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Rise in UK inequality 'stark', says ILO

The rise in inequality in the UK has been 'particularly stark' since the 1980s, according to the Global Wage Report from the International Labour Organisation (ILO).

It said that problems in the labour market and stagnating wages was driving inequality across the world, not least in developed economies - while some emerging markets have seen some modest improvements.

Wage growth globally has been slowing down, and what modest gains there have been are almost entirely down to China and other emerging economies.

In developed economies such as the UK wage growth 'has slowed to almost zero,' according to Sandra Polaski from the ILO, 'with actual declines in wages in some'.

Adverse effects of inequality

The report said that inequality has been shown to undermine economic growth, affecting its 'pace and durability', and had an adverse impact on 'health and education, on political and economic stability, and on the social consensus required for well-functioning societies'.

Inequality can also contribute to risk of crisis - and has been singled out as one of the possible causes of the 2008 financial crisis in the US.

Redistribution through taxation and 'social protection systems' can reduce inequality, but 'cannot bear the full burden' alone.

'A comprehensive strategy will include minimum wage policies, strengthened collective bargaining, elimination of discrimination against vulnerable groups, as well as progressive taxation polices and adequate social protection systems,' Ms Polaski said.

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