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

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).

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

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

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

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,

In “Introduction”, author Branko Milanovic looks at “both income inequality and political issues related to inequality from a global perspective” (1). He says it is time to look at income inequality as a global phenomenon instead of as a national one (Milanovic, 2). Reasons for this include: learning about the ways people outside this country live their lives can serve pragmatic purposes, such as learning better and more efficient ways to do things, we now have the ability to focus on global inequality with the data now available, and the most important reason is that the study of global inequality allows people to see how the world has changed (Milanovic, 2). Milanovic then goes on to consider global inequality as a whole (6). He argues that

In recent years there has been an increasing interest in Income inequality. This is because of the rise in the income gap between rich and poor people within countries, and since soon between the countries.

The world is a far more connected place today than 150 years ago. The rapid rate of technological advancement which in turn accelerated international trade has led us to an age where states are politically, economically and culturally interconnected. Now, to many, this seems like a good thing, and in many cases it is: the ability to talk to someone instantaneously from the other corner of the planet, to buy something from china and for it to arrive within a week… are all positive things that stem from globalization, but underneath these superficial changes the world has seen a pretty big economic shift since the dawn of the neoliberal era and the rebirth of globalization. To be able to properly analyze the effect globalization has had on inequality we have to look at how we define it: Most neoliberalists tend to look exclusively at extreme poverty as the reference point for inequality and therefore the only objective to eliminate, in fact the World Bank’s online entries about poverty (http://www.worldbank.org/en/topic/poverty/overview,2016) talk only about the extreme type of poverty, whereas most critics of neoliberalism underline the need for economists and politicians to also focus on relative poverty and the fast growing gap between the rich and the poor. There is also the question of who we are referring to when talking about inequality; inequality can be discussed both at state level and at an individual level.

The U.S. is also facing income inequality, one-quarter of Americans make less than $10 per hour, and this is income below poverty level. Many lower wage workers receive no health insurance, pension plans, no sick or vacation days. Recent government tax policies have helped rich investors more than the low wage earners. Technology and outsourcing has increased inequality. Emerging markets of other countries are seeing increases in their income as they become more competitive in the global marketplace. Overseas work forces are becoming more skilled and sophisticated in managing their economy; as a result, wealth is shifting to those countries.

In any country, there is an economic system which allocates scarce resources to the people with an infinity of needs. There is a variety of economic systems in place around the world, varying from pure socialism to pure capitalism, with many mixed economies in between. In a realistic economic system, it is fair to say that inequality is inevitable, however this essay will argue against there being nothing wrong with inequality, while also arguing that government implementing more capitalistic policies to stimulate economic growth, will in fact lead to larger levels of inequality.