Remarks by Angel Gurría
16 June 2016
Washington, DC, United States
Ladies and gentlemen,
Thank you, Amy Liu. It’s a pleasure to be back at Brookings.
This afternoon, I will launch the 2016 Economic Survey of the United States, so I can start with some good news! Seven years after the depths of the financial crisis, the US is making a comeback, registering one of the strongest economic recoveries in the OECD. Our Survey charts increased output, reduced unemployment, and improved fiscal sustainability. Certain regions and sectors in particular have experienced stronger growth: California, and the Northeast corridor, for example.
However, the revival in economic fortunes has not prevailed evenly across the country, or across different parts of the population. Just over a year ago, when I was here last, I spoke to you about the state of inequalities in the United States and across the OECD. Sadly, despite the US’s steady recovery, trends in income inequality have continued to worsen even after the crisis.
Large segments of the population continue to face significant obstacles in the labour market, and aren’t sharing in the gains of a strengthening US economy:
Clearly, the US can and must do better to ensure the gains from the stronger economy are shared by all. A more inclusive economy and a more inclusive labour market are also key to boosting growth and productivity! We now have mounting evidence that rising inequalities harm growth because the poorest 40% of the population find it too onerous to invest in their skills and education.
Inequality is a Global, National and Local Concern – Particularly in the US
Fighting inequality is not only a global and national concern ─ it is also a very local one. We have been reminded in recent months just how small and connected our troubled world has become: the refugee crisis, climate change, international terrorism, the heavy legacy of the economic crisis on growth and jobs, and rising inequality. But even as the effects of globalisation spread, its impacts are always bound to play out locally.
Our work on inequalities has shown that the gap between the rich and the poor is higher ─ and often rising faster ─ in large cities, including in the wealthiest, primarily due to skills’ distribution and the capturing of top earners. In those cities, rich and poor people often live segregated in different neighbourhoods.
A forthcoming OECD report, Making Inclusive Growth Happen in Cities, suggests that the most income segregated cities in the Netherlands and France are at comparable levels to the least segregated cities in the US.
And inequality is not just about money. It is also felt in labour market exclusion, lower social mobility, and greater polarisation in educational and health outcomes. And here, too, we have reason to be worried about the state of our cities.
Today, in Brussels, we are launching the 2016 edition of our Regions at a Glance publication. The report shows that when income, jobs and health outcomes are considered together, disparities across cities and regions are consistently starker than those in income only.
These inequalities not only take an economic toll, they also come at a great humanitarian cost! These are lives cut short, children stopped in their tracks from fulfilling their potential.
Inclusive Growth in Cities Campaign
The good news is that good policies can make a big difference! And no one knows this better than Mayors. Sub-national governments control many policy levers for promoting prosperity, well-being and inclusive growth, as they carry out around 40% of total public spending in the OECD and 60% of public investment.
This is precisely why ─ just a few months ago in New York with Mayor Bill de Blasio and 20 other mayors from around the world ─ in collaboration with the Ford Foundation, the OECD launched the
Inclusive Growth in Cities Campaign, a global coalition of Champion Mayors for Inclusive Growth
To date, 47 Champion Mayors have answered the call – from New York to Paris, Minneapolis to Medellin, Atlanta to Cape Town, and beyond.
Champion Mayors have signed on to the New York Proposal for Inclusive Growth in Cities, setting out a common commitment to a policy agenda that aims to ensure that cities work for all of us. Concretely, this means:
In the coming months, we will work with our coalition of Champion Mayors to elevate their voices, their visions and their ambitions on the global stage. Their efforts and insights must inform national priorities and advance global agendas.
We will continue to refine measurement tools, identify policies that work, and help governments in the implementation process.
We will also develop a platform to enable cities to exchange best practices in the policy domains that matter for Inclusive Growth.
In just a few months, Mayor Anne Hidalgo will host the second meeting of Champion Mayors in Paris. Building on the New York Proposal, we will deliver the Paris Action Plan, with specific policy proposals to transform our shared ambition for inclusive cities into implementation on the ground.
As we chart the road ahead, we know that we can’t go at it alone. This Campaign aims to bring key stakeholders around the table ─ like our friends from Brookings ─ and serve as a global platform for the debate on inequalities. We are working hand in hand with our Supporting Institutions, like the National League of Cities (NLC), as well as Cities Alliance, the C40, ICLEI, United Cities and Local Governments (UCLG), and United Way Worldwide, to try to make the aspiration of Inclusive Cities worldwide a reality.
We are delighted that the Mayors of Atlanta, Birmingham, Los Angeles, Portland (Oregon), New York, Santa Fe and Santa Monica are among the first US cities to have joined the Campaign, and we hope that many others will follow!
Ladies and Gentlemen:
The OECD’s mission is to promote better policies for better lives. And if we want economies and societies in which everyone has a shot at success, we must ensure that cities are at the heart of that fight.