poorer kids. In the early 1990s, Massachusetts sharply increased state funding of local elementary and secondary schools and mandated comprehensive testing. The overhaul was designed to improve student performance and eradicate the achievement gap.

Twenty years later, Massachusetts spends $4.8 billion a year on its public schools, up 83 percent from 1990. Children from lower income families have improved their scores on tests, but their results still lag, as a look at results from the Scholastic Aptitude Tests makes clear.

ENGINEERING A MIDDLE CLASS

In the state’s five wealthiest school districts, students had average scores ranging from 594 to 621 on the 800-point college-admissions test in 2009-2010. In the five poorest districts for which data are available, the SAT scores averaged from 403 to 469.

Reville, the education secretary, wants a redoubled push on childhood education: The 1990s reforms were good but didn’t go far enough. “There is no way for someone who is poorly educated to be self-sufficient,” he said. “It’s in our national interest to do something that we should have done morally anyway.”

What he proposes is sweeping change.

Income depends on educational achievement, and the single best predictor of a child’s likelihood of academic success remains in turn the socio-economic status of his or her mother, said Reville. The solution to erasing the achievement gap involves, in essence, providing low-income students with the advantages their wealthier peers enjoy: pre-school at the age of three, tutors, summer camps, and after-school activities like sports and music lessons. Schools could contract with outside organizations to provide those activities, or lengthen their school day or school year by one-third.

Asked how much such an initiative might cost, Reville responded, “How much would it cost to give every child an upper-middle-class life?”

Such talk makes Massachusetts Republicans blanch. They say they care about income disparities that harm people’s ability to move up the income ladder. Americans are now less likely to move to a higher economic class in their lifetime than Western Europeans or Canadians, according to a number of recent studies.

Republicans argue that the problem is not resources in the public schools: Massachusetts already ranks No. 8 in the amount of money states spend per student, according to the Census Bureau.

“What Reville is suggesting is wraparound social services,” said Jim Stergios, executive director of the Pioneer Institute, a conservative think tank in Boston. “We think decentralized decision-making in the schools makes more sense.”

Instead of spending more, Stergios said, give parents greater choice over which schools their children attend. Expand the use of charter schools, financed by the public but managed independently. Make cities strictly follow the course of study set out by the state. Increase the accountability of teachers by linking pay to student test scores.

CLASS CLUSTERS

“We haven’t closed the (achievement) gap because the Massachusetts curriculum isn’t being taught rigorously enough in the urban areas, principals don’t have enough power and independence, and there’s a cap on charter schools,” said Stergios. “That’s why we haven’t seen the great equalizer working as it should.”

Adding to the complexity of addressing the income and educational gaps is a widening geographical divide in the state.

In Massachusetts, some 230,000 people were unemployed in October, Conference Board data show, and roughly 140,000 unfilled jobs were advertised online. Skilled professions, including software engineers and web developers, topped the list. Nearly seven out of 10 vacancies were in the Boston area.

Harvard economist Ed Glaeser calls this the new reality of a knowledge-based global economy. More than ever, innovation, growth and opportunity are clustered in large cities such as Boston. Let decaying factory towns become ghost towns. Instead of building better transportation links, Glaeser believes their inhabitants should be encouraged to move to the closest economic hub.

“In 1940, you wanted to be in an area with resources for your mill,” he said. “In 2012, you want to be in a cluster of smart people.”

Weston, where Glaeser himself lives, is such a cluster. But it isn’t for everyone. Its house prices and real estate taxes put it out of reach for most Massachusetts residents, which points up a conundrum.

As those who can afford to do so head for the clusters, inequality grows. Across the state, communities are becoming more homogenous by income group, said Ben Forman, research director at think tank MassInc.

“There are definitely more Westons now than there were a couple of decades ago,” Forman said. “What the research shows is that more economic segregation leads to high-income children performing better and better and lower-income children falling behind.”

The Boston suburbs where Weston is located are home to the most-educated workforce in the nation’s best-educated state, according to the Boston Federal Reserve.

DEGREES OF DIFFERENCE

A Reuters analysis of Census and American Community Survey data found that two-thirds of working-age adults in Weston and surrounding towns had at least a bachelor’s degree in 2010. That’s more than double the national average of 28 percent. Just 23 percent of their peers in Gardner and its neighbors had a bachelor’s or better. As earnings fell in Gardner they soared in Weston. In 1990, Weston residents made 3.5 times more than Gardnerites. By 2009, it was 12 to 1.

On a summer Tuesday afternoon, a man was reading a copy of “Horseback Riding for Dummies” outside Bruegger’s Bagels, the sole fast-food chain that Weston has allowed to open as it tries, with mixed success, to preserve its historic character.

One hedge-fund manager built a 22-room mansion with a basketball court, pool and 10-car garage. Another tore down two homes to build a private equestrian center for his wife and daughter with an indoor riding ring.

Town leaders say they are struggling to keep the town from becoming even wealthier. “We have three selectmen who are trying to find ways to diversify our population with affordable housing,” said Michael Harrity, chairman of the board of selectmen. “It’s difficult when lots are selling for $700,000 for teardowns.”

One area where development is warmly welcome is education. This fall, the town opened a new $13 million science wing for Weston High School that includes nine state-of-the art labs and a multimedia conference center.

Weston High is one of the finest public schools in the country. In 2011, 96 percent of its graduates planned to go on to four-year degree programs. In Gardner, only about half did. Nationally, a 2011 University of Michigan study found that the gap in college-completion rates between rich and poor students has grown by about half since the late 1980s.

