Inclusive Growth: Making It Happen

Exploring inequality, gender, and the North-South divide.

From the collection: Gender Economics


From the collection Gender Economics

Gabriela Ramos is the OECD Chief of Staff and Sherpa to the G20. Since 2006, she has been advising and supporting the Secretary-General’s strategic agenda. As a Mexican woman working in at the OECD headquarters in Paris, she is uniquely qualified to speak on the subject of inequality in all of its major manifestations: intra-national inequality, international inequality (the growing divide between North and South), and, perhaps the oldest form of inequality, gender inequality.

As Ramos notes in the interview below, for decades, it has been manifestly clear that the benefits of economic growth do not trickle down automatically. This notion may run counter to orthodox economic theory (certainly contrary to the dominant “trickle down” paradigm), but it was confirmed by the 2008 crisis and its aftermath. In 2010, notes Ramos, the average income of the richest 10% in OECD countries was 9.5 times higher than that of the poorest 10%, greater than at any moment in the previous 30 years. In other parts of the world, including in India, Indonesia and South Africa, inequality has soared. Only in very few countries, notably in Latin America, did inequality decrease, albeit generally from an extremely high level. In Brazil, for instance, the gap between the richest and the poorest 10% has narrowed, but nevertheless stands at 50:1. In many countries, lower-wage workers have been working harder and harder, but have not moved up the social ladder. Take the case of the United States: while average working hours among lower-wage workers increased by more than in other OECD countries before the crisis, household incomes of those at the bottom actually fell. The pernicious consequences of increased inequality, however, extend far beyond income. Access to employment, good health and educational opportunities are all disproportionately determined by socio-economic status.

And women were probably the biggest casualties of this trend.

Our economic systems, with all their strengths and advantages, have been producing and perpetuating social disparity for decades, and this has worsened since 2008. We need to reverse this trend and ensure that the next phase of economic expansion benefits more than the lucky few, argues Ramos. We have to ensure that we have learned from the crisis, and now, as the recovery takes hold, to create more inclusive growth. This can be done through more inclusive social policies and certainly a more progressive tax system that takes more from the biggest beneficiaries of these adverse trends over the past several years. Ramos discusses all of the foregoing in the interview below and the role that the OECD is playing to ensure that policy makers make the right policy choices.

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