Globalization Generates Poverty

Globalization is taking its toll on the American work force. “In the 1980’s, globalization hurt blue-collar America,” (Steven Greenhouse, 2008) this was due to the vast amount of imported steel, autos, machinery, and electronics. It is now the twenty-first century. Globalization is not only affecting blue-collar workers, but has extended its reach to white-collar workers. Jobs are being lost in America as corporations move production, and/or outsource jobs to low-wage producing countries. It is estimated over 7.9 million jobs have been lost this year, and some of these jobs will never return. This is corporation’s philosophy on how to cut cost, which in-turn translates into a larger profit margin. Because of these extensive job losses, the

Over 20 percent of the global population live in unsustainable impoverished conditions, surviving on less than a dollar a day, with approximately 50 percent living on less than two dollars. Over 2 ½ billion people have a 10% infant mortality rate versus the 0.006% of infant deaths in developed countries. As conditions worsen the poor-rich gap widens through progressive decades, reaching an average per capita income of 74:1 in 1997.1 A debate has emerged as the whether developed countries possess a duty to ameliorate the living condition of the global poor and on what grounds said duty is justified.

Globalization today has dramatically changed from many years ago. It has benefited multination corporations greatly and helped many people around the world submerge form poverty. This has created many foreign labor jobs and provided them with food, water, shelter and education. Although foreign labor has help them out of extreme poverty they are still struggling. The United States ships out products to foreign countries at a cheaper labor rate and once the job is complete the foreign country will ship it back via airplane, boat and/ or ground

Here, researchers looked at data in global income inequality over the past 200 years. By looking at the evidence, Oatley comes to the conclusion that globalization has indeed resulted in the increasing inequality gap with increasing wealth for the rich, which in turn has resulted in the increasing poverty for the poor. According to Oatley, globalization has also transformed social inequality from simply being a local problem (state based) to being an international one. This is to say that wealth is globally being accumulated by the wealthy from the poor. Here, the net effect of globalization appears to be bad. This is not only because of the fact that inequality is on the increase, but also because it has significant impacts on different nations in general. This is to say that globalization leaves various third world countries at the mercy of other wealthy nations. For instance, although the global south (developing and third world countries) are dependent on the developed nations, they are also the producers of raw material and even labor. However, raw materials are sold cheaply to the developed nations, where they are processed and refined and then re-sold at high profit margins. While the developing nations and other third world countries will indeed see some benefits here, it is

Poverty, the state of being extremely poor, affects a large proportion of the global population who are unable to access adequate levels of food, shelter, healthcare and education. Therefore, it is reasonable to assume that reducing poverty is considered to be a net positive without addressing the concept from a variety of theoretical lenses. The World Bank quantitatively defines those living in poverty as individuals with less than “$US1.90 PPP (Purchasing Power Parity) per person, per day”, by these metrics global poverty has decreased significantly, from approximately 44 percent of the global population in 1981 to an estimated 9.6 percent in 2015 (WB PovcalNet, 2016). Although this is an impressive improvement there are still many people living in poverty around the world. This essay will examine some of the methods used to combat poverty, as well as how it has changed over time. These methods include both free trade, fair trade and their alleged opposition to each other as well as comparing domestic and foreign aid.

Despite the march towards globalization, many people in South America and Sub-Saharan Africa are still mired in poverty. According to Thomas L. Friedman, author of The World is Flat, suggests that the world went into a period of globalization in the 1970’s. In this era of globalization, countries such as China, Russia, Mexico, Brazil, and India initiated what Friedman calls “reform wholesale.” This reform wholesale refers to the focus of the emerging countries on “adopting more market-friendly macroeconomic reform.” Along with the five countries above, many countries in Sub-Saharan Africa and South America also attempted reform wholesale. Rather than becoming major world powers, most countries in these continents failed. Countries need to

In the context of globalization, or interaction between people, companies, and governments of different countries driven by international trade, global inequality matters because it parallels the asymmetrical globalization that limits poor countries. This asymmetry only increases the gap between rich and poor countries. Low-income countries have little opportunity to improve because they have inadequate means and opportunities. Inequality affects both economic and social growth and poverty. For low-income countries, the inequality is reflected in poor social and civic institutions. These incapable institutions, in turn, do little to improve conditions. Global market failures and

Although consumers at the bottom of global economic pyramid (BOP) represent the majority of the global consumer market, they have so far largely overlooked. There are a growing number of international consumer goods companies which are tapping into the low-income markets to make large profits, as well as to help lift billions of people out of poverty.

f the theories concerned with globalization and poverty suggest that globalization has been related to rising inequality between people and nations, and that the poor do not always share in the gains from trade. Some scholars in the international affairs arena like Collins and Nathan have suggested that globalization has a tremendous influence on economic development. Nathan argues for example that due to globalization, 800 million Chinese people have been pulled out of poverty (P.8 Nathan, 2016). Other scholars such as Collins disagree with the previous statement and indicate that globalization has made the middle and lower classes of advanced industrial countries like China unhappy and in addition, it has increased global inequality between and within countries. According to Collins, The UN Development Program reports that the richest 20 percent of the world’s population consume 86 percent of the world’s resources, while the poorest 80 percent consume just 14 percent (P.5 Collins, 2015). In addition, many scholars have emphasized the negative effects of economic liberalization with relation to poverty figures. Some argue that globalization has not helped people out of poverty, but has moved more nations into poverty. As a result, globalization poses a threat to development and equality and increases disparity between people (P.7, Stiglitz 2002).

