Megatrends are exacerbating inequality, and are accelerating, action is urgent.

 

Action on global megatrends is urgent – but it cannot be blunt; it must be carefully designed. Their effects are not uniform, and that complexity matters. On average, urbanisation, population growth, and internet coverage tend to reduce inequality, while net migration slightly increases it. But averages obscure distributional effects. For the poorest households, the picture shifts. Urbanisation, internet coverage, and migration can raise their average earnings – but population growth reduces it, at least in the short term. Crucially, these gains are not universal – urbanisation and internet access benefit richer countries, while in poorer contexts they can initially reduce the average earnings of the poorest. Migration follows a similar pattern – weak overall effects, but positive only for higher-income countries and negative for low-income ones. Megatrends, particularly in low-income settings can be mutually reinforcing – accelerating risks. Taken together, the measures globally tell a clear story of widening within and among countries inequality, which needs to be reversed if future social development goals, and principles, are to be taken seriously. The average earnings of the bottom 40 per cent shows some of the strongest effects on family outcomes, followed by the Gini, and then the Palma ratio. This suggests that it is not just the extremes that matter, but how income is distributed across the whole of society. When inequality widens between the poor and everyone else, outcomes deteriorate. Most importantly – when the poorest hold a larger share of national income, outcomes improve – consistently and significantly. The family policy analysis in this report suggests that these policies shape how megatrends translate into inequality. Universality – with the notable exception of population growth – tends to improve the average earnings of the poorest 40 per cent more than non-universal settings, particularly in the case of UCBs and UCCs. Contemporary public policy systems and social development frameworks, by failing to explicitly acknowledge and adequately support the family as the central social unit, risk contributing to rising inequality and a weakening of social cohesion, particularly in light of mutually reinforcing megatrends in populations already experiencing the poorest outcomes. The consequences of this inaction will be far-reaching, increasing the likelihood of deprivation, poverty, food insecurity, displacement, and, ultimately, social, and political instability.