Those differentials have a long-term impact. An American with a bachelor’s degree earns on average about $1 million more over a lifetime than one with just some college, according to recent studies.

Another advantage Weston kids have is their involved and demanding parents.

SUPER MOMS, SUPER KIDS

Gardner High has no parent-teacher organization. In Weston, parents raised $300,000 last year for additional after-school activities in the public schools. Top scientists living in Weston help with school science fairs. Parental involvement is so intense that three parents sit on the interview panel for every prospective new teacher. Stay-at-home Weston mothers attend meetings of student-body leaders and help students organize events. They’re known as “Grade Moms.”

Liz Hochberger, a recent president of the Weston Parent-Teacher Organization, said the town’s excellent public schools had become a “self-fulfilling prophecy.” Professors from Harvard and the Massachusetts Institute of Technology, along with the wealthy, move to Weston for its public schools, which further improves test scores and college acceptance rates. “Whenever someone is moving to this area and they research the schools,” Hochberger said, “this is always on the list.”

Tanner Skenderian, president of this year’s Weston High graduating class, joked in a speech about her town’s hyper-competitive students. “Welcome to Weston, where third graders take AP Physics, middle-school students sleep for 42 minutes a night, and the most competitive race run by the 2012 boys state champion track team was the race to get the cookies in the cafeteria,” she said.

Competition in high school was fierce. In one advanced placement physics class, she said, six of the 12 students were the children of professors at MIT, America’s premier science university.

But Tanner thrived there. She also found school to be a source of support after her father died while she was in middle school. This fall, she headed to Harvard, after spending the summer interning at the governor’s office. Given the job market, she said she may apply to business or law school after graduating.

Weston, in short, gave her an education that raises her odds of joining her mother – who owns a marketing and event-planning company – at the top of America’s economic ladder.

“We’re very fortunate that we’re rather affluent,” she said. “We have more opportunities, more technology, more classes and more teachers.”

(Reporting By Kristina Cooke, David Rohde and Himanshu Ojha; Edited by Michael Williams and Janet Roberts)

By Deborah Nelson and Himanshu Ojha

WASHINGTON, D.C. (Reuters) – In the town that launched the War on Poverty 48 years ago, the poor are getting poorer despite the government’s help. And the rich are getting richer because of it.

The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 – a ratio of 54 to 1.

That gap is up from 39 to 1 two decades ago. It’s wider than in any of the 50 states and all but two major cities. This at a time when income inequality in the United States as a whole has risen to levels last seen in the years before the Great Depression.

Americans have just emerged from a close presidential election in which the government’s role as a leveling force was fiercely debated. The right argued the state does too much; the left, too little. The issue is now at the center of tense negotiations over whose taxes to raise and what social programs to cut before a January 1 deadline. And the government’s role will be paramount again next year if Congress takes up tax reform.

The federal government does redistribute wealth down to struggling Americans. But in the years since President Lyndon Johnson took aim at poverty in his first State of the Union address, there has been an increasingly strong crosscurrent: The government is redistributing wealth up, too – especially in the nation’s capital.

The beneficiaries are not the billionaire financiers and celebrities who have come to personify income inequality in the 21st century. Yet the Washington elite are just as much part of the trend, having influenced laws and decisions that alter the entire country’s distribution of income.

Two decades of record federal spending and expanding regulation have fostered a growing upper class of federal contractors, lobbyists and lawyers in the District of Columbia area. The federal government funneled $83.5 billion their way in defense and other work in 2010 – an increase of more than 300 percent since 1989, even after adjusting for inflation. Private industry poured more than $3 billion into lobbying to influence the government, nearly double what it spent a decade ago.

THE FEDERAL FUNNEL

Like spokes on a wheel, the high-rise offices of this elite radiate out from Capitol Hill along major arteries deep into suburban Maryland and Virginia. The latest Census figures placed 10 of the capital’s surrounding counties in the top 20 nationwide for median household income – up from six in 1990.

There probably isn’t much society can do to stop some causes of the spreading class divide, such as technological change. But there’s one factor that is changeable – public policy. This series of articles explores how government is exacerbating or alleviating the causes and consequences of inequality, by examining three places where the rich-poor gap has widened.

Massachusetts boasts the country’s finest public education system, but that has failed to slow a sharp increase in the income divide. Indiana has revamped the state’s welfare system, but the number of people in poverty has soared. And in the District of Columbia, the federal government’s hand in rising inequality is visible locally and nationwide.

A cadre of Washington professionals advanced their careers by pushing through personal income-tax cuts during the administration of President George W. Bush that redistributed nearly 2 trillion dollars nationally over the past decade, mostly to high earners.

The tax cuts are listed as a career highlight in the official biography of Nicholas E. Calio, who championed them while White House liaison to Congress. “A big part of the pitch that we were able to make was that it would be benefiting middle and lower incomes,” he said. Today he is chief executive of the airline-industry trade association and pressing for corporate tax reform.

The government-outsourcing boom created new opportunity for entrepreneurs. It also hollowed out a class of federal jobs that once provided entry to the middle class for people without college degrees in the region.

Michael Ponger got 10 months of temporary clerical work in the House of Representatives and at a court for a federal contractor. He’s been job-hopping since, sometimes tapping family for help supporting his wife and son. “The job market out there is shaky,” he said at a District unemployment office.

