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Globalization Impact on Socioeconomic Inequality
Introduction
The reduction in trade blockades has augmented globalization, leading to amplified international trade. As a result, individuals and organizations have become more interconnected and unified, leading to growth in trade and exchange of culture and values, among others. However, the spread of globalization has generated adverse effects such as increasing inequality (Ravallion 626). Ideally, inequality entails the unfair and imbalanced dissemination and allocation of opportunities and resources within the society. The paper analyzes the link between globalization and inequality and how the inequality problem can be mitigated.
The Link between Globalization and Inequality
The growth of globalization as necessitated by international collaboration, transportation, and modern technologies has increased inequality. One of the ways in which globalization upsurges inequality is the loss of jobs for low-skilled workers while creating a high demand and earnings for high-skilled employees. Globalization has forced foreign direct investment to shift to countries with the lowest production cost per unit, particularly low-income and developing countries (Baek and Shi 50). This implies that globalization moves low-skilled jobs from developed nations to developing nations. Therefore, individuals with low skills within developing countries attain more benefits due to augmented foreign investment (Ravallion 627). As a result, low-skilled employees within developed nations end up being at higher threat of joblessness and poverty, yielding low quality of life. However, the high-skilled workers within the high-income nations maintain their jobs despite the spread of globalization, which widens the inequality with jobless low-skilled workers.
Secondly, globalization intensifies inequality as it only benefits multinational organizations capable of managing the competitiveness level in the global market. Globalization helps multinational companies to maximize their profits, thus raising shareholders dividends and offering more generous financial rewards to executives (Ravallion 628). Consequently, the shareholders and executives acquire more financial bonuses while the employees fail to witness a significant change in their remunerations, which gradually augments inequality.
Unlike anti-globalists, pro-globalists hold that globalization reduces inequality, especially in developing nations, where low-skilled employees realize high employment levels due to increased industrialization. The high industrialization in the developing countries generates new jobs that perfectly fit the low-skilled workforce while reducing opportunities for high-skilled workers. The reduction in unemployment among the low-skilled workers helps decrease inequality with the high-skilled workforce in developing nations due to a surge in earnings (Baek and Shi 52). As a result, the low-skilled workers in the countries with low production costs attain higher earnings, which aids them in overcoming poverty.
Mitigating the Problem of Inequality
From a critical perspective, globalization generates more inequality within the society, which should be addressed by adopting suitable policy measures. A close analysis of the relationship between globalization and inequality reveals that globalization generates wealth and income inequality. Consequently, the policy measures should reduce the inequality gap between the poor and rich to create an equal society where individuals feel valued to avoid unnecessary conflicts and social classes. One of the policies is through redistribution by adopting a progressive tax system to ensure that the rich pay more taxes while supporting the poor (Ravallion 631). Government programs like TANF (Temporary Assistance for Needy Families) are normally introduced to help the poor to make sure that they gradually overcome poverty and engage in income-generating activities.
The second policy is adopting public initiatives that increase the opportunities ladder to all individuals. Offering equal opportunities through initiatives like better public institutions, refined daycare, internships, widespread grants and loans, skill advancement, and prohibition of employment discrimination allows individuals to achieve their anticipated economic positions in society. This helps reduce inequality within society by enabling people to accomplish their dreams. Thirdly, the adoption of strong employment policies can help mitigate inequality. Some of the fundamental employment policies entail robust minimum-wage regulations and reinforcing collective bargaining rights, which help protect the lowly-paid workers by ensuring they obtain better salaries and maintain job security (Ravallion 633). Lastly, the introduction of inheritance taxes limits the amount of wealth that kids can inherit from their parents to avoid widening inequality in society.
Feasibility of the Policy Recommendations
The policies are capable of providing realistic results to overcome the impacts of globalization on inequality. The focus on redistribution through government programs guarantees low-skilled employees obtain financial support after becoming jobless to engage in other income-creating activities. Increasing opportunities for all individuals ensures that they can easily advance their skills to get better jobs if they become unemployed. Strong employment policies focus on safeguarding employees to make sure that they do not easily lose their jobs or become subject to low wages (Ravallion 634). Additionally, inheritance taxes prevent affluent families children from inheriting large wealth levels to create a massive gap with those that do not acquire any inheritance.
Conclusion
The positive impacts brought about by globalization, especially on governments and organizations due to the reduction of trade obstacles, cannot be ignored. However, globalization increases inequality by causing joblessness to low-skilled workers in developed countries and unfair distribution of profits in multinational organizations, which creates the need for mitigation. The adoption of policies that revolve around creating robust employment policies, income redistribution, increasing opportunities for all individuals without discrimination, and adopting inheritance taxes can help alleviate inequality. Mitigating inequality creates a better society that supports people in achieving their goals to boost the quality of life and wellbeing.
Works Cited
Baek, Inmee, and Qichao Shi. Impact of Economic Globalization on Income Inequality: Developed Economies vs Emerging Economies. Global Economy Journal, vol. 16, no. 1, 2016, pp. 49-61.
Ravallion, Martin. Inequality and Globalization: A Review Essay. Journal of Economic Literature, vol. 56, no. 2, 2018, pp. 620-642.
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