Global Citizenship Report 2017

Left unaddressed, the drivers of inequality will slow future economic growth. Economic inequalities are found everywhere — across geographies, generations and industries. Inequality and other factors are contributing to the erosion of social trust and cohesion around the world. 1 2 3 FINDINGS ON INCOME INEQUALITY CASE STUDY The Effects of Income Inequality Income inequality within many OECD countries has increased substantially in recent years, reversing a long period of decline. But it is still unclear why, exactly, this is happening, and what the long-term effects will be on developed economies. Citi Global Perspectives and Solutions (GPS) — our research and thought leadership division — examined the issue of income inequality in a September 2017 report entitled Inequality and Prosperity in the Industrialized World: Addressing a Growing Challenge. There were three important findings. First, if the various drivers of inequality are left unaddressed, future drag on economic growth is likely. Thus, from an investment perspective, it makes good economic sense to understand and address the drivers of inequality. Second, economic inequalities are everywhere — not just between countries but also between regions within countries, and between generations, industries and firms, and putting an intergenerational lens on this sharpens the issue. Economic inequality is indeed integrally connected to issues such as youth unemployment, social mobility and pension funding. Finally, inequality, as well as the impact of other exacerbating factors such as lower social care budgets and the reduced provision of other government-funded services, is contrib- uting markedly to the erosion of societal trust and cohesion and the fragmentation of the political process. Inequality will likely be an increasing factor in election outcomes, with social media playing a growing role in shaping perceptions. These findings suggest that a consensus urgently needs to be reached between government, the public sector, the private sector and society at large about how to tackle the challenge of inequality in a way that promotes inclusive and necessary economic growth. Citi GPS report Inequality and Prosperity in the Industrialized World: Addressing a Growing Challenge 90