Dealing with Global Inequity
We will follow the same format as previously. Group I is a taskforce appointed by the World Economic Forum and Group II is a taskforce appointed by World Social Forum to address one of the most important consequences of Globalization -- the growing gap between the rich and the poor. Group I will assess if there is indeed a growing problem on inequity and develop a plan to address the gap without slowing the progress of economic globalization and international trade. Group II will explore the darkside of globalization and determine if globalization needs to be fought, challenged in order to fight global inequity. both groups should identify the core causes for the problem, come up with the objectives for their plan, the strategy to achieve it and the plan on how to get resources to achieve their goals.
Tom Lewis on inequity.
L. Strope on inequity.
On the global level.
Income inequality.
See power point presentation on the topic.
22 Comments:
After reading the articles that discuss the growing divide between the “super rich” and rest of America, as well as the articles that discuss increasing inequality on a global level, I wonder why there are no articles posted that show the other point of view; The point of view that everyone in America is experiencing increasing wealth. I would be curious to see the arguments that the other side, the conservative side, proposes (if they propose anything at all). However, I do believe that the growing divide between the richest Americans and the poorest Americans exists, as well as the growing divide between nations. As far as America is concerned, I believe that I can account for one of the main reasons for this increasing inequality. My answer is RELIGION and Roe v. Wade. Republicans have been able to secure votes in the bible belt of America as well as in Middle America because there is a large presence of extremely religious activist who strongly support faith based initiatives and the repeal of the Roe decisions. These “conservative” Americans are willing to vote for Republicans against their own economic interests because Religion is the most important thing in their lives and is valued more than money. Republican policy does not appeal to the majority of Americans, but their focus on Religion allows them to secure votes. If there is one thing that I wish I could make every American understand it is that everyone can practice their faith without having it in government and imposing it on others. This would make life in American so much better for everyone.
I found Tom Lewis’s mention of dramatic state budget cuts particularly interesting due to both its direct and indirect effects on American inequity. Economic, cultural, social, and educational inequity is all bound together in a circuitous and dangerous maze.
The obvious effect of economic inequity on social and educational balance is exemplified in New Jersey Governor Jon Corzine’s recent proposal to cut state funding to colleges and universities by an unprecedented $169 million. Under the plan, funding to certain state schools will be drastically reduced by 15%. The perils of this are sobering. As endowments decline and budgets are cut, tuition will undoubtedly rise and aid packages will grow thinner. As it becomes more difficult for parents and students to pay for college, the inequity of New Jersey and the US as a whole will only grow. The college education of students from under privileged and modest income backgrounds is not valued in the state of New Jersey under Corzine’s budget cuts. Equality in educational opportunity is imperative in order to maintain the current levels of enrollment, and prevent a further slip into social, cultural, and educational inequity.
The indirect effects of this also deserve equal attention. As dramatic state budget cuts gravely affect public education in primary and secondary schools around the country, the programs first to be cut are those deemed “unnecessary” such as the fine arts. These shared humanities; music, art, theater, and dance are the strings that bind our nation together amidst current economic inequity. Without a shared appreciation for these arts creating a remotely balanced culture, the single layered monetary inequity that already plagues the United States could spiral into a grave state of imbalance. A greater disparity between the classes could emerge. The resulting social and political consequences could be fatal to the shared vitality of the American spirit that binds the people of the United States together as a nation.
While reading Tom Lewis' article I was struck by the extreme amount of liberal propagandist crap spread through the entire article. The jobs in this country, along with those in other countries, that pay well tend to pay well because they are jobs that require skill or fulfill some need as described by the people. As long as Lewis was criticizing the republican business owners that make large profits, why not also throw in the liberal celebrities and athletes that make more than most business owners.
Now that that basis of the article is covered Ill cover the more meaningful part of it. Perhaps one of the major problems introduced in the article but not discussed is the poverty levels in this country. In my opinion, these poverty levels would be much less if people were more concerned about helping the poor in our own country. There is a push among the celebrity faction to send money out of the country to help the poor people elsewhere. Had the same attempts to help Americans been done, some of the lives lost in New Orleans could have been saved by decreasing the poverty in the region. The way to help this country's poor is to gather donations from people that can afford to give them. The often discussed redistribution of wealth method simply punishes those people that work hard enough to earn more money. For those people that believe wealth redistribution works, look at any communist country. There is no incentive to learn more ot to become better at your job since there is no room for growth. If people went to school and worked harder I firmly believe that they will prosper in life.
