Taiwan could find a report recently released by the Organization for Economic Cooperation and Development (OECD) helpful in devising strategies to narrow the widening income gap in the country, a government planning agency said.
The Council for Economic Planning and Development said the strategies introduced in the latest report by the OECD aimed at creating a more balanced distribution of income could serve as a valuable reference in addressing the issue.
REPORT
The organization’s report, Growing Unequal?, observed that income differentials in its member countries over the past 20 years had widened and analyzed factors that contributed to the situation.
The report pointed to a changing population structure and the impact of globalization as playing significant roles in the widening of the income gap, the council said.
Less access to information technology recorded among less educated or jobless households, for instance, accounted for the continual decline in their employment rate, the report showed.
Workers with higher education or more sophisticated skills, on the other hand, earned higher pay as well, causing the income gap to widen.
REDISTRIBUTION
The report proposed a redistribution strategy and a work strategy, which, in combination, could effectively narrow the differences, the council said.
The redistribution strategy refers to methods such as imposing higher marginal tax rates on the rich and providing subsidies to the poor, while the work strategy involves boosting employment to minimize the risk of poverty.
The report said the adoption of more proactive work policies would help narrow the gap.
The council said that OECD countries have pushed for work welfare policies in recent years as part of their efforts to assist low-income families in maintaining basic living standards.
Some programs, for example, have provided subsidies to employers as incentives to hire low-paid workers, the report said.
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