These changes to government policy are benefiting the affluent more than other Americans. The tax cuts were a major contributor to an increase in the nation’s inequality in the 2000s, according to studies done by the research and budgeting arms of the U.S. Congress.

The income shifts in Washington are part of a broader evolution in the United States and in much of the developed world. Income inequality has grown in advanced economies around the world. But it is wider in the United States than in all but a handful of Western democracies.

Reuters examined the breadth and depth of this historic redistribution of income through an analysis of decennial Census data, which allowed a detailed look at state-by-state trends.

Reporters assessed each state on three metrics of well-being since 1989: changes in income inequality, median household income and the poverty rate. To trace how these shifts played out among families of different income levels, society was divided into five economic classes, from the 20 percent of households with the lowest incomes to the 20 percent with the highest, plus the top-earning 5 percent.

DATA FINDINGS

The analysis found that inequality has risen not just in plutocratic hubs such as Wall Street and Silicon Valley, but also in virtually every corner of the world’s richest nation:

* Inequality has increased in 49 of 50 states since 1989. (See accompanying box on how inequality was measured.)

* The poverty rate increased in 43 states, most sharply in Nevada, ravaged by the housing bust, and in Indiana, which saw a rise in low-paying jobs.

* Twenty-eight states saw all three metrics of socioeconomic well-being worsen. There, inequality and poverty rose and median income fell.

* In all 50 states, the richest 20 percent of households made far greater income gains than any other quintile – up 12 percent nationally.

* Income for the median household – in the very middle – fell in 28 states, with Michigan and Connecticut leading the way.

* The five largest increases in inequality all were in New England: Connecticut first, followed by Massachusetts, New Hampshire, Rhode Island and Vermont. The decline in manufacturing jobs hit New England’s poor and middle hard, while the highly educated benefited from expansion in the biotech and finance industries.

* The only state that didn’t see a rise in inequality: Mississippi, which had an insignificant dip. The Magnolia State was one of the few to post a drop in poverty and a rise in income, but it still ranks worst in the nation on both counts.

Public policy isn’t the only driver of inequality. Technological change has driven demand for high-skill professionals and eliminated a layer of lower-skill jobs. Weakened unions have lost power to lift wages. Perhaps the biggest factor of all is that the people on the winning side of these tectonic shifts – entrepreneurs, financiers and chief executives – are earning ever-larger fortunes.

But government makes a difference.

Two miles south of the Capitol Building, the confluence of the Potomac and Anacostia rivers marks an economic divide between the region’s rich and the District’s poor. Carved out of their eastern banks is the city’s poorest ward, the 8th. As of late last decade, just over a third of all residents and nearly half of children there lived in poverty.

OUTSOURCING UP

Several miles west, Lani Hay owns a $2 million house with towering windows that overlook the bluffs of the Potomac River in the District’s wealthiest neighborhood. A striking figure with dark hair and a designer wardrobe, she gets mentions in local society columns for hosting charity galas and private parties with celebrity guests.

Hay, who attended the U.S. Naval Academy, said she left the military at age 27 after five years in active duty to try her luck in the defense industry. It was 2002, the year after the terrorist attacks on Washington and New York. The United States was at war in Afghanistan and preparing to invade Iraq.

Hay launched Lanmark Technology Inc., a national-security consulting company, joining hundreds of other federal contractors who opened or expanded businesses in the region after 9/11 – including many run by people fresh out of government.

She received a no-bid federal contract for $99,912 from the Department of Defense in 2003. Since then Lanmark has won more than $120 million in federal contracts, according to government records. Hers is a modest success story by Washington standards. “I have peers that are doing over a hundred million in revenue annually,” she said.

They are the beneficiaries of a shift in U.S. policy over the past 20 years that has directed trillions of tax dollars to private-sector contractors by outsourcing government operations and through record spending on war, national security, science and technology.

President Bill Clinton launched his “reinventing government” initiative in the 1990s. The federal money flowing to business rose 7 percent during his second term and 72 percent under Bush, who outsourced a record amount of national-security and defense work after the 2001 attacks by al Qaeda and through two wars. The upward trend continued under President Barack Obama until leveling off in 2010.

The outsourcing boom has been particularly dramatic in the Washington region. Direct spending by the federal government accounts for 40 percent of the area’s $425 billion-a-year economy. The government spends more on private-sector procurement here than in any other metropolitan area or state – up 300 percent since 1990.

Roughly 15 cents of every dollar from the entire federal procurement budget stays in or around the government’s hometown, said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. Last year, that was about $80 billion out of $536 billion in procurement spending, he said. The 15 percent share is far greater than the region’s 2 percent portion of the U.S. population.

GOLD RUSH

“We’re seeing an enormous transfer of wealth from taxpayers to the Washington economy,” said Fuller.

The federal largess kicked off a gold rush to the capital region.

Since 1990, five of the top 10 major defense contractors have moved their headquarters to the Washington area – joining Lockheed Martin, the No. 1 defense contractor and a longtime resident of suburban Maryland.

The Washington area has produced 385 of the nation’s fastest-growing small- and medium-sized companies since 2000, more than any other metropolitan area, according to a study this year by the Ewing Marion Kauffman Foundation. Nearly half were government-service companies.

“It’s the rich getting richer phenomenon,” said Dane Stangler, Kauffman’s director of research. “Because Washington has a concentration of high-growth companies, that attracts higher-skilled people to work there, which will attract more companies.”

The influx has widened a split in the working population between haves and have-nots.

