Tuesday, 9 December 2014

Don't Read if you are Poor

A clear, well-argued paper from the OECD shows why poverty is bad for your economic health.

Federico Cingano and Michael Förster explain in straightforward terms what happens when countries allow their poor to get poorer. They show that increasing income differences (the overall measure is called the "Gini Coefficient") by one Gini point lowers GDP per capita growth by 0.1%. The cause? Mainly, lower educational achievement amongst the poorest people; more inequality means that poorer people spend fewer years in school, and that means lower literacy and numeracy. Poor people are not reading.

And where does Scotland come in all this? 

Guess...and you'll be about right. In the UK "...the cumulative growth rate would have been six to nine percentage points higher had income disparities not widened..." over the last 20 years. Our unique position as the European country with the widest differences in income - i.e. the worst wealth gap - has been bad for all of us, not just the poor people who have suffered as a result. 

Scotland, as we know from SCVO amongst others, suffers  from some of the worst poverty in the UK; the Scottish economy is being held back as a direct result.

Time to take Scotland out of this stranglehold on growth.

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