The report by the U.N. Conference on Trade and Development said the share of wages in total income fell in most developed and in many developing countries in the past 30 years, such as 5 percentage points or more in Australia, the United Kingdom and the United States and by 10 percentage points or more in France, Germany and Ireland.
"In several countries, the richest 1 percent of the population now accounts for 10 to 20 percent of national wealth," the report said.
In a similar shift between countries, the per capita income of the 15 richest nations was 62 times that of the 15 poorest countries in 2000, compared with 44 times in 1980.
UNCTAD urged governments to use fiscal and labor market policies to reduce income inequality, saying such measures would lead to inclusive growth, reduce income inequality and help expand demand for businesses to increase investment.
"This goal is worthwhile not only for reasons of fairness and social welfare, but because it would improve economic performance," UNCTAD said, noting high income inequality deprives people access to education and credit, resulting in a waste of a country's economic potential.
The UNCTAD report also warned growth is slowing in all regions of the world "hamstrung in part by austerity measures that are hampering demand in the major developed-country markets, thus cutting the export prospects of developing countries." Global growth dropped to 2.7 percent in 2011 from 4.1 percent in 2010 and that growth for 2012 is expected to be below 2.5 percent.
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