OECD champions policies to tackle income inequality
The OECD is calling on governments worldwide to take urgent action against rising inequality as it launches a new policy framework for inclusive growth.
The group of 35 leading industrialised nations says in a new report that opportunities for low-income groups are worsening in many countries as “globalisation, digitalisation, demographics and climate change are transforming our economies and our societies”.
Launching the report at the OECD Forum in Paris last week, Gabriela Ramos, the OECD’s chief of staff and G20 Sherpa, said: “It’s vital that countries progress in their efforts to transform economic growth into improved living standards for all.
“We need to help the poorest in society achieve their full potential, and ensure that governments have the tools to deliver. OECD analysis shows that when policies targeting the most disadvantaged deliver, everyone in society sees gains in prosperity and well-being.”
Seize the moment
Opportunities for All: A Framework for Policy Action on Inclusive Growth says the current global trends provide new opportunities for economic growth but also threaten to increase the already high rates of income inequality in many countries.
To address these challenges, the OECD recommends that countries take advantage of returning growth in the global economy to carry out more ambitious structural reforms that put equity considerations first. “Any short-term costs from reforms may be lower and shorter-lived when demand and job creation are stronger,” it says.
The new policy framework, which was developed by the OECD, provides approaches and solutions for increasing low-income groups’ access to quality services so that they can contribute to increases in productivity, growth and well-being.
We have the tools
The framework highlights three key policy areas, which countries are urged to focus on. The first is investing in people and places that have been left behind, with a special focus on children in precarious conditions, through policies such as: targeted quality childcare, early education and lifelong learning; effective access to quality healthcare, education, justice, housing and infrastructure; and optimal natural resource management for sustainable growth.
The second is supporting business dynamism and inclusive labour markets, through approaches referred to as broad-based innovation; fast and deep technological diffusion; strong competition and vibrant entrepreneurship; access to good quality jobs – especially for women and under-represented groups; and more help for people to adapt to the future of work.
Third comes building efficient and responsive government, through a “whole of government” approach to aligning policy packages; putting equity at the centre of policy design; involving citizens in policy-making; and strengthening integrity, accountability and international coordination.
The group has also created a new dashboard of indicators on issues ranging from income, growth and unemployment to education, environment and governance that can be used to monitor countries’ progress towards goals for inclusive growth.
About Liz Heron
Liz Heron is a journalist based in London. She worked on daily newspapers for more than 16 years as an education correspondent, section editor and general news reporter. She was Education Editor of the South China Morning Post in Hong Kong and has contributed to a wide range of British media including The Independent, The Guardian and the BBC.
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