OECD: Higher Inequalities drags down economic growth

Much of recent debate surrounding inequality has focused on top earners, especially the top 1%. Less well understood is the relative decline of low earners and low-income households – not just the bottom 10% but the lowest 40%. This report places a special focus on these households, investigating some of the factors that have weakened their economic position, and the range of policy options that can help address increasing inequality. Beyond its impact on social cohesion, growing inequality is harmful for long-term growth. The rise of income inequality between 1985 and 2005, for example, on average across OECD countries for which long time series are available. The key driver is the growing gap between lower-income households – the bottom 40% of the distribution – and the rest of the population.

http://www.oecd.org/social/in-it-together-why-less-inequality-benefits-all-9789264235120-en.htm