Huge gap between rich and poor must close: IMF

NEW YORK (CNNMoney) -- The chief of the International Monetary Fund is encouraging governments to focus on job creation and narrowing the gap between rich and poor.

"We need policies to reduce inequality, and to ensure a fairer distribution of opportunities and resources," IMF Managing Director Dominique Strauss-Kahn said in prepared remarks Wednesday morning.

The speech comes two days ahead of a key meeting of G-20 nations in Washington, D.C., where finance ministers will try to push through standards reducing global economic imbalances.

The meeting is likely to focus on trade and the rising cost of raw materials like oil. But Strauss-Kahn also urged governments to focus on the "dangerous cocktail" of high unemployment and rising inequality.

He pointed to recent uprisings in the Middle East and North Africa as an example of this "social crisis," but also said these types of problems were not isolated to developing nations.

The rising income gap and sluggish job creation in advanced economies, are signs that both emerging and advanced countries need to focus on jobs and inequality, he said.

"While recovery is here, growth -- at least in the advanced economies -- is not creating jobs and is not being shared broadly," he said.

Leading up to the Great Recession, the gap between the richest Americans and the middle class reached record highs not seen since the Great Depression.

According to IRS data., wages for average Americans have been stagnant since the '80s, while the richest 1% have seen their incomes rise by a third.

Straus-Kahn pushed governments to encourage collective bargaining by unions as well as investments in health and education as ways to combat inequality.

He also encouraged progressive taxes and protecting social safety nets -- like Social Security and Medicare in the U.S.

"Strong social safety nets combined with progressive taxation can dampen market-driven inequality," he said