Last year the OECD Forum focused on equality, jobs and trust. This year they swapped equality for inclusive growth and maintained a focus on jobs and trust. The change is subtle but rather significant; the focus on equality is not working.
Beyond the moral argument for equality, an increasing number of studies show the benefits for whole societies. One such work was carried out by Richard Wilkinson and Kate Pickett, resumed in the book ‘The Spirit Level’. Using data from the United Nations Development Programme for 23 countries and the US Census Bureau for 50 American states they examined the effect of inequality on areas such as health, trust and crime etc. The data overwhelmingly showed that inequality had a negative effect on these areas. Turns out equality should be win-win for everyone.
The message has not got round. The gap between rich and poor is at its highest in 30 years; average income for the richest 10% of the population is now around 9 times that of the poorest 10%.[1] On top of that unemployment persists and there are still more than 200 million worldwide who are currently unemployed with weak prospects for growth setting to exacerbate the problem.[2] Something isn’t working.
A focus on inclusive growth is therefore commendable. It’s a goal that includes offering equal opportunities and ensuring benefits for all. As the OECD also outlines, this specifically means looking at improving living standards and outcomes that matter for people’s quality of life such as good health, available jobs, the right skills and a clean environment, to list just a few.
Key policy areas remain the base tools for reaching this goal (tax, labour market policies, innovation & entrepreneurship…) but trade-offs will have to be analysed and decisions will not be easy. All we know for certain is that we have to make it work…
[1] OECD Workshop on inclusive growth, 3 April 2014, p. 6
[2] Ibid. p. 6
