The OECD wants action now: Opportunities for all is the new measure of success

In the report ‘Opportunities for all’, the OECD challenges member countries to fight inequality. “Growth is good, but welfare for all is the true measure of success.” The ETUC’s Luca Visentini will not be happy until he sees a better distribution of wealth being created through collective agreements.

The global economy has bounced back to approximately where it was at before the 2007-2008 crisis. But even though growth is back at the same level as ten years ago, inequality is higher in many countries than they have been for 30 years, according to the OECD. And although unemployment levels match those before the crisis, the increase in productivity has not necessarily led to higher incomes for the middle classes. Trickle-down economics have turned out not to deliver.

This trend towards increased inequality forms the backdrop when the OECD and Chief of Staff Gabriela Ramos launches a new framework for inclusive growth. A framework with a toolbox of measures aimed at achieving a fairer distribution of wealth in the member countries.   

“It is time to move away from the narrative of growth first, then distribution. Equity must be incorporated into policymaking as a driver of growth and productivity. There is an urgent need for joint efforts from governments in order to push towards a more inclusive, sustainable economic growth which can benefit society as a whole.”

The report ‘Opportunities for All; A Framework for Policy Action on Inclusive Growth’ launches a dashboard of indicators to help member countries develop different national strategies for inclusive growth.

“With the new framework we expand the term growth beyond simply talking about GDP, and include several indicators which should bring equal opportunities for all,” says Gabriela Ramos.

The 24 inclusive growth indicators are divided into four categories:

• Growth and ensuring equitable sharing of benefits from growth. These indicators help to track whether the economy is growing and living standards are increasing for different population groups, defined in terms of income, age and region of residence.
• Inclusive and well-functioning markets, where you look at indicators like gender wage gaps, involuntary part-time work and access to digital development.
• Equal opportunities and foundations of future prosperity. This category looks at the distribution of non-economic well-being components, such as quality health and education from early childhood through school age and beyond, with special focus on the opportunities for children from poor families.
• Governance; to monitor whether governments manage to take efficient and responsible decisions that result in increased equality.

“The framework includes a dashboard of indicators which should give the countries the opportunity to measure themselves against and learn from each other,” says Ramos.

“We want to make sure that the lowest 40 percent of the population, nearly half of the population in the OECD, get the chance to reach their potential.

“That is why we have proposed to invest in people and places that are left behind, by supporting dynamic businesses and an inclusive labour market. This will benefit all of society.

“This is a rethink of the growth model. It has forced us to come up with a new framework for how you measure growth. This framework will serve as a mirror which allows countries to compare themselves to other countries.”

What are your expectations for what can be achieved, and where do you go from here?

“This is a document which we have developed in cooperation with the country representatives in various committees. I consider it a success that this is now being recognised by the countries,” Gabriela Ramos tells the Nordic Labour Journal.

“It is also a very powerful message in itself to the member countries that we must do things differently and that we need these kinds of tools in order to improve and accept that what we have achieved until now is not particularly good. If you look at yourself in the mirror based on these indicators, you might not like what you see. 

“We must also make sure the governments not only pass this, but that they implement it. We cannot demand member countries to do something, but we recommend that the countries use this range of tools. We will look at the countries’ development in the light of these indicators.  

“This could for instance be the level of increase in the number of children from poor families who get quality childcare. We have a reality, we take a snapshot and monitor whether there is a development,” says Gabriela Ramos, and lists a number of countries, like Canada, Germany and Mexico that already have been giving positive signals about following up. 

Good goals, but do they stand the light of day?

The OECD delivers good analysis of the development, and their recommendations for action are good, but when it comes to the tools needed things are not good enough, Luca Visentini, General Secretary of the European Trade Union Confederation, ETUC, tells the Nordic Labour Journal.

He is sceptical to any development that does not include collective bargaining. 

“The growth we have been witnessing is a growth without jobs, and there has been no improvements in working environments. This is the responsibilities of the member countries, but the multilateral institutions also carry their own responsibility. If you don’t push to get member states to introduce collective bargaining all over, it is difficult to address inequalities.”

Visentini warns against fighting technological development, but technology must be used for the benefit of the people. Collective rights must also cover precarious work, and social rights must  cover the precariat. 

“When it comes to the labour market, there is a lot of rhetoric about economic reforms, but there is always a focus on the need to maintain flexibility. If we fail to introduce collective negotiations on a sector level, we will not see any increase in wages. For now, this is not in place. That is why we say that the analysis are good, but the tools do not stand up to scrutiny. Despite the economic growth, we are still stuck with the same problems. 

“The only place we have seen wage increases has been in the Nordic countries, where collective bargaining enjoy a strong position. The only exception here is Finland, where the economy has been severely hit and where trade unions were forced to accept wage cuts. I believe this was a mistake, but Finland’s situation was very unusual. In certain Eastern European countries the state has also increased the minimum wage, but ETUC pushes for collective negotiations in these countries too. The Nordic model should be made a benchmark in the EU,” he proposes.

Read more about the OECD initiative

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