The ranks of Washington-area workers with incomes above $100,000 rose to 22 percent of the workforce, up from 14 percent in 1990, adjusted for inflation, a Reuters analysis of Census data found. The share making less than $40,000 stayed flat, while the middle hollowed out to 41 percent from 49 percent.

Executives, lawyers and high-tech workers are among the occupations that increased most in both numbers and average income. At the bottom, one of the fastest-growing areas is personal services, such as hairdressers and childcare workers.

“There are federal procurement CEOs making millions, and young professionals who are making in six figures, then there’s a wage gulf,” said economist Fuller.

Northrop Grumman CEO Wesley G. Bush received $18.4 million in direct compensation last year, in line with peers at major defense contractors. He said his company is concerned about income disparity and is funding programs to improve opportunities for students in disadvantaged schools.

Bush declined to discuss the impact of executive pay on the income-distribution equation. “I found out long ago that talking about CEO compensation is not an appropriate thing for CEOs to do,” he said. “I’d say that for CEOs that are performing well, they ought to be compensated well.”

The federal government historically lifted the fortunes of poor Washingtonians, too. It provided one of the sturdiest rungs on the economic ladder for low-income high-school graduates, who had a shot at thousands of entry-level federal jobs.

OPPORTUNITY DROUGHT

Orlando D. Epps, 38, started working at the Census Bureau through a work-study program while a senior in high school. Upon his graduation in 1992, the bureau hired him full-time in an administrative job at the lowest pay grade on the federal scale, GS-1. “I kept time cards, and I typed memos,” he said.

Today, he is at the National Weather Service. He worked his way up to program analyst at the GS-13 level, which pays $89,000 to $115,000. He has three children, ages 16, 11 and 9, and bought a $130,000 townhouse in Waldorf, a suburb in Maryland.

But foot-in-the-door jobs are fast disappearing. Epps left the Census Bureau in 1997 because the agency laid off his entire section. Now he is working toward an associate degree in accounting after hours. “I’m preaching to my kids that they have to get college degrees,” he said.

Indeed, in 1998, one in four federal civilian jobs in the District was a clerical, blue-collar or technical position. Last year: one in eight. (They remain a third of all federal civilian jobs nationwide.)

The fall-off is even greater than those numbers indicate. The federal government began downsizing the workforce in 1991. The cuts fell disproportionately on low-skill positions that could be replaced by technology or outsourced.

Today there are 320,000 federal jobs in the Washington area. Within the District of Columbia, 55 percent pay $100,000 or more. Many of the low-level jobs that remain are outsourced to temp agencies.

Michael Ponger, 30, grew up poor in the District. In 2010, he landed a clerical job in the U.S. House of Representatives. A couple decades ago, the position would have been a prize for someone with only a high-school diploma, securing a place in the middle class.

Times have changed. The government eliminated and outsourced most of its clerical jobs in Washington. Ponger had been hired by the Midtown Group, an employment agency that has won $20 million in federal contracts since 2003. He made $12 an hour taking inventory of equipment and supplies at the offices of lawmakers who lost re-election, and later did inventory for the federal court.

After 10 months, the job ended and Ponger moved on to a $9-an-hour position as a chef’s assistant. The restaurant closed in August. He grabbed a “very part-time” security post; lately he has been getting more hours and hopes the position will become full-time. He’s making $12 an hour.

“I can’t go for no more $9 an hour jobs, because that’s not going to pay the rent. And after you pay taxes, it’s even shorter,” he said.

MOTHER’S FOOTSTEPS

A trim man with a pencil mustache, Ponger lives in a one-bedroom apartment in Washington’s 8th Ward with his wife, Stephanie, 31, and their 5-month-old son, Michael Jr. They pay $750 a month in rent and sometimes need help from family to get by. She is a suite attendant at the Washington Nationals stadium during baseball season, and styles hair for extra cash.

Growing up, she lived in the suburbs. Her mother did data entry at the Federal Aviation Administration, developing skills that opened the door to a lifetime of good jobs.

“I thought I was going to follow in my mother’s footsteps,” she said. “Now it’s harder. I find that disheartening.”

Midtown Group’s president, Helen Stefan Moreau, said lately she has seen a drop in temp assignments from the government for people with only high-school diplomas. Most of the temp orders require college degrees or better, with commensurate pay. She has even hired scientists for temp work on special projects.

Business is good; Moreau, 46, lives in a $1.7 million house in Chevy Chase, an affluent suburb in Maryland. But she said she is concerned about the growing disconnect between the Washington-area job market and its low-income residents.

“We have plenty of people looking for work and there are jobs. They’re just not aligning,” she said. “There is a group, a segment of the population, that has been left behind.”

People in the influence industry are getting ahead.

In a geographic study of inequality, economist James K. Galbraith found that the Washington region led the nation in per-capita income gains during the five years leading up to the latest recession. He attributed this largely to the increase in federal spending on defense and intelligence contractors, but also to “substantial growth in spending by private sector lobbies.”

Nearly 13,000 lobbyists registered with the government last year and reported $3.3 billion in fees, or about $260,000 per lobbyist. That’s 22 percent more lobbyists and 37 percent more inflation-adjusted revenue per lobbyist than in 1998, according to a Reuters analysis of data from the nonpartisan Center for Responsive Politics.

Times are flush for Washington lawyers as well. The number of attorneys in the area has risen 44 percent, twice the national rate, to 41,000 since 1999. Their average income, adjusted for inflation, rose 35 percent to $156,000.

