LONDON, May 25 (Reuters) - As authorities around the world look to reshape economies in the face of the COVID-19 shock, tackling growing inequality is on the priority list for many.
Here are some of the proposals put forward by governments, central banks and global bodies.
UNITED STATES
President Joe Biden’s $4 trillion plan to rebuild the U.S. economy aims to target cash at those taking care of children, the elderly and disabled. In addition, his “American Families Plan” creates free universal ‘pre-Kindergarten’ and adds another $200 billion of childcare.
White House economists argue this influx of government cash is essential to fix and grow the U.S. economy. It will get women back into the workforce who left because of COVID-19, allow other stay-at-home caregivers to take jobs, and pay those who do care-giving work as a job a more livable wage.
The Federal Reserve meanwhile has committed to “inclusive” full employment, citing the drag on economic potential from marginalised groups and income inequality.
CANADA
The Bank of Canada said this month that some of the monetary policy tools it is using to address COVID-19 could widen wealth inequality and that it was looking closely at the issue.
EURO ZONE
Policymakers hope a 750 billion euro ($918 billion) recovery fund will help address inequality by boosting long-term growth potential.
The plan aims to reduce economic disparities and could add as much as 4.1% to gross domestic product under a high impact scenario, S&P Global estimates.
The European Central Bank is looking at challenges posed by inequality in a strategic review of its monetary policy.
GERMANY
German Finance Minister Olaf Scholz vowed this month to raise the minimum wage after September national elections, hoping for support from about 10 million low-paid workers to help his Social Democrats (SPD) avoid a bruising third place.
The COVID-19 pandemic is expected to push up the proportion of people living below the poverty line in Germany. It stood at a record high of almost 16% at the end of 2019.
UNITED KINGDOM
British Prime Minister Boris Johnson this month announced urban renewal projects worth 830 million pounds ($1.2 billion) outside London to help “level up” the economy.
Gaps in productivity between London and other regions were as wide as they were in 1901, according to a report for the government last year.
Wales plans to pilot a universal basic income scheme covering the basic cost of living.
AUSTRALIA
Australia’s conservative government has abandoned a decade of “debt and deficit disaster” rhetoric, to focus on running the economy hot and driving the jobless rate lower heading into its next election, expected in 2022.
Before the coronavirus pushed Australia’s A$2 trillion ($1.6 trillion) economy into recession, the government focused on bringing the budget to black.
But the recession triggered the largest budget deficit since World War Two in 2019/20, and a larger gap, of at least A$150 billion ($117 billion), is expected in the fiscal year ending June 30.
INTERNATIONAL MONETARY FUND
The IMF last week unveiled plans to revamp the way it conducts economic assessments to better account for risks related to climate change, inequality, demographics and evolving digital technologies.
OECD
Talks are taking place among nearly 140 countries through the Organization for Economic Cooperation and Development for a global minimum corporate tax, so governments do not compete with each other offering lower taxes to attract large multinational firms.
The U.S. government is hoping for support from G7 economies for a 15%-plus tax.
($1 = 1.2853 Australian dollars)
(Reporting by Dhara Ranasinghe; editing by John Stonestreet)
Source: Reuters