Share

OECD Secretary-General

G7 Leaders’ Summit: Fighting inequalities

 

Remarks by Angel Gurría,
OECD Secretary-General,
25 August 2019 - Biarritz, France
(As prepared for delivery)


Dear Leaders,


Inequalities have widened to reach record levels. Even in OECD countries,

  • The income of the richest 10% is 10 times that of the poorest 10%. Problem: it was only 7 times a generation ago. It’s moving fast, in the wrong direction.
  • The richest 10% own 85% of global wealth and the bottom half less than 1%.
  • Social mobility has stagnated. Currently, it would take a child born into a low-income family several generations to reach the average income of OECD countries. A broken social elevator.
  • The squeezed middle class has shrunk and its economic influence has weakened generation after generation ever since the baby boom of the 1940s.

The problem of inequalities extends to health, education, skills and opportunities. A youth that is better off will be better educated, healthier, live longer and get better jobs. Thus, inequalities perpetuate themselves, in the absence of targeted public policies.

These inequalities are fracturing societies, hurting economies, and undermining democracies. They also undermine growth. At the OECD, we believe the answer to inequalities has to be inclusive growth, with both concepts having equal weight.

At the national level, your governments are already taking policy actions to fight against inequalities:

  • by improving childcare provision (which also helps mothers join the labour market), parental leave for both parents and by tackling child poverty;
  • by ensuring equal access to quality education and health for all;
  • by building tax and transfer systems that make work pay, especially for low wage earners and couples;
  • by improving access to training and skills development.

However, our analysis shows that we need to significantly scale-up investment in people and places left behind.

National governments were the first to respond to the evidence; they are on board; cities are where most people live, so, we launched the Champion Mayors for inclusive growth initiative (NYC, Paris, Seoul, Athens).

But the evidence shows that highly unequal societies are bad also for business.

So, the OECD created the Business for Inclusive Growth (B4IG) Platform, to unite business behind a growth agenda that places social and environmental returns at the same level as financial returns.

Only two days ago, at the Elysée, President Macron hosted 34 CEOs, led by Emanuel Faber of Danone, and companies such as MARS, JP Morgan, Goldman Sachs, BASF, RICOH, among others, employing over 3 million people and with sales of over one trillion US dollars, from all G7 countries, who pledged to fight inequalities by:

  1. Investing in people and communities at risk;
  2. Promoting diversity and inclusion in the workplace;
  3. Advancing human rights both in their own operations and throughout their supply chains.

We expect many more firms to join this effort.

Finally, the OECD and other International Organisations, in a joint declaration, have committed to support the battle against inequalities through closer cooperation, coordination and coherence of our respective analysis, advice and standards.

So: we now have a coalition of national governments, mayors, business and multilateral organisations, aligned to reduce inequalities and promote inclusive growth.

Dear Leaders, fighting inequality requires both bold action today, as well as multi-year endurance. Count on the OECD, to continue supporting you in addressing this explosive ethical, political and economic challenge.

Thank you.

 

 

 

See also:

OECD work with Inclusive Growth

OECD work on Social and Welfare issues

 

Related Documents