Interdependence On Inequality

The insurgents of globalization are exacerbating income inequality, within developing and developed nations. One of the most powerful country’s in the world the United States an Industrialized nation are allowing large corporations to seek maximize profits without regards for the local

The article details arguments regarding the consequences of globalization – and largely find that there is little consensus among the literature. This is, primarily, since few scholars can agree on the best way to measure globalization. They note three major debates in the field – It’s relationship to inequality (international and domestic) as well as government spending. Regarding international inequality, it does seem that globalization increased the rate of per capita growth.

It can be argued that the trend for global inequality is that “The rich get richer, the poor get poorer.”

Income inequality has been a major concern around the world, and it mainly links to how economic metrics are distributed among individuals in a country. Economists generally categorise these metrics in wealth, income and consumption. Wilkinson and Picket (2009) showed in their studies that inequality has drawbacks that lead to social problems. This is because income inequality and wealth concentration can hinder or delay long term growth. In 2011, International Monetary Fund economists showed that less income inequality increased the duration of countries’ economic growth spells more than free trade, low government corruption, foreign investment or low foreign debt (Berg and Ostry, 2011).

In her piece, “Why Global Inequality Matters,” Nancy Birdsall argues that global inequality is an issue because it can negatively affect the social life, the political process and the economy of countries (especially developing ones). She looks at “how global integration affects poor versus rich countries (and people within countries), and on the resulting limits to poor countries’ (and poor people’s) ability to capture the potential benefits of globalization.” In order to argue her point further, she expounds on why global inequality matters and explores the possible role that globalization may have in perpetuating global inequality. Inequality matters, especially in developing countries with already weak institutions, because it may runs “the risk

Income Inequality is “The unequal distribution of household or individual income across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of population.” (Investopedia). Some believe income equality is the biggest problem of the 21st century, President Obama believes it to be “the defining challenge of our time” (white house). Some economist believe that increase inequality has a correlation effect with higher rates of health problems, social problems, that it harms economic growth, creates higher persistent unemployment and polarizes opportunity. Historically one can make the argument that other advance nations who have collapsed, have had great inequality and economic stratification. Other economist argue that true ‘equality’ is impossible because people have different skills and abilities. Income inequality natural and a benefit because I creates incentive to work harder. It’s important to understand the effects of income inequality on a nation’s society and labor force. What type of problems income inequality could cause or doesn’t cause. This essay will give a comparative study of Income inequality in the United States of America and France, and how it effects labor and economic activity.

Economic inequality among countries has been declining due to the increased inequality within countries. This has been mainly caused by the introduction of globalization, resulting in the decline of production in the developed countries. For instance, in my global issues class, we had to discuss globalization and whether it was a good or bad thing. Whereas, some of us said it was a good thing, few of my classmates stated that globalization is known for making the rich even richer, and increasing uneven economy within

Specifically in the United States globalization has created a system of increasing income inequality. The value of education and technological advancement has meant that those who can afford college and the changing technology are more likely to succeed and thus see a growth in their economic viability, while the opposite exists for those who cannot.

In developed nations income inequality has also drastically increased. For instance just recently in the United States, the richest americans (the top 1%) made 19.3% of all the United States income, which is the most drastic income gap since the twenties. “The top 1 percent of U.S. earners collected 19.3 percent of household income in 2012, their largest share in Internal Revenue Service figures going back a century” (Paul Wiseman). Both developed and developing nations are having major issues dealing with income

International trade may or may not reduce income inequalities within developing countries but, it can enhance trade-induced growth, which increases average incomes providing more resources with which to tackle poverty. Poor countries, such as Bolivia and Paraguay, have more unequal distributions of income than the United States. The distribution of income in the United States is less equal than in some moderate-income countries. The United States has the most unequal distribution of income of any high-income country in the world. A reason why the United States distribution varies between the poor countries and the high-income countries is because of the income mobility. Income mobility are the changes in an individuals or a family’s income over time. That is another reason why inequality distribution occurs because just because an individual is in one quintile one year does not mean they will be in that same quintile the year after that. People are constantly moving up and down in the social statuses. For instance, a person in the bottom quintile, or poverty level, might open a new business and it becomes a great success and that person then becomes a billionaire, that person just went from the bottom quintile to the top quintile in a matter of a few years. The complete

In the past 20 years’ income inequality has become a major issue in particular within the United States (US) where a significant income gap has occurred. This is exemplified by the US Gini index (GI), a measure of income inequality, which has risen from 43 in 1990 to around 47 in 2010 and is continuing to trend upward (David Moss, 2011). This has now become a problem that both develop and developing nations face. The main causes being globalization and technology. In developed countries globalization has increased cheap foreign imports with technology making importing extremely cost efficient. There’s also the outsourcing or the replacement of low skill jobs with newer technology. These two processes have contributed to higher profits for executives while low skill workers are losing their jobs by the thousands. In developing countries globalization has led to low skill workers having to compete in cheap labor markets dropping their wages even further. Technology in these developing countries has also increased income inequality with their lower class unable even be literate enough to learn newer technology. Therefore, inequality damages economies and workforces on a world scale

Two epochal forces are sweeping the world today: the spread of new technology and the spread of free markets. Their combined effect has been to let capital, labor, and production move more freely across borders. This freedom of movement has allowed for a more efficient allocation of

In the view of a supporter, globalization means a taste of culture, access to goods, more choices to choose from, and boundless opportunities in cooperation. Towards opponents it is social injustices, exploitation, and terrible working conditions that causes people to go against. Over time income inequality has been growing a distance over the years. There are debates and arguments to this day about the income inequality. Within the nation, opponents are voicing that “freer trade and investment allows international companies to close the factories in high wage”. While the low waged/ developing nations are moved leading to the increase in wage in both blue collar and white collar. In between nations, there are claims of whether globalization

Inequality has increased within the most advanced and emerging markets and developing countries (EMDCs), a phenomenon that has garnered considerable attention with President Obama calling widening income inequality the “defining challenge of our time.” Irrespective of culture, religion and ideology, inequality concerns and affects everyone. Inequality can serve as an indication of the shortage of income mobility and opportunity―a reflection of the perpetual disadvantage for certain sectors of society. Increasing inequality also has serious implications for macroeconomic stability and economic growth, it can concentrate political and decision making power in the hands of a few. This in turn results in the inefficient allocation of human resources,

However, jobs are transferred to those lower labor cost countries which have access to global markets and can export cheap goods. Friedman explains, “Once people get a taste for whatever you want to call it—economic independence, a better lifestyle, and a better life for their child or children—they grab on to that and don’t want to give it up” ( Friedman 170 ). People in developing countries are benefitting from the economic prosperity. Their income is going up, their living standard is rising, and they have full confidence in the future. Would they like to give up what they own now? Certainly not. Similarly, Marantz is also aware of the rise of income that globalization realizes. “He impressed coworkers with his American accent, and when he got his first paycheck, he tasted the liberating power of disposable income” ( Marantz 289 ). Employees can earn around five thousand dollars per year, which is more than five times the per-capita income. Therefore, they are able to dispose their income freely and consume whatever they want. Both Friedman and Marantz mention the economical benefits that globalization brings about, but they neglect the negative effects globalization exerts on developed countries. People in developed countries like the united states are confronting more pressure in finding jobs, due to the relatively lower labor cost in developing countries and the currency exchange rate, which make people in those countries more competitive for the job. Even if they have jobs now, they are still at the risk of dismissal Globalization promotes global economic growth, creates jobs for some countries, and lowers prices for consumers, because the opportunity cost for each products decreases by means of collaboration between countries, but it doesn't match the decline of wages among some people and will not offset the