The question under consideration is “can globalization reduce poverty around the globe, and should this be the aim? Globalization is characterized as an unstoppable cross-border movement of goods, people, ideas, and economic activity that leads to greater economic interdependence amongst states and integration of market forces across territorial boundaries. The cross-border movement of financial securities, technology, and information, allows various state and non-state actors to enhance their competitiveness globally as well as create better economic conditions within state boundaries to spur rapid economic growth that, if governed correctly, may improve the general quality of live for people.

In the last twenty years, known as globalization years, poverty and inequality have both increased. The number of poor people has been cut in half over the past twenty years but there is still enormous inequality as well as poverty in the world. Globalization generally is expected to reduce poverty through faster growth in more integrated economies. Countries like China and India have benefitted from careful and managed globalization and continue to improve the economic growth in their economies and as a consequence poverty in such countries has gradually decreased. Nevertheless, poverty and inequality are still prevalent in the economies of nations (Heshmati, 2005).

Economic globalization is the key factor in what divides countries based on wealth and poverty. Good economic globalization within a country will lead it to have a healthy interdependence which will lead citizens of that country to a happier life. Whereas a country that does not have a good economic globalization is made a easy target for companies to take advantage of for things such as cheap labor. To say that it is a wealthy countries duty to give wealth to the less fortunate countries, is not an accurate statement due to the fact countries that are in poverty are usually in that situation for an accompanying reason. There is also a lot of issues that would arise from such. So therefore a country that has wealth should be more than able to keep their own wealth.

The rise of globalization following WWII generated three important factors that define today’s world. McNeill and McNeill agree with Pollard, Rosenberg, and Tignor that multiple economic changes, such as the creation of financial institutions like the International Monetary Fund (IMF) contributed to the globalization of the world economy. Carter and Warren further this argument by claiming that globalization has caused shifts in the modern economy, namely the rise of Asian economic powers. However, all three historians agree that the rise of globalization goes hand in hand with the rise of inequality in today’s world. Gaps in power, wealth, and access to information have only widened due to the trend of globalization. The final key factor defining our world today are the ongoing processes affecting development countries. McNeill and McNeill argue similarly to Carter and Warren that the end of imperialism generated new nations who quickly realized the free market was a pathway to stability. However, Pollard et al. and McNeill and McNeill place importance on financial institutions like the IMF forcing developing nations to reform their economies to be subservient to the world’s economy. Together, these historians argue that the trend of globalization following WWII caused factors like the modern global economy, the rise in inequality, and the development of new, decolonized nations to be key determiners in the world today.

The countries that have experienced high and rising levels of poverty are more often than not, the developing countries that have been marginalised from the process of globalization. Think of North Korea or many countries in Africa. Such countries have insufficient levels of international trade and investment -- not too much. Whether poor countries are poor because they do not trade enough or because poverty stricken countries are prevented from engaging in the global economy, less globalization is generally associated with less development. Ernesto Zedillo, the former president of Mexico seems to have understood the power of globalization when he said, "In every case where a poor nation has significantly overcome its poverty, this has been achieved while engaging in production for export markets and opening itself to the influx of foreign goods, investment and technology -- that is, by participating in globalization."

Globalization can be seen as a major threat for manufacturing jobs in the developed world, however, can also be a benefit for developing world citizens who receive thousands of jobs a year although they don’t receive a high salary. Maurice Allais, a French economist states that this unemployment, of course, has only been able to develop because of the existence of low salaries and insufficient flexibility in the labor market (April 10th, 1999). This indicates that globalization has jeopardized Western countries jobs because companies are moving their establishments to developing countries where they don’t need to pay employees as much and where land is cheaper so overall businesses benefit from this. Also, employees in the developed world are at risk of becoming redundant as they are susceptible to face pay cuts in jobs. Employees are less skilled in the developing world as they don’t receive the benefit of an education like developed countries do. So a company may want to build factories in these countries because environmental laws aren’t as strict. Establishments in these areas provides promising jobs for the local people and allows them to learn new skills, however they are set on minimum wage which in developed world countries, this would not be enough to live on, wherein third world countries this is still a low amount so this is not enough to bring them out of poverty meaning that the only one who benefits from this is the company. Although there have been several arguments against exploitation and oppression, the majority of developing countries do not have existing laws which take minimum wage