The number of organizations with a political presence in Washington – that maintain an office or are represented by lobbyists or lawyers – more than doubled between 1981 and 2006 to nearly 14,000, according to a study by political scientists Kay L. Schlozman, Sidney Verba and Henry E. Brady.

THE LOBBYING DIVIDE

These professionals work predominantly for groups representing the top of society. Schlozman and her colleagues found that more than half the groups were devoted to furthering the interests of businesses. The next closest were state and local governments, at 12 percent. The rest were fragmented into single-digit shares among divergent interests. Second to last on the list, just above unions, were groups advocating for the poor, at 0.9 percent.

Richelle Friedman works for one of them.

The 66-year-old Catholic nun is policy director for the Coalition on Human Needs, a nonprofit that represents about 100 organizations. She earns $78,000 and shares an apartment in the District with another nun. On a recent day she was at the U.S. Senate’s Hart Office Building, carrying around a letter backed by 1,900 unions, social-service and faith-based organizations. The groups are prodding Congress, in balancing the budget, to raise taxes on the wealthy and reduce defense spending rather than cut low-income assistance programs.

Conservatives, she said, want to “cement tax breaks for the wealthy at the top and do so by cutting services.” Friedman argues that the affluent have an inherent advantage on Capitol Hill. Many federal benefits that flow their way are built into the tax code, such as the low rates on capital gains and dividends. Advocates for the poor, she said, have to make the rounds every year at budget time to argue why things such as housing vouchers for low-income families should not be cut.

Business lobbyists say there’s a good reason why they’ve grown so numerous. The rise of their industry traces the growth of government, said Kirk Blalock, a top Republican lobbyist.

“The size and scope of government is increasing,” said Blalock, a 43-year-old with close-cropped brown hair. “Look at the number of laws, regulations and lawsuits companies have to contend with. It’s no wonder.”

His firm has flourished. Lobbying income at Fierce, Isakowitz & Blalock rose from $3.2 million when he joined in 2002 to $10.8 million last year, according to disclosures filed with Congress. The firm employs eight lobbyists and an office manager. His income exceeded $1 million, he confirmed, placing him among Washington’s elite.

The son of an upper-middle-class family in Atlanta, Blalock was a public-affairs executive at Philip Morris overseeing political donations in 2000 when Bush won election. Bush adviser Karl Rove, a former Philip Morris consultant, hired the young lobbyist as a White House liaison to business.

Delivering on a campaign pledge, Bush proposed a $1.6 trillion cut in personal income taxes. Democrats opposed the proposal as tax cuts for the wealthy. Many in both parties worried about the loss of so much tax revenue.

THE CARROT

Blalock’s assignment was to persuade leading business associations to mobilize behind the cut. Business leaders were ambivalent: The bill contained no relief for taxes on corporate income, capital gains or dividends. The chairman of the powerful Business Roundtable, representing CEOs from about 200 large U.S. corporations, “looked at it and asked, what’s in here for business?” Blalock recalled.

He set to work with trade-association allies to sell the cuts to the wider business community. Their pitch: Repealing estate taxes would be a boon to family-owned firms, and the income-tax cuts would lift small-business owners, whose profits are taxed via their personal returns.

They also dangled a carrot: If business helped get this bill passed, Bush could press for a second directly addressing their desires.

Within months, a thousand business associations joined a new “Tax Relief Coalition.” They inundated Congress with emails and letters. Congress passed the cuts largely intact, slightly reduced to $1.35 trillion.

By 2003 Blalock had a new job: senior vice president for what was then Fierce & Isakowitz. He brought with him an important new client. The Business Roundtable had become a key supporter of the first tax cut. It now wanted Blalock’s help passing a second round proposed by Bush, a cut in taxes on capital gains and dividends. Congress passed a $350 billion bill.

By the end of the year, Blalock made partner and the firm added his name to the door. He moved from a $700,000 small brick Georgian home in a middle-class neighborhood to a $1.7 million house with a pool in one of the nicest sections of Alexandria, Virginia. His rise was no exception: Other aides who worked on the tax cuts went on to similarly successful lobbying careers.

The changes took hold shortly before the United States headed into its worst recession in 70 years. By 2009 the federal deficit surpassed a trillion dollars a year. Republicans and Democrats began fighting over whether to extend the tax cuts when they expire this year – and what role, if any, they played in rising income inequality.

A $371,000 DISCOUNT

Last year, two nonpartisan government bodies, the Congressional Budget Office and the Congressional Research Service, each undertook studies of income inequality for lawmakers. Both concluded that a major driver in the years leading up to the recession was the growth in capital gains among top earners – but that the cuts also reduced the equalizing influence of the income-tax system. The 2011 CRS paper said tax cuts were the second-largest contributor to the rise in inequality in the decade through 2006. (See accompanying article, “The economics paper that rattled Washington.”)

Conservative economists point out that even after the tax cuts, the rich overall wound up paying a larger dollar amount in income taxes. That’s mainly because the incomes of the wealthy kept climbing. The top quintile paid 15 percent more in taxes but made 30 percent more money in 2006 than in 1996, the CRS reported.

There is no serious disagreement that the rich saved far more on taxes than any other group relative to their incomes, however.

The Tax Policy Center, a think tank staffed by a mix of economists from both parties, calculated that two-thirds of the tax savings would go to the top quintile of households and 1 percent to the lowest quintile. In dollar savings, that’s $371,000 for the top 0.1 percent of households in 2012, $958 for the middle and $66 for the poor.

