758 Words4 Pages
Why richer are getting richer and poorer are getting poorer? Globalization is taken as facilitator of international trade and economic growth. There might be various parameters for the measurement of the connection between globalization, international trade and economic growth that is derived from the mobility of investment, human capital to communication and transportation that fosters interdependency and other forms of economically beneficial and social relationship between countries. In economy each nation sets policy to manage its resources to maximize the benefits of trade for its people. Government makes policy not only concerning trade with other but also the degree to which the state is involved. Government try to optimize it’s…show more content…
To compare inequality among nations, incomes and living standards of their citizens should be reviewed. The World Bank has determined that people living on $1 per day in developing countries and people living on $2 per day in medium economies are considered poor (Infoplease, 2005). In contrast to the $1-$2 per day standard, in the United States, Japan, Europe or other developed nations, a person trying to live on less than $1,000 per year is unimaginable because the cost of living is many times this amount. The income gap that exists between rich and poor counties has become substantial. There are many reasons for economic inequality within nations and societies, and they are often interrelated. There might be several factors like inequality in wages and salaries, the income gap between highly skilled workers and low-skilled or no-skills workers, wealth concentration in the hands of a few individuals or institutions etc. A major cause of economic inequality within modern economies is the determination of wages by the capitalist market. In the capitalist market, the wages for jobs are set by supply and demand. If there are many workers willing to do a job, there is a high supply of labor for that job. If few people need that job done, there is low demand for that type of labor. When there is high supply and low demand for a job, it results in a low wage.
Open Document