“Have nots” have stage in Davos

Begging for attention Keystone

The WEF Global Risks report has highlighted social inequality as the biggest threat to stability in the world.

No suprises then that the subject has been receiving a lot of air time in Davos. Inequality has been boiled down to two broad strands: unemployment and the distribution of wealth.

“We have not paid enough attention to inequality,” International Monetary Fund Managing Director Christine Lagarde told delegates, adding that it was corrosive to economic growth and healthy societies.

Nobel Prize winning economist Joseph Stiglitz deplored the fact that the share of national wealth in the US had doubled for the top one per cent since 1980. Greater social equality does not come at the expense of economic growth, he argued.

“Periods of shared economic growth have also been periods of more rapid economic growth,” he said during an address.

Some 200 million people are now unemployed, according to the International Labour Organization. That’s 4.2 million more jobless in 12 months and the situation is set to worsen in the next two years.

Improved social safety nets, better educational standards and greater investment from companies have been highlighted as key answers. Trade unions also want an end to the EU’s austerity drive.

It’s a chicken and egg situation: does rising employment and income equality drive economic growth or will these factors only improve when economies get back on track?