At a recent G20 finance ministers’ meeting, the main topic of conversation was economic growth and policies to implement. The OECD was in attendance, and expressed the need for countries to focus on policies that won’t just establish economic growth, but that will foster global recovery. The desire for economic growth needs to be coupled with a focus on combating growing inequality around the world.
Currently, the wealth distribution gap is widening in developed nations, with low-income individuals being hit the hardest. This inequality has increased lately due to factors including high unemployment, slowing productivity, public-sector debt, and instabilities in the financial sector. The OECD is advising governments to highlight policies that will help reduce inequality within G20 nations, while simultaneously enhancing economic growth.
Policies that should be given the main stage are ones that focus on raising earnings potential of low-skilled workers and those promoting women’s participation in the labor force. Also governments were advised to cut barriers to entrepreneurship and research development, promote cross-border trade and investment, and invest in infrastructure. Reforms and advancing efforts in these areas will unlock growth potential in all economies.
One reason inequality is presently such a large issue is that in developed nations and global economies, future trends in labor industries threaten to expand the gap between rich and poor even more drastically. This comes as labor markets diverge into high-skilled and low-skilled jobs, with laborers in the middle being replaced by machines.
The OECD puts great emphasis on the matter that G20 governments need to think about decreasing inequality while pursuing economic growth. The hope is that matters such as this will have a positive impact on global business and bring equality to nations.