By Daniel Hunter
Inequality in income has a "statistically significant impact" on economic growth, according to the Organisation for Economic Co-operation and Development (OECD).
The think tank said that rising income inequality in the UK had cost the economy 9% of growth between 1990 and 2010. Across the pond, the US lost out on 7% worth of growth.
"This compelling evidence proves that addressing high and growing inequality is critical to promote strong and sustained growth and needs to be at the centre of the policy debate," said OECD's secretary general, Angel Gurría.
"Countries that promote equal opportunity for all from an early age are those that will grow and prosper."
The gap between the lowest and highest paid people is at 30 year highs in 34 countries, the OECD said. The richest 10% in those countries earn 9.5x the poorest. In the 1980s, that figure was 7x.
The report also suggested that under-investment in education was widening the gap, with parents who have low levels of education suffering the most.
The OECD called for governments to go beyond just implementing new measures.
"Policy also needs to confront the historical legacy of underinvestment by low income groups in formal education," it said.
"Strategies to foster skills development must include improved job-related training and education for the low-skilled, over the whole working life."
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