FES-SASS workshop "Inequality on the rise? How to reverse a global trend and pave the way for shared prosperity?"
Event: Sustainable Growth Model
On November 9th and 10th 2015, researchers and experts from China and abroad met at the Shanghai Academy of Social Sciences (SASS) to discuss the topic of rising income and wealth inequality and to find solutions against it.
During many talks and sometimes heated debates, the status quo of inequality in industrialised countries und emerging economies was addressed as well as the relationship between the global development of inequality and economic growth. Further topics were the causes of inequality and possible policy options.
While a broad consensus could not always be reached, some agreements did emerge in key areas: Participants agreed that inequality is liable to destabilize an economy through rising debt levels, affects the general level of well-being in a society and will constrain consumer demand and thus possibly growth. Fighting inequality and reducing poverty thus not only has an intrinsic moral value but is also beneficial to the economy.
Regarding the recent global economic crisis, inequality and imbalances are the most important causes. Asking for ever increasing financial returns on capital without providing the basis for higher productivity also slows the economic recovery. Some countries, which translated domestic inequality into international competitiveness by slowing wage growth, reducing unit labour costs and weakening domestic demand, are on an unsustainable development path. According to the discussions in the conference, every country and government should take actions against inequality and cooperate with other countries and partners because of the globalized nature of the problem.