More OECD: Income Inequality Is a Big Problem in the U.S.
In addition to tackling innovation in the United States, the most recent biannual survey of the U.S. economy, released on Tuesday by the Organization for Economic Cooperation and Development, also highlighted the country's growing income inequality.
The U.S. has some of the highest relative poverty and income inequality in the group of 34 OECD member countries, surpassed by only Chile, Mexico, and Turkey. The country's climbing inequality is largely the result of rising skill premiums and disproportionate income growth for top earners in the last 20 years in the United States, according to the report, which also outlined the outcomes associated with growing inequality (none of them good): lower social mobility among generations, bad health, and less innovation.
The international group's recommendations for reducing income inequality align with arguments made by Democrats, including the Obama administration, in the U.S., most notably limiting tax expenditures that disproportionately benefit high earners. The OECD also called for broadening the tax base by closing loopholes, a move it said could raise both efficiency and equity. Comprehensive education reform, too, could provide more disadvantaged students with skills to increase income mobility.
See the full OECD report and read more about the group's recommendations for reducing income inequality here.