Despite strong economic growth that produced millions of new jobs since the early 1990s, income inequality grew dramatically in most regions of the world and is expected to increase due to the current global financial crisis, according to this report. The report also notes that a major share of the cost of the financial and economic crisis will be borne by hundreds of millions of people who haven’t shared in the benefits of recent growth.

The report notes that while a certain degree of income inequality is useful in rewarding effort, talent and innovation, huge differences can be counter-productive and damaging for most economies, adding that “rising income inequality represents a danger to the social fabric as well as economic efficiency when it becomes excessive”.

The report marks the most comprehensive study to date of global income inequalities by the Institute, and examined wages and growth in more than 70 developed and developing countries. It calls for longer term action to put the global economy on a more balanced track, including promotion of the ILO’s Decent Work Agenda to link economic, labour and social policies to boost employment and improve incomes and income distribution.