Globalization On Poverty And Inequality

Oxfam (2016) reported that the 62 richest individuals have as much wealth as the poorest half of humanity. The report indicated that the gap between rich and poor had reached the new extreme and the eradication of poverty across the globe would remain struggled due to the inequality crisis. After this report was released, there were more concerns about the impact of globalization on poverty and inequality. Many people believe that globalization makes the developing countries facing the risk of increasing poverty and inequality, but this essay supports the opposite. Globalization would not increase the poverty and inequality in developing countries because of the deep-rooted nature of inequality and poverty, its positive impact on the reducing …show more content…
The rate of children participation in the labor force could be considered as a measure of inequality and poverty. As Lindert and Williamson (2003) argued that trade openness could lead to higher income per capita and if the income is large enough then parents will have less incentive for sending their children to work. In addition, globalization brings foreign direct investment to developing countries that will lead to new legal frameworks that prevent children from participate in the labor force. Although cheap labor is one of the advantages of developing countries, foreign investors tend to prefer the skilled labor to the unskilled one, including child labor (Neumayer & De Soysa, 2005). As a consequence, children are expected to study in order to obtain a good job in the future rather than dropping out from school to join the work force. The higher level of globalization will results in stronger effects of income and foreign direct investment on reducing child …show more content…
However, at high level of globalization, un-skilled labor, including child labor, is rarely used in imports and exports sectors. Additionally, globalization has increased the human living standard all over the world regardless the larger gap between rich and poor.
In conclusion, globalization does not increase the poverty and inequality in developing countries because poverty and inequality are natural, moreover, globalization helps reducing the incidence of child labor, and promoting redistribution of the wealth through tax coordination. As globalization is an irreversible trend and has positive impact on the fight against poverty and inequality, governments should take it as a potential opportunity in addressing the race to the