Trade unions are calling for new policy approaches to tackle income inequality as the Organisation for Economic Co-operation and Development (OECD) publishes a report demonstrating an increase in pay gaps between genders and the rich and poor.

The report, In It Together – Why Less Inequality Benefits All, reveals that the pay divide between the richest and poorest citizens is at its highest level in 30 years, increasing during the recent financial crisis due to the fall in employment.

John Evans, General Secretary of the TUAC said:

“Rising income inequality is no longer just an ethical or normative issue – it has economic costs and restrains a broad-based and sustainable recovery. There are also serious long-term consequences. High inequality leads to low inter-generational mobility.

“The capture of the policy agenda by top income earners through their excessive domination of political funding in some countries is leading to a serious distortion of public policy and builds inequity into economic growth models.”

In response to these findings, the Trade Union Advisory Committee (TUAC) has called on the OECD to change policies and institutional strategy to reverse this incline in income inequality.

The OECD’s report, launched today (Thursday) substantiates the concerns of the TUAC and its affiliates, revealing that more than half of all job creation since the mid-1990s was in the form of non-standard work such as part time or temporary positions. Non-standard workers were found to be worse off in terms of job quality because of a lack of security, earnings and training.

The report highlights the need to focus on the “quality of jobs,” suggesting the need to modify tax systems that favour richer workers. The TUAC also feel that governments must maintain appropriate income-support policies as well as countercyclical social spending.

Evans said:

“It is essential to take action to reverse the decline of the share of wages for low and middle incomes across OECD countries towards injecting purchasing power into the real economy by strengthening collective bargaining systems and raising minimum living wages.”