Nicholas Calio, the former Bush aide who heads airline lobby Airlines for America, worked on the 2001 law as White House liaison to Congress and for the 2003 cuts as in-house lobbyist for banking giant Citigroup. Calio, 59, said he won over members of Congress by focusing on the savings for average Americans. “There were concerns that there was too much for the wealthy,” he said.

Calio says he isn’t bothered that the wealthy benefited more. He grew up poor in Cleveland and used education as a springboard. He went to law school, came to Washington, worked hard and now is “making a lot of money.” He declined to say how much, but his predecessor earned $2.6 million a year. Calio owns a $2.9 million house on the edge of a country club in the suburb of Chevy Chase, Maryland.

Income inequality is better addressed through expanding education and opportunity and economic growth, he said, not by taxing the rich.

“You don’t punish people for being successful,” Calio said. “You don’t legislate equality.”

(Reporting By Deborah Nelson and Himanshu Ojha; Edited by Michael Williams and Maurice Tamman)

(Reuters) – During the Cold War, the relative power of the United States and the Soviet Union were regularly measured in gold, silver and bronze. The last couple of Olympic Summer Games have been a race between China and the United States, with America triumphing in Athens in 2004, and China, on home turf, overtaking its rival four years later. Many commentators saw that shift as a symbol of U.S. decline and of China’s growing economic clout.

The 21st century is likely to be a multi-polar world, however. What does the medal tally say about shifting global power today?

One way to measure change is to compare the relative success of the Group of Seven, or G7, which is made up of seven rich, mostly western countries, and the BRICS, five fast-growing developing states.

Over the past four Summer Games, the G7 – Canada, France, Germany, Great Britain, Italy, Japan, and the United States – has kept its lead over the BRICS countries – Brazil, Russia, India, China and South Africa.

But the gap is narrowing. In 1996, the G7 won 38 percent of available gold medals, more than twice the BRICS share of 17 percent. In the 2008 games, the G7 won 32 percent compared to the BRICS’ 26 percent.

There are several ways to measure medal success. As well as comparing gold medal share, we looked at each group’s share of all medals by attributing three points for a gold medal, two for silver and one for bronze.

“A medal score like that is how you get a sense of the totality of achievement,” said Simon Shibli, professor of sports management at Sheffield Hallam University. By looking at what Shibli calls “market share” you also account for the increase in the number of events.

A fair analysis can really only be made since 1996, when Russia started competing independently again. But by using the Soviet Union as a rough proxy for Russia, it is possible to get a comparison over a much longer period.

Reuters looked at the medal data going back to the first modern games in Athens in 1896 and found some interesting trends. Broadly speaking, you can divide the past 116 years into four main periods:

* The first half of the 20th century – in the Olympics, as in the real world – is a story of Western domination. That’s not surprising. From the BRICS – the name wasn’t coined until 2001 – only India and South Africa competed in the Olympics on any sort of regular basis.

* In the three decades after World War Two, the growing sporting power of the Soviet Union helped the BRICS to catch up with the G7. China’s long boycott of the Games meant that, until 1980, the Soviet Union accounted for more than 95 percent of the BRICS’ medal haul.

* Thanks to boycotts by the United States and then the Soviets, the 1980s were characterized by lots of static. Hard to tell too much here, though the top two countries are obvious: the USSR won 39 percent of all gold medals at the 1980 games in Moscow and the United States 37 percent in 1984 in Los Angeles.

* The last two decades are the first in which we see a straight race between the BRICS and the G7. The demise of the Soviet Union means Russia has been Russia again and China, which returned to the games in 1984 after a long absence, has taken the games much more seriously.

CHINA

The driving force behind the recent growth of the BRICS – as in the real world – is China, which overtook a slowly fading Russia in 2008 as the BRICS’ top medal winner. China benefited from being host at the last Games but its growing dominance is also a result of the massive resources devoted to achieving Olympic glory, according to Shibli.

The country’s performance in 1988, when it ranked 11th on the medals table, “was seen as a national humiliation,” he said. “In 2008, China’s one hundred medals represented the accumulated achievement of an estimated $8 billion of investment.”

In pure market share, the BRICS’ sporting prowess still lags behind its economic growth, according to John Hawksworth, chief economist at Price Waterhouse Coopers.

“The rise in BRICS’ economic performance in terms of GDP isn’t really evident in the same way in the Olympics data aside from China, which has risen sharply on both measures,” he said. “Part of the reason is that India just doesn’t feature. In India, they’re cricket mad and hockey is the only Olympic sport where India has had consistent past success.”

The Beijing games were the first in which India won more than one medal since 1952.

South Africa, too, “has a sporting culture but it is focused around sports such as football and cricket which are not in the Olympics,” said Hawksworth. “So their share of medals isn’t that high within the BRICS.”

Brazil has won more medals over the past four Games, but its Olympic record still lags its economic growth. Brazil is now the world’s sixth biggest economy but it has never come that high on the medals table.

The G7′s share has declined slightly in recent decades, Hawksworth notes, but not as dramatically as their share of world GDP. The G7 countries and the United States in particular continue to dominate the Games; corporate sponsorship and the professionalization of sports have kept the standard of their competitors very high.

Olympic performance will never exactly mirror economic standings, of course.