I wouldn't say that athletes and movie stars "go to school and work hard to get more money." Instead, they reel in huge sums of money, mainly because average people worship them as being better people. They are able to make 7 figure salaries only because people are willing to pay $100 for a concert or a sporting event. Our nation's culture revolves so strongly around culture that more people can identify the 5 Simpson's characters than the 5 freedoms provided in the first amendment...
Rather sad article here .
Things like this make it easier to understand why celebrities live so well compared to some Americans. These celebrities have no need to make donations because quite frankly, they already have achieved worship status, so why would they give a large donation? Celebrities could satisfy their conscience (assuming they have one) by making a donation that has no bearing on their quality of life. Therefore, collecting donations from those who are able to give them will not entirely solve the problem.
Although the US does face inequality and poverty I think it goes a little too far to compare the poverty in the US to the poverty in the Third World. Although many Americans could benefit from more money and services, I believe people in other countries in greater poverty could benefit much more. Futher, there are a good amount of celebrities that legitimately believe in the cause that they donate to and have some sort of personal connection to the cause, rather than willy-nilly picking any old charity to donate to. Given this, it would be great if more celebrities supported more causes, however it should not be their duty. Yes they make a ridiculous amount of money, but as Will mentioned it is because people pay to see them and their products. Their exorbitant salaries are a function of society's demand for them. It would be great if the poverty in the US and around the world could be remedied, but that would likely take great sacrifice from the majority of people not in poverty and seems to be a huge undertaking that has yet to be successfully approached.
Tom Lewis obviously likes to rant.
Using not–so–subtle techniques like the collective “we” throughout his essay, Lewis hopes to persuade his readers to join him in the fight “for a socialist system that puts the needs of ordinary people ahead of corporate profits.” Let’s see (literally) how so–called centralized ownership of plays out in practice.
This is a short BBC report in pictures: http://news.bbc.co.uk/1/shared/spl/hi/picture_gallery/04/asia_pac_china0s_wealth_gap/html/1.stm
Something in their eyes tells me these individuals may not agree with Lewis’ tirade.
Just in case anyone is interested the UN slideshow presentation that was used today can be found at www.gapminder.org. There are 9 shows: world income distribution, regional income distribution, the distribution of poverty, regional differences in health and income, income and health of countries, same income - different health, development directions, differences within countries, and child deaths - the cumulative human cost of missing targets. This slideshow is very good in illustrating the changing face of poverty and the current trends. It also shows the different paths countries have taken in both income and health from 1970 until the present. Using child mortality rates, it also shows a relationship between better health and higher GDP of nations. However, it shows the quintiles of incomes of various countries and the wide disparities between them, therefore illustrating how countries can be more different internally than they are from other countries. There is more to learn from the slideshow, but these are some of the main points.
The topic of “Washington consensus” discussed today in class interested me. A speech by John Williamson explains the topic a little more in depth.
http://www.iie.com/publications/papers/paper.cfm?ResearchID=488
Williamson offers a very interesting perspective on the proposed failure of the Washington Consensus. He also relates the idea to current times, such as the election of President Lula of Brazil, who endorsed many of the policies of the Washington Consensus in order to get himself elected.
Williamson proposes three main reasons that he believes explain the disappointing performances that many countries experienced following the adoption of the Washington Consensus. The first is the chain of crises that many of the rising markets suffered. He admits that the consensus did not prioritize the avoidance of such occurrences. Yet he defends this with the fact that crisis avoidance was not an urgent topic during the late 1980’s when the policy was being adopted.
The second reason is that reforms were incomplete. He states that “first-generation” reforms (such as the labor market that remained dualistic it many places) were neglected or incomplete. Also, “second-generation” reforms (i.e. strengthening of institutions) were neglected, which caused a stagnation of the “first-generation” reforms as well.
His third point in reasoning regards the narrow objectives of the Washington Consensus. He exemplifies this point with the past and existing focus placed on growth and utter disregard for worsening income distribution. The UN graphic presentation presented by Group 1 today was a blatant example of this fact.
