Sunday, 1 January 2017

Redistribute wealth for stability?

In It's time to focus on the redistribution of wealth to poorer workers Greg Jericho writes that "The former World Bank chief economist says that protectionism against globalisation is not the answer to the labour crisis – inclusive growth is".
Globalisation is not about to stop, and neither are the concerns of workers – especially as we are seeing in Australia a time of flat real wage growth and declining share of income going to workers.

This does not mean we need to cower and put up trade barriers which will only exacerbate the problems. But neither does this mean we can carry on still thinking only of GDP growth. To both improve our economy and also dampen the nationalistic xenophobia that quickly turns to racism, governments must adopt policy more targeted to inclusive growth. They must realise that with the greater flexibility of labour comes the need for greater emphasis on redistribution of income.

Failure to do so will only see inequality increase and the fires of nationalism – and all the dangerous sparks associated with it – burn hotter.

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