The OECD’s report ‘Divided we Stand: why Inequality keeps rising” argues that skills training and education is crucial to addressing inequality.
The report received significant media attention this week when it showed New Zealand had one of the largest increases in inequality over the last 25 years.
It noted that a rise in the supply of skilled workers in many countries helped offset the increase in wage inequality. Raising the skills level of the labour force also had a significant positive impact on employment growth.
It calls for “three pillars” of actions to close the gap – investing more in education and training, helping all groups into jobs, and closing tax loopholes to make the rich pay a fairer share of taxes.
“There is nothing inevitable about high and growing inequalities,” said OECD secretary-general Angel Gurria.
The OECD also noted that a decline in collective bargaining and workers’ rights contributed to inequality.
“Part-time work increased, atypical labour contracts became more common and the coverage of collective-bargaining arrangements declined in many countries. These changes in working conditions also contributed to rising earnings inequality.”