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OECD inequality findings welcome but causes need to be investigated
In response to the Organization for Economic Co-operation and Development's (OECD) latest report on inequality, In It Together: Why Less Inequality Benefits All, Oxfam’s Senior Policy Advisor Claire Godfrey said:
“There is nothing surprising in the OECD’s latest report on inequality, with the key findings showing that higher economic inequality drags down economic growth, wealth is more concentrated than income and that empowering women will reduce inequality and boost growth. While Oxfam welcomes the paper and marks the work the OECD does, it’s another reminder that the poor are still getting poorer as the rich are getting richer and robust policies to reverse this trend are needed now.
“Based on their findings, the OECD must take the next step to find out why inequality is rising. While redistribution is fundamental to stifling inequality, it is imperative that the OECD investigates the reasons for rising inequality by looking into our current tax structures, work and wages systems, and education, as well as gender inequality.”
The OECD released In It Together: Why Less Inequality Benefits All on 21 May 2015.
Key findings, according to Oxfam analysis, are:
- Today, in OECD countries, the richest 10% of the population earn 9.6 times the income of the poorest 10%. In the 1980s, this ratio stood at 7:1 rising to 8:1 in the 1990s and 9:1 in the 2000s.
- Higher economic inequality drags down economic growth. Between 1990 and 2010, OECD economies lost 4.7% off cumulative growth.
- Higher economic inequality limits opportunities.
- Rising non-standard work contributes to growing inequality. About 1/3 of all employment in OECD now is non-standard employment. More than half of jobs created in OECD since mid-1990s have been non-standard jobs (part-time jobs; fixed-term contracts; self-employment).
- Bringing more women into the workforce lowers inequality. If the proportion of households with working women would remain at the level of 20-25 years ago, the gini coefficient would be on average 1 per cent point higher.
- Wealth is much more concentrated than income. On average, the 10% of wealthiest households hold half of total wealth, the next 50% hold almost the other half, while the 40% least wealthy own little over 3%. At the same time, high levels of indebtedness and/or low asset holdings affect the ability of the lower middle class to undertake investments in human capital or others. High wealth concentration can weaken potential growth.
Dannielle Taaffe, on +44-7917-110-066, email@example.com
For updates, please follow @Oxfam.