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It is undeniable that during this age of globalization we are witnessing the relocation of manufacturing jobs away from the developed world to countries that pay substandard wages. First world poverty is being created in developed countries through unemployment, and through the lower relative wages paid to the less skilled, and hence widening the gap between wealth and poverty. Yet at the same time manufacturing jobs are being delivered to those in third world countries and according to proponents of globalisation such as Martin Wolf, and Peter Martin are supposedly closing the gap between concentrations of wealth and poverty. We have witnessed the rapid economic expansion of developing countries, seemingly through the implement of low-wages, which has apparently given them a comparative advantage in the world market place. However to describe this as a closing the gap between concentrations of wealth and poverty is to deny the fact that the wealth, whilst to some degree is being distributed, is still being distributed completely unevenly. If wealth was distributed equally, there would be unprecedented means of eliminating poverty within the world, and fulfilling the Declaration of Human Rights; "freedom from fear, freedom from want." Furthermore the gap can never be bridged as the capitalist system relies upon the ability to be able to exploit the least advantaged, in order to exist as it is. In other words, there can never be the wealth within the world, without poverty. The world has become a somewhat single, integrated economy, a world in which every country has become dependent upon the other. This notion of a single world economy was generally welcomed; many world leaders and economists lauded the idea of world trade growing faster than that of world GDP, the ever increasing amount of international currency transactions, and international direct investments surpassing those of direct domestic investments seemed a blessing. Globally the world has become linked, through the production of consumer goods which were once predominantly produced by the industrialised West and that have now spread to the periphery, workers companies and individual nation states have now become increasingly connected. This became none the more obvious during the Asian financial crisis of 1997, when "tiger economies" such as Indonesia and South Korea, seemingly collapsed. It led to massive unemployment and the displacement of millions of migrant workers. The effects included reduced welfare spending in apparently unconnected countries in Latin America, and a sudden rise in the cost of vital imports into Africa. Two problems are created through this globalisation of the economy. One that William Grieder labels the “global job auction” a world in which countries compete to provide the lowest-wage workforce and secondly the unemployment and lower wages this creates in the developed world, as companies clamber to find a market where they can pay sub-standard wages, and ultimately increase their already enormous profits. Economic globalisation coincides with unemployment and declining wages among the unskilled and semi-skilled workforce throughout the developed world. The demand for more skilled workers has grown in the advanced economies, shifting from that of the less skilled. This trend in the labour markets has resulted in dramatic rises in wage and income inequality, and unemployment among the less skilled workers in some countries. For example, between 1979 and 1988 the average wage of a college graduate in America rose by 20% in relation to that of a high school graduate. However the real wage, (that is the wage calculated in relation to inflation) indicates that the average wage in the US has only increased very slowly, whilst at the same the real wage of less skilled workers has actually fallen.
Approximate Word count = 2383
Approximate Pages = 9.5
(250 words per page double spaced)
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