Report
The skewing of income distribution in OECD countries is both a social and equity problem and an economic efficiency problem
In all OECD countries (with few exceptions, notably France and Italy), income distribution has been significantly skewed to the detriment of wage earners. This probably results both from dominant positions in goods and services markets and from the decline in wage earners’ bargaining power in the labour market. It is important to understand that this skewing of income distribution is both: A social and equity problem, with abnormally weak growth in wage s relative to the income from capital invested in companies; An economic efficiency problem: companies’ profits now exceed their investment needs and are used to either finance acquisitions or accumulate cash reserves, resulting in an inefficient use of savings and a fall in household demand. Insofar as equity and efficiency are pointing in the same direction, there should be no doubt : income distribution must be rebalanced.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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