The International Monetary Fund urges the United States to solve the problem of poverty and inequality

06/07/2016

Kết quả hình ảnh cho The International Monetary Fund urges the United States to solve the problem of poverty and inequality

International Monetary Fund (IMF) urged the US to fight "urgently" against poverty and inequality which is weighing on the future of this country's economy, while the economy is in good condition.
According to the annual survey of leading economies in the world announced on 22/6, the IMF cut its growth forecast for gross domestic product (GDP) of the US this year to 2.2%, 0.2 points percent down in comparison with forecasts made in April this year. In 2017, the IMF has made forecast growth of 2.5%.
IMF reviews the US increases interest rates "very progressive" and Fed will have to accept that inflation (currently at 1.1%) may be temporarily over the 2% target.
Speaking at the press release, IMF Managing Director Christine Lagarde noted several key challenges in the long term but insisted: "Overall, the US economy is in good condition." Challenges that noted by Ms Lagarde under the symbol "4P", including reducing labor participation, increasing productivity, slow polarization and increasing poverty. “If we do not pay attention to four factors, participation, productivity, polarization and poverty, it will corrode the foundations of growth and curb the rise in living standards of the US” - she warned. In addition, these factors also added to the dangerous trends in the long-term impact on earnings.
IMF noted that the labor income has fallen by 5% for 15 years in the United States and the size of the middle class has never been so low as during the past 30 years. "The distribution of wealth and income is increasingly polarized and poverty also increase" - IMF stressed and affirmed that the US needs urgent attack on poverty.
According to the IMF, 1/7 of Americans, or 46.7 million people, live in poverty. However, 40% of them have jobs. Fund recommended tax credits should have better targets and increase the minimum wage federal (currently $ 7.25 / hour).
Besides, the IMF also emphasized the impaired participation in the labor market which will be able to continue in the coming years, particularly with the effects of demographic, it can be stopped due to the measures to facilitate the work for women (supporting childcare, parents) and especially thanks through immigration reform.
The labor participation rate, which includes those working or actively looking for work, fell by 5 points in the last 5 years, from over 67% in the 2000s to below 63% in 2015.

Expenditures for infrastructure also needs to be increased: "New investments are urgently required (...) particularly with regard to the surface transport operations". According to the IMF, it will help remove the bottlenecks and boost the productivity of the individual activities. A ranking of the quality by the IMF showed the current infrastructure of the United States is far behind Germany and Japan, and just before Korea. /.
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