Australia, which came fourth in the gold medal tally in its home summer games in 2000, is rich and sports-mad but is hardly threatening as the next global super power. Kenya and Ethiopia regularly rank high in the medal tables, but that has little to do with their economic station or political heft (poor, and relatively weak) and more to do with their incredible ability to fuse topography and genes into brilliant distance runners. Canada’s economy is booming but it doesn’t win as many medals as it did in the 1980s and ‘90s.

Still, the table does tell us stories. When you sit down to watch your favorite Olympic sport over the next few weeks, enjoy the precision, ball skills and strength of the athletes. But watch out for the geo-political shifts as well.

(Reporting by Himanshu Ojha; Editing by Sonya Hepinstall)

The 21st century is likely to be a multi-polar world,
however. What does the medal tally say about shifting global
power today?

One way to measure change is to compare the relative success
of the Group of Seven, or G7, which is made up of seven rich,
mostly western countries, and the BRICS, five fast-growing
developing states.

Over the past four Summer Games, the G7 – Canada, France,
Germany, Great Britain, Italy, Japan, and the United States -
has kept its lead over the BRICS countries – Brazil, Russia,
India, China and South Africa.

But the gap is narrowing. In 1996, the G7 won 38 percent of
available gold medals, more than twice the BRICS share of 17
percent. In the 2008 games, the G7 won 32 percent compared to
the BRICS’ 26 percent.

There are several ways to measure medal success. As well as
comparing gold medal share, we looked at each group’s share of
all medals by attributing three points for a gold medal, two for
silver and one for bronze.

“A medal score like that is how you get a sense of the
totality of achievement,” said Simon Shibli, professor of sports
management at Sheffield Hallam University. By looking at what
Shibli calls “market share” you also account for the increase in
the number of events.

A fair analysis can really only be made since 1996, when
Russia started competing independently again. But by using the
Soviet Union as a rough proxy for Russia, it is possible to get
a comparison over a much longer period.

Reuters looked at the medal data going back to the first
modern games in Athens in 1896 and found some interesting
trends. Broadly speaking, you can divide the past 116 years into
four main periods:

* The first half of the 20th century – in the Olympics, as
in the real world – is a story of Western domination. That’s not
surprising. From the BRICS – the name wasn’t coined until 2001 -
only India and South Africa competed in the Olympics on any sort
of regular basis.

* In the three decades after World War Two, the growing
sporting power of the Soviet Union helped the BRICS to catch up
with the G7. China’s long boycott of the Games meant that, until
1980, the Soviet Union accounted for more than 95 percent of the
BRICS’ medal haul.

* Thanks to boycotts by the United States and then the
Soviets, the 1980s were characterized by lots of static. Hard to
tell too much here, though the top two countries are obvious:
the USSR won 39 percent of all gold medals at the 1980 games in
Moscow and the United States 37 percent in 1984 in Los Angeles.

* The last two decades are the first in which we see a
straight race between the BRICS and the G7. The demise of the
Soviet Union means Russia has been Russia again and China, which
returned to the games in 1984 after a long absence, has taken
the games much more seriously.

CHINA

The driving force behind the recent growth of the BRICS – as
in the real world – is China, which overtook a slowly fading
Russia in 2008 as the BRICS’ top medal winner. China benefited
from being host at the last Games but its growing dominance is
also a result of the massive resources devoted to achieving
Olympic glory, according to Shibli.

The country’s performance in 1988, when it ranked 11th on
the medals table, “was seen as a national humiliation,” he said.
“In 2008, China’s one hundred medals represented the accumulated
achievement of an estimated $8 billion of investment.”

In pure market share, the BRICS’ sporting prowess still lags
behind its economic growth, according to John Hawksworth, chief
economist at Price Waterhouse Coopers.

“The rise in BRICS’ economic performance in terms of GDP
isn’t really evident in the same way in the Olympics data aside
from China, which has risen sharply on both measures,” he said.
“Part of the reason is that India just doesn’t feature. In
India, they’re cricket mad and hockey is the only Olympic sport
where India has had consistent past success.”

The Beijing games were the first in which India won more
than one medal since 1952.

South Africa, too, “has a sporting culture but it is focused
around sports such as football and cricket which are not in the
Olympics,” said Hawksworth. “So their share of medals isn’t that
high within the BRICS.”

Brazil has won more medals over the past four Games, but its
Olympic record still lags its economic growth. Brazil is now the
world’s sixth biggest economy but it has never come that high on
the medals table.

The G7′s share has declined slightly in recent decades,
Hawksworth notes, but not as dramatically as their share of
world GDP. The G7 countries and the United States in particular
continue to dominate the Games; corporate sponsorship and the
professionalisation of sports have kept the standard of their
competitors very high.

Olympic performance will never exactly mirror economic
standings, of course.

Australia, which came fourth in the gold medal tally in its
home summer games in 2000, is rich and sports-mad but is hardly
threatening as the next global super power. Kenya and Ethiopia
regularly rank high in the medal tables, but that has little to
do with their economic station or political heft (poor, and
relatively weak) and more to do with their incredible ability to
fuse topography and genes into brilliant distance runners.
Canada’s economy is booming but it doesn’t win as many medals as
it did in the 1980s and ’90s.

Still, the table does tell us stories. When you sit down to
watch your favourite Olympic sport over the next few weeks,
enjoy the precision, ball skills and strength of the athletes.
But watch out for the geo-political shifts as well.

(Reporting by Himanshu Ojha; Editing by Sonya Hepinstall)

Britain’s two biggest airports said they had seen no significant increase in the number of passengers flying abroad while Eurotunnel said outward bound bookings on Channel Tunnel trains were slower than usual this week and next.

