ILO says addressing inequality can boost economic growth

ANTALYA: ILO Director-General Guy Ryder said the G20 made an important breakthrough under this year’s Turkish presidency by starting to tackle inequality. The ILO head was addressing the working session on inclusive growth of the Leaders’ summit that opened on Sunday in the Turkish resort town of Antalya.

Ryder said that much of the increase in inequality has happened in the labour market itself through flat wages, rising job insecurity and increases in involuntary temporary and part-time work. Tackling these issues, along with more progressive tax policies and strengthened social protection systems, can make an important contribution to increasing economic growth and reducing inequality.

The ILO head said that G20 Labour and Employment Ministers adopted a set of policy priorities to begin addressing these issues when they met back in September. The measures include strengthening wage- setting mechanisms like minimum wages and collective bargaining that help put money into the households most likely to spend it, and to increase demand as a result. Promoting better job quality, reducing labour market insecurity and achieving good working conditions and healthy workplaces are also an important part of the mix. Lastly, policies should promote better employment opportunities for vulnerable groups, particularly for youth, who are at risk of being permanently left behind due to their low skills.

These labour market policies need to be combined with appropriate monetary and fiscal measures to lift the incomes of lower and middle-income households. Ryder added that investment in infrastructure is equally a proven method of creating jobs in the short term and increasing productivity in the medium term.