Jobs, Equality and Trust

“It’s all about people”— this message is at the heart of the debate for the discussions at the 2013 annual OECD Week bringing together the annual OECD ministerial meeting and the OECD Forum where the key issues on the global agenda are debated between all stakeholders – not just ministers, but business, labour, civil society and academia.

“We are all stakeholders in the crisis and many problems have to be solved on an international level. Developing effective strategies which convert skills into jobs, growth and better social outcomes will depend on a right mix of many national and international measures,” in the words of Norwegian Finance Minister, Sigbjørn Johnsen, chair of the 2013 OECD ministerial meeting.

Debate at the Forum on May 28-29, and the ministerial meeting from May 29-30 will focus around three key themes – promoting inclusive growth, rebuilding trust and fostering sustainability.

Read the full message from Sigbjørn Johnsen

OECD Forum

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With 200 million people unemployed and public debt at historic highs in many countries after five years of crisis, creating jobs, particularly for the millions of young people who are struggling to find a first foothold on the employment ladder, employment is a key element of the debate. But jobs are only part of the equation. We need to rethink the kind of economic growth that we want in future, that will be sustainable not just economically but socially and environmentally, and whose benefits are available to everyone.

This means ensuring that education systems equip young people with the skills needed for the 21^st century workplace, and that there are jobs available. But we also need to ensure that older workers are not excluded, and that they can build retirement savings so they do not end their lives in poverty. And we need to ensure that developing countries play a full role in the changing global society and economy. We need to make full use of all the available talents in our societies, old and young, men and women, if we are to achieve sustainable inclusive growth.

When our economies and societies change, we need to make sure our ways of measuring and understanding what is happening are keeping pace. Take how we measure trade – our current system was essentially set up when raw materials or finished goods were exported from country A to country B, and capital consisted of your products, factories and offices, and patents on your unique inventions. Today, a car, plane or mobile phone consists of raw materials, parts and processes from dozens if not hundreds of sources, and much of the capital needed to keep business moving is the knowledge held inside people’s heads. So we need a new way to measure trade, and capital ---- something the OECD has been doing and developing for half a century.

Forum issue: Promoting inclusive growth

 The OECD Forum will be looking at these issues with sessions ranging from jobs and youth to the importance of small business in creating growth and jobs. The launch of the regular OECD Economic Outlook on May 29 will mark the transition to the OECD ministerial meeting, when informed by the Forum discussions, ministers will look at how to craft new approaches to economic challenges – examining the lessons learned from the crisis, and revisiting our fundamental assumptions about the functioning of the global economy for better policymaking in the future.

Trust between people and government is a cornerstone of our societies. But that trust has been undermined by the crisis, and today many people do not trust government, business or the media. This can make it difficult for governments to win support for their efforts to get their economies onto a sound, sustainable footing while protecting the most vulnerable people. From taxation to education or health care, people want to know that they will be treated on an equal footing, and that the rules apply to everyone.

How taxes work in a global context, how to reduce inequality and what a new “social contract” of trust between citizens and government might look like will all be up for debate at the OECD Forum – and will inform the ministerial debates.

Despite crises and recessions, living standards worldwide have been rising on average over the past 50 years or more and we have grown used to the idea that the communities we live in will become wealthier, better educated, more enlightened, healthier, and so on. Until recently, just about everybody assumed that children would have a better life than their parents.

One of the most lasting legacies of the recession that followed the 2007 financial crisis may be the end of that assumption. In presenting its Green Growth Strategy in 2011, the OECD warned that if we want to make sure that the progress in living standards we have seen these past fifty years does not grind to a halt, we have to find new ways of producing and consuming things. And even redefine what we mean by progress and how we measure it.

Growth as such will not solve the problems unless it is inclusive, equitable and sustainable. And not just in OECD countries. Natural capital accounts for an estimated 26% of total wealth in low-income countries, compared with 2% of wealth in advanced economies.                

The OECD Forum and the OECD ministerial meeting will look at how economic, environmental and social sustainability can be fostered nationally and internationally. They will provide an opportunity to debate many of the issues surrounding sustainability, such as energy, the relative responsibility of the developed and developing economies and who should pay the costs of moving to a more sustainable approach.

Economic growth does not exist in a vacuum; its purpose is to improve people’s wellbeing. While economic measures such as gross domestic product (GDP) remain a valuable measure of economic activity, it was becoming clear even before the crisis that we needed better ways to capture how the growth was being shared, and what actually contributes to people’s wellbeing.

Instruments such as the OECD Better Life Index, part of the OECD Better Life Initiative, and similar projects in many countries around the world reflect the need for a better way to capture what matters to people – from education and health to a nice home and a good job. The annual update of the Better Life Index will offer an opportunity to discuss what wellbeing means, and how such measures can be used to inform policymaking.

In the words of OECD Secretary General Angel Gurrïa: "Better policies for better lives is a journey, not a destination, and all these issues will be at the centre of the 2013 OECD Forum and Ministerial Council meeting discussions. I look forward to your participation in a lively and productive debate."