Williamson offers an interesting outlook…take a look at it.
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I agree with Diane Randolph's assessment that it goes a little too far to compare the poverty in the US to the poverty in the Third World. Even some of the poorest citizens of the US have opportunities that those of some of the developing nations would dream to have. However, just to be clear, that is not to say that the wage gap in the US should not be addressed.
While discussing possible solutions as the World Economic Forum for our presentation, one of the key contributors to the continuence of global inequality is the presence of corruption and greed in a lot of these nations. Although it is true that institutions such as the World Bank and International Monetary Fund probably need to be reformed, no amount of reforms will make a difference if the aid given never reaches its intended demographic.
There are two interesting articles that demonstrate the effects of corruption on developing nations.
http://www.brookings.edu/views/speeches/wei/20030312.htm
http://www.andover.edu/aep/papers/410/hhusain99.pdf
Pride and greed aren't included in the seven deadly sins for no reason. They lead to corruption, especially among those in a position of authority and power. Organizations and institutions need to be put into place to make these leaders accountable for their ignorance of the citizens they preside over. The elimination of corruption needs to be the foundation upon which aid to developing countries is laid on. Once corruption has been addressed, then one can be sure that the money given is helping the intended people.
I noticed that Strope's article mentioned a few times that one of the big causes for job-loss and the resulting inequity in the US is the outsourcing of jobs to other countries. I found it interesting how the inequity in poorer countries is also being increased by this process - but in a different way.
While outsourcing increases American inequity by taking away jobs, it is actually hurting other countries by giving them jobs (because of poor conditions, wages, and lack of regulation).
This demonstrates how the "race to the bottom" is hurting both sides and why something should be done.
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"In their 1992 campaign for the White House, Bill Clinton and Al Gore liked to point out that the top 1 percent of Americans owned 40 percent of the country’s wealth. They also said that if you eliminated home ownership and only counted businesses, factories and offices, then the top 1 percent owned 90 per cent of all wealth. And the top 10 percent, they said, owned 99 percent!"
This statistic really shows how unequal wealth distribution is... How is a system fair when one percent controls ninety percent of all the wealth generating mechanisms? The workers literally own nothing besides a postage stamp sized property and the four walls and a roof which protects them from the elements. They buy countless toys to keep themselves entertained and in an attempt to give their life some meaning, and also it keeps them distracted from thinking about why a small elite should live an extravagant lifestyle while the majority face financial difficulties every day. The majority fail to realize that by working for a wage and reconciling yourself to be a mere human tool in someone else's plan, you further cement the separation of the wealthy and the mediocre, the haves and the have nots. Instead of investing into stocks, business ventures, property, or any potentially appreciating assets, people invest in ipods, fancy cars, plasma tv's, and other depreciating goods. When our culture can change the materialistic consumption attitude that most members have (which the owners love to see) only then will we be able to move forward and achieve more wealth equality.
"If people went to school and worked harder I firmly believe that they will prosper in life. "
It sounds like you firmly belive in individual choice. But what is individual choice? When did you make the decision that you would work hard as oppossed to being lazy? People rarely turn from being lazy to intensely productive, a slob to a neat freak, or any other dichotomy, because these are learned actions, not a choice as simple as wearing a red or blue tshirt. Think about it; your work ethic is a product of your upbringing. Thousands of factors shaped you to make you into the human being you are right now, one that is free from life threatening disease, has access to an education, has the funds to pay for the education, has the motivation and drive to 'achieve' high marks, and was born into a priviliged portion of humankind, etc etc etc. The lack of any one of those factors could lead your life down a completely different path, one probably 'less prosperous'.
Also, the ones who are truly prosperous probably dont work harder than say, the average manual laborer. Let's use a Mexican tomato picker for example. I think he would work much harder than a upper level manager in a major corporation yet one's life is full of luxury, comfort, and privilege while the other's is full of blisters, fatigue, and poor treatment. But surely this is due to the Mexican's lack of initiative to get a proper education...
For a multitude of perspectives, check out this book, The Working Poor: Invisible in America, it goes in depth on the lives of many who are unable to make it in our system.