More than 10 million people braved torrential rain and then scorching summer temperatures to see the Olympic flame on its 8,000 mile journey across the length and breadth of the United Kingdom, according to Games organizer Locog.

Only one in 10 travelers is leaving London to avoid the Games, according to a survey by the Association of British Travel Agents. Seven out of 10 Londoners were even looking forward to the Games, the survey showed.

“Numbers taking holidays at this time are fairly consistent with past years,” said ABTA spokeswoman Victoria Bacon.

“While some have chosen to forgo a summer holiday during the Games, these have been balanced by those wanting to get away,” she said.

That statistical and anecdotal evidence contrasts with the doomsday predictions by some of the British media that Londoners would flock to foreign shores to avoid the security checks, crowds and chaos that the Olympics is likely to bring.

Jessica May, a 21-year old London-based student travelling to Spain from Gatwick, said: “I’m not going away specifically because of the Games though it is a happy coincidence because of transport issues and security threats.”

In a sign of just how strong the perception of an outflow is, British Airways even tried to entice customers to stay at home by offering cash back on holiday bookings after the Games if Team GB heptathlete Jessica Ennis won a medal.

BA is offering to hand over 100 pounds per booking if Ennis wins gold, 75 pounds if she earns silver and 50 pounds if she collects a bronze medal.

BRITS IN THE OLYMPIC MOOD?

The Games have provoked an outpouring of scorn from opponents: everyone from punters who missed out on tickets due to a botched sale to the drivers of the iconic London black taxis who are upset at the traffic disruption.

But Gatwick, London’s second-busiest airport, which mainly serves the package holiday market, expects July departures to come in at 1.9 million, the average departure figure for the past five years.

Ferrovial’s BAA, the operator of London Heathrow, refused to provide a forecast for July 2012 but said Europe’s busiest airport had not seen a significant increase in outbound passenger numbers from London this month.

Heathrow has seen an average of 3.4 million passengers fly out each July since 2007, according to Reuters calculations. Almost 9 million tickets were sold for the Games.

Eurotunnel said bookings to the United Kingdom were up 30 percent from last year and that though they had seen a high number of departures at the beginning of July, bookings for this week and next week were slower compared to previous years.

“There’s an influx of continental Europeans just before the Games, followed by a waiting period while the Games are on. Then there’s an exodus at the end of the Games of people returning to the Continent and those going on holiday,” said John Keefe, spokesman for the Eurotunnel group.

“What that suggests is that they delayed their holiday while the Games were on,” Keefe said.

(Editing by Guy Faulconbridge, Maurice Tamman and Peter Millership)

Britain’s two biggest airports said they had seen no
significant increase in the number of passengers flying abroad
while Eurotunnel said outward bound bookings on
Channel Tunnel trains were slower than usual this week and next.

More than 10 million people braved torrential rain and then
scorching summer temperatures to see the Olympic flame on its
8,000 mile (12,870 km) journey across the length and breadth of
the United Kingdom, according to Games organiser Locog.

Only one in 10 travellers is leaving London to avoid the
Games, according to a survey by the Association of British
Travel Agents. Seven out of 10 Londoners were even looking
forward to the Games, the survey showed.

“Numbers taking holidays at this time are fairly consistent
with past years,” said ABTA spokeswoman Victoria Bacon.

“While some have chosen to forgo a summer holiday during the
Games, these have been balanced by those wanting to get away,”
she said.

That statistical and anecdotal evidence contrasts with the
doomsday predictions by some of the British media that Londoners
would flock to foreign shores to avoid the security checks,
crowds and chaos that the Olympics is likely to bring.

Jessica May, a 21-year old London-based student travelling
to Spain from Gatwick, said: “I’m not going away specifically
because of the Games though it is a happy coincidence because of
transport issues and security threats.”

In a sign of just how strong the perception of an outflow
is, British Airways even tried to entice customers to stay at
home by offering cash back on holiday bookings after the Games
if Team GB heptathlete Jessica Ennis won a medal.

BA is offering to hand over 100 pounds per booking if Ennis
wins gold, 75 pounds if she earns silver and 50 pounds if she
collects a bronze medal.

BRITS IN THE OLYMPIC MOOD?

The Games have provoked an outpouring of scorn from
opponents: everyone from punters who missed out on tickets due
to a botched sale to the drivers of the iconic London black
taxis who are upset at the traffic disruption.

But Gatwick, London’s second-busiest airport, which mainly
serves the package holiday market, expects July departures to
come in at 1.9 million, the average departure figure for the
past five years.

Ferrovial’s BAA, the operator of London Heathrow,
refused to provide a forecast for July 2012 but said Europe’s
busiest airport had not seen a significant increase in outbound
passenger numbers from London this month.

Heathrow has seen an average of 3.4 million passengers fly
out each July since 2007, according to Reuters calculations.
Almost 9 million tickets were sold for the Games.

Eurotunnel said bookings to the United Kingdom were up 30
percent from last year and that though they had seen a high
number of departures at the beginning of July, bookings for this
week and next week were slower compared to previous years.

“There’s an influx of continental Europeans just before the
Games, followed by a waiting period while the Games are on. Then
there’s an exodus at the end of the Games of people returning to
the Continent and those going on holiday,” said John Keefe,
spokesman for the Eurotunnel group.

“What that suggests is that they delayed their holiday while
the Games were on,” Keefe said.