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The OECD has found a link between a country's inequality and the decrease in percentage points of GDP Growth. This decline has been seen in countries including the US, who has lost almost seven points, and the UK, who has lost around 9 points of GDP Growth percentage. This is a shocking point which shows countries that if they want to promote strong and sustained growth, addressing inequality needs to be a central focus.
In most developed countries, specifically 30 of the 34 OECD member countries, the gap between the rich and poor is constantly increasing. What was once a gap of the richest 10% earning 7 times more than the poorest has increased to 9.5 times as much. This is the highest level that income inequality has been at in over 30 years. The OECD found that the only countries in which inequality had fallen are Greece and Turkey.
One of the biggest reasons inequality is rising is due to a lack of available education for deprived citizens. Countries need to foster educational opportunities for underprivileged individuals or it will continue hurting overall skill level, thus hindering a country's economic growth. Countries should look deeper past implementing anti-poverty programs, and explore training and educational programs for the lower-skilled, as well as invest in formal education for lower income groups.
Developed countries need to harness the widespread inequality that is currently growing. If a country wants to realize strong economic growth, it needs to provide equal opportunity for all citizens at all ages. If a cap can be put on the increasing inequality and countries put in the effort to lower the gap between the rich and poor, economic growth could be spurred once again.
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