For the discussion of American poverty I found this somewhat interesting. It breaks up income into income quintiles, ethnicity, industry sector, etc. and tells us basically what we already know. For instance, the richest 20% have a higher percentage of home ownership, pay more for food, entertainment, autos, etc, than the lowest 20%. It also points out that the lowest 40% of Americans' income before taxes is LESS than their expenditures. (See Page 8/20). This basically results in the poorest of Americans digging deep holes of debt for themselves.
Additionally, if you are to look at the chart based on employment sector, it shows that the average of each sector has more income than expenditures. This is evidence of the drastic difference between the higher and lower income households in the US.
“If people went to school and worked harder I firmly believe that they will prosper in life.”
Stefan already made some good points about the inaccuracy of this statement, but I wanted to bring up some things too. Certainly people who work hard get benefits from doing so. Perhaps they are more likely to get promotions, get more business, work longer hours so they make more money, expand their companies, etc. However, merely saying that people will prosper if they work hard is completely ignorant and untrue. That is implying that every person who is not prosperous does not work hard, and that it is their own fault they are in poverty. This is sometimes the case. However, poverty is a cycle that is difficult and sometimes impossible to break out of.
First of all, not just anyone that wants to can go to school and get a good education. College is expensive, and even with financial aid and community colleges some people simply do not have the economic means to go. Even if they work hard to get a scholarship, many people have to work to make money, have a family, and don’t have time to attend classes.
Another example of how it can be impossible to break out of the poverty cycle is that there is a part of the welfare system that actually causes an incentive not to work harder. The size of people’s welfare check depends on their wage. Many people on welfare are poor single mothers, and even with welfare they are barely making ends meet, or not making them meet at all. If they work harder and get a raise, or get additional education and get a higher paying job, a proportionately larger amount than their additional income is taken out of their welfare check. They become worse off than they were before. This particular phenomenon might not affect a huge percentage of citizens since you can only be on welfare for 5 years, but it shows how poverty is a cycle which cannot always be broken out of simply by working harder.
In chapter 21 of The Globalization Reader, David Dollar and Aart Kraay assert that the popular notion that globalization has caused widening gaps between the have and have nots is incorrect. I disagree with their conclusions. The authors of the article claim that globalization has actually promoted economic equality between nations and reduced poverty among individuals. Dollar and Kraay describe a long term trend toward inequality that had been occurring for 200 years and finally stabilized in 1975. Since then, the authors feel that the trend toward inequality is actually reversing. They say that this reversal of inequality is spurred by two of the most rapidly growing countries, India and China.
The authors of the article go on to explain that globalization actually causes increased investment and faster growth of developing countries. They show that globalizing countries have grown much faster than non-globalizing countries due to increased investment. They claim that non-globalizing countries are even declining due to inward looking trade policies. Dollar and Kraay state that inequality is not caused by globalization. In fact, in some countries like China, inequality decreased while in others (the Philippines who do not promote globalization) inequality has increased. The authors attribute inequality gaps to domestic policies including taxes, education, and social policy. They assert that while we might see a small increase in general inequality, the number of poor people has declined by 200 million, especially due to growth in China and India where 60% of the world’s poorest people reside. Therefore, while we might see increases in inequality, poor people are still benefiting from globalization.
I disagree with the assertions made by the author. I feel that the author should have excluded China and India from his mathematical findings because they skew the numbers and show a very different global landscape than what is occurring in most developing nations. The authors rely too heavily on what is occurring in these countries to reflect the entire globe. This is erroneous. Also, the authors concede that there is an increasing inequality among individuals. However, they point that the income of the poor is increasing. I ask, how does it benefit the impoverished people in the world if their daily income increases from $1 to $1.50 per day if the richer people are increasing their wealth by millions upon millions of dollars?
In reading Tom Lewis’s article, The Growing Gap between the Rich and the Poor, one can really observe how dire and imbalanced our domestic economic situation has progressively become. The gap between the salaries of the rich (i.e. CEOs, at the top 100 U.S. corporations, with a median salary of $33.4 million) and the poor, within our own country is astonishing. The article noted that “the 13,000 richest families in the U.S. now have almost as much income as the 20 million poorest,” demonstrating the extreme extent of the continuously growing fissure in the distribution of our nation’s income.
