The economic dangers of widening inequality are highlighted in a new report presented at the OECD Forum in Paris.
It said the gap between rich and poor is at its highest in decades in many countries, and efforts to tackle that will only succeed if they look beyond income and focus on better access to high-quality education, healthcare and public services.
Our correspondent Giovanni Magi, who covered the Forum, said: “Even in countries experiencing a return to growth, that’s not being seen in improved household income, but mostly in a rise of productivity.”
One Forum participant – Mariana Mazzucato, Professor of Economics of Innovation, University of Sussex – said inequality needs to be adddressed in areas like innovation, which is vital to economic growth, but where companies are not playing the role they should be because of a flawed tax system.
Professor Mazzucato told euronews: “That kind of innovation-led growth has often been financed by the tax-payers themselves, but the rewards are not coming back, we’re only socialising risks, not rewards; and that requires rethinking the tax system which has basically, since the Eighties, became increasingly regressive.”
The OECD wants to see the benefits of growth shared, including a complete overhaul of the tax system in developed economies.
It warned if that does not happen, “the gap between the rich and poor is likely to grow even wider in the years ahead”.