Urgent action needed on rising inequality – OECD

Income inequality and social divisions could worsen and become entrenched unless governments in developed countries act quickly to boost support for the most vulnerable people in society, according to a new report from the Organisation of Economic and Social Development (OECD).

The report also warns that poverty will become ever more entrenched in the UK if the government does not maintain social spending.

Key points

  • Despite a gradually improving global economy, continuing austerity measures in many countries will pose challenges for tackling the social fall-out from the crisis.
  • Public spending on disability, family and unemployment benefits rose during the early phases of the crisis, but these areas are now under pressure. Coverage has also been an issue: although social protection programmes helped soften the blow for many people, others were left with little or no support, notably in southern Europe.
  • Governments need to consider any further expenditure cuts 'very carefully'. These may add to the hardship of the most vulnerable people, and could create problems for future social cohesion. A long-term commitment to restore public finances should not be allowed to happen at the cost of raising inequalities and social gaps.
  • On the UK, the report says the targeted nature of cash benefits means that cuts are more likely to hurt people in poverty than they are in other countries. It warns that cuts in programmes such as Sure Start 'should be based on a careful review of their distributional implications'.

SourceSociety at a Glance 2014: OECD Social Indicators – The Crisis and its Aftermath, Organisation for Economic Co-operation and Development
Links: Report | UK report | OECD press release | Guardian report
 

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Publication date: 
Mar 18 2014