18/03/2014 - Income inequality and social divisions could worsen and become entrenched unless governments act quickly to boost support for the most vulnerable in society, according to a new OECD report.
Society at a Glance 2014 says that despite a gradually improving global economy, medium-term fiscal consolidation in many countries will pose challenges for tackling the social fallout 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 a challenge: while 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, says the OECD. These may add to the hardship of the most vulnerable and could create problems for future social cohesion. While the long-term commitment to restore public finances should be maintained in order to create confidence, it cannot happen at the cost of raising inequalities and social gaps.
“The economic recovery alone will not be enough to heal the social divisions and help the hardest hit bounce back,” said OECD Secretary-General Angel Gurría. “Governments need to put in place more effective social policies to help their citizens deal with future crises. They also need to avoid complacency and persevere in their reform efforts as the recovery takes hold.”
Governments should target social spending and investment on the most needy, says the OECD. Across-the-board cuts in social transfers should be avoided. This is particularly true for housing and child or family benefits as these often provide vital support to poor working families and lone parents. Cutting such social investment expenditure today might cause long-term harm to children’s development and people’s employment chances and well-being in the future.
Society at a Glance 2014 highlights the impact of the crisis across a range of indicators:
By contrast, the large emerging-market economies have aimed to bolster redistribution measures as part of their strategies to reduce poverty and inequality and can learn from the recent experiences of OECD countries.
Society at a Glance gives an overview of social trends and policy developments in OECD countries and selected non-member countries using indicators taken from the OECD and other sources.
Read and browse the book online.
Journalists can obtain a copy of the report via the Password-protected site or from the OECD’s Media Division (tel. + 33 1 45 24 97 00).