Trade and Income Inequality

Trade liberalization inspires economic growth, and ensures sustainable prosperity for everyone. The reduction and removing of tariffs has made materialistic goods like food and clothes more available and affordable to countries that are developing and have low GDP per person. For example, the average Kenyan

According to the World Bank, from 1993 to 1998, poverty rate has reduced by 14 percent in developing countries, similar to about 107 million people. This may result from receiving foreign investment that plays an important role in local economy growth. For example, the proportion of population living in poverty in India decreased by half in the two decades, from the 1970s to 1990s, while the number of Chinese in poverty declined by approximately 210 million during twenty-one years, from 1978 to 1999 (Healey 2008). In other words, the standard of living is improving due to the benefits of international economic activities.

Economic inequality can be defined by the unequal access to economic resources, in the form of opportunities, wealth, capital, land, etc., which determine the individual’s or the group’s level of power. Generally speaking, individuals and groups with high access to resources have high levels of vertical and horizontal power, which in it turn generate more access to resources and power. The unequal access to economic resources is institutionalized within a society. Thus, economic inequality has far reaching effects and manifestations in other social and political institutions. In addition, with increasing role of global economy on national economies, and the increasing inequality in the global market, which is reflecting on increasing inequality in it turn increases inequality within nations. Thus, the interest among political economists has increased in an effort to understand stratification and to create policies which aim to elevate economic inequality globally and nationally.

Economic and income equality have risen significantly in the United States over the years. In 2013, the top 1% accounted for roughly 20% of America’s income, before taxes. According to the Congressional Budget Office, the average income of the top 1% of America’s population has “grown by 275 percent between 1979 and 2007,” even after taxes. In stark contrast, the middle class has experienced growth of about 40 to 60% and the lowest income population has only experienced growth of about 18%. This resulted in the richest households nearly tripling their share of the country’s income while the majority struggled to keep up.

We live in a day and age that is immensely affected by wealth distribution and the rapid growth of inequality. With the middle class disappearing as we speak and President Obama’s presidency coming to an end, many are curious about where America is headed next. The Center for Research on Globalization reports that “the yearly income of a US household dropped by a massive 12 percent, or $6,400, in the six years between 2007 and 2013” (Doman). Yet, many Americans remain oblivious to how seriously the economy’s crisis is affecting them and still place hope in the “American Dream”. Meanwhile, the rich continue to gain wealth while the poor are divulging quickly

Globalization has done a lot over the past hundreds of years to influence income and wealth inequality in the United States. Once different nations started to trade goods and services with one another it was a whole new world. Trading with different states is one thing but trading all over the globe became a huge deal. It is the reason some people in the world are as wealthy as they are. Starting years ago during the industrial revolution up until now globalization has caused major changes. Starting back then people who owned small shops and then could trade and invest in larger manufacturing changed their lives. They then became some of the wealthy people during the industrial revolution then the people who used to be their equals now

The two authors argue the main issue that India is continuing to face are due to the lack of concern for citizens especially for the poor citizens and women. Dreze and Sen proceed into their work as they continue to portray the way in which the citizens of India were being oppressed by the new economic and political policies. One of the issues Dreze and Sen use as an example of how India rapid economic growth is problematic is the countries lack to foster participation for economic growth. The lack of inclusion in economic growth leads to a wealth disparity between the citizens. The authors continue on depicting several other issues another one being the lack of enhancement to the standard of living despite generating economic growth from the use of public goods. The standards of living are a huge issue with India as it signals there is a large disparity within wealth. Dreze and Sen continue to document the lack of social and living standards especially in the case of education, medical care, and physical services like clean water, electricity, drainage, and sanitation. The authors proceed to make note how without a development of a social structure within India high economic growth can harm the citizens and ultimately neglect civil, political, and social rights. Dreze and Sen then

Globalization has been a major contributing factor in rising income and wealth inequalities in the United States. All the better paying skilled labor jobs are now being outsourced to cut costs, and as a result we are left with the highly skilled jobs, or the low skilled jobs. The highly skilled jobs usually require a bachelor's degree, and with the rising costs of education, this limits many people's opportunities. With these jobs more in demand, and less people able to afford degrees, these wages are increasing. Conversely, the lower skilled jobs now have more people competing because some people's skills have been outsourced, and they cannot afford to attend college to retrain.This, along with the unskilled nature of the work, will keep these

1. How do you define economic equality? For example, is economic equality simply making sure everyone has equal income, or is it enough to provide all equal opportunity to earn income?

Globalization is often cited as a harbinger of income equality. We are currently in the midst of what is known as Globalization 2.0 or the second wave of globalization. Globalization 2.0 has been occurring at much more massive scale than the first wave and at a much more rapid pace. That being said, official statistics show that income inequality has risen spectacularly as measured by official statistics, indicating a correlation between globalization and income inequality. However, there are strong arguments that the official statistics are not reflective of the entire truth of the matter. In a paper on inequality and prices, the authors

The sacred American tradition of free public education is in turmoil. The values, knowledge and creativity which forged America into the greatest nation of the world originated in the classroom. Classrooms which thrived in the past, are suffering in the present. Inequalities in the American education system are apparent and vivid; most prominent are those regarding income. Poverty’s relationship with education is parasitic, and the barrier its erecting between the student and the American dream grows every day. American’s must quickly agree upon a cure for this disease if America is to be a healthy and prosperous nation for the future.

Amartya Sen defines economic development in terms of personal freedom, freedom to choose from a range of options. While economic growth may lead to an increase in the purchasing power of people, if the country has a repressed economy, there is lack of choice and hence personal freedom in restricted. Hence once again growth has taken place without any development. While economic growth may result in an improvement in the standard of living of a relatively small proportion of the population whilst the majority of the population remains poor. It is how the economic growth is distributed amongst the population that determines the level of development.

This research also shows that economic growth, on average, raises incomes for both the rich and the poor. It helps to lift the poorest in society out of absolute poverty and does not automatically increase inequality. More importantly, no country has managed to lift itself out of poverty without integrating into the global economy.

countries and the future direction of change will have profound implications for poverty reduction by raising living standards throughout the world by giving poor countries access to overseas markets, enabling foreign investment and open borders. At the same time Stiglitz (2006) signifies that most successful developing countries, took advantage of globalisation to expand their exports and grew faster as a result. Because of that new jobs were created, and new enterprises were promoted.

Asia has also succeeded over the years to endure hasty economic growth and decrease deficiency in the region expressively. Nevertheless, this process has been escorted by enlarging salary gaps in many countries. Unfortunately with great growth comes great pain. Snowballing income unfairness destabilizes growth by diminishing comprehensive mandate because the ingesting tendency of top earning income groups is much inferior to those in middle and lower income classes. Hurried economic growth has also led to speedy urbanization in Asia, which presents both trials and opportunities for the region. Even if the economic reimbursements of urbanization outweigh its costs, the degree by which urbanization creates unsatisfactory circulation of net benefits which