PARIS – When the benefits of economic growth are distributed very unequally, social bonds fray. Those losing ground, especially the young, may well grow disaffected, then resentful. This was a key factor behind the Arab Spring revolts; and, as protests in Chile, Brazil, Israel, Turkey, and India have shown, social tensions stemming from inequality are mounting around the globe.
To be sure, income inequality has been increasing worldwide for decades. Even while many developing and emerging economies lifted millions of people out of extreme poverty, the perception that growth meant greater inequality was always bubbling below the surface. But now increasingly persistent unemployment and under-employment are giving new impetus to the rise in inequality, as the OECD reported to the G-20 in July.
Indeed, in the wake of the 2008 financial crisis, youth unemployment now averages 16% in advanced countries, and exceeds 40% in some European countries.