Lewis, criticizing Democrats and Republicans alike, accused the past four U.S. presidents with making such empty promises of “peace dividends,” “managed care” systems that would control costs and save money for ordinary people, higher teacher pay, secure pensions, revitalized cities, etc. But, instead they have been too concerned with enforcing a U.S. Imperialistic policy across the globe, in hopes that “Corporate America’s exploitation of workers in the economically less developed countries [would] maintain and improve living standards [in the U.S.].” But, instead of improving economic conditions for all U.S. residents, via the trickle-down effect, from “U.S. corporations extract[ing] huge profits from almost every corner of the world in the 1990s],” this strategy only succeeded in making the rich richer and poor poorer.
I agree with Lewis’ assertion that the U.S. government has been too concerned with advancing their military prowess, over the past 2 or 3 decades, rather than concentrating on decreasing our nation’s huge deficit in order to improve employment, pension plans, health care, and the overall standard of living. But, at the same time, it is also very important for the U.S. to maintain an effective foreign policy and continue to work together with other countries in order to promote peaceful relations and global governance.
Global inequity is the biggest problem facing the debate of globalization. Even those who point to the class of civilizations cannot deny that at the most basic level, terrorism for example, can be largely solved through distributing wealth more evenly. Regionally, the most downtrodden (Middle East, Africa) produce the most violence (Darfur, Islamic Terrorism). Moreover, the argument that the 9/11 terrorists par example were affluent is negligble. They were definately outliers, as the bulk of Al Qaedas recruitment comes from the poverty stricken and opportunity starved. Decreasing global inequity will also increase funding towards education, which is vital in our world. As literacy rates climb, so too does the demand for knowledge as a form of capital. As a note: I agree with Nicole's assesment of Governorn John Corzine's plan to cut educational funding. College education is vital to success in the U.S. these days. Manufacturing jobs dwindle, white collar jobs replacing them. As a New Jersey native, I find his policies troubling.
I thought that Michael’s discussion on Article 21 in the globalization reader was interesting because it brings to light many of the issues that the world is facing today in the face of globalization. I agree with him that Article 21 has some major flaws, including its argument that the economic growth of a country is the best way to reduce poverty. Article 21 is called “Growth is Good for the Poor,” but Article 22 is called “Growth with Equity is Good for the Poor” and is a critique of the previous article. This article talks about how growth is necessary, but only with an increase in equity also will it be effective in reducing the level of poverty.
Some people would argue that although there is a growing inequality gap, it does not matter since everyone is better off. For instance, in many places all incomes are rising, but the rich are receiving proportionately more increase which is the cause for the growing gap. Some would say it does not matter that the gap is growing, since everyone is better off. This argument would cite information like Article 21 did, like there are 200 million less poor people in the world. However, there is a lot of evidence that shows that the inequality gap is also a huge problem. Article 22 says that countries with a more equal distribution of wealth are more efficient in terms of reducing poverty. A country that has more equality will see a larger turnout in poverty reduction for the same amount of economic growth. Also, income gaps discourage investment and hinder the creation of new markets. The article says that an example of this is in Latin America, which has seen steady economic growth but has also seen little advancement in poverty reduction. In Mexico, the poorest 20% had 3.5% of income, while the richest 20% had 57.4%. An even more dismal picture is seen in statistics from the World Factbook that show that the poorest 10% have only 1.6% of income, while the richest 10% have 35.6% (http://www.cia.gov/cia/publications/factbook/geos/mx.html).
As Latin America has opened up to free trade, it has seen increased investment, exporting, and economic growth. However, it is estimated that from 1980 to 1990, the number of people in Latin America living in poverty actually increased by 66 million (Keen and Hayes). This touches on one of Michael’s points, that although the overall number of poor people in the world has decreased, this may be due to India and China’s statistics, and some regions such as Latin America have seen increased poverty. On the website “Gap Between Rich and Poor: World Income Inequality,” it shows inequality statistics for the poorest and richest 20% of different countries.
This is caused by both globalization and weak domestic programs. Globalization has brought increased opportunities to these countries, as can be seen by their growing GDPs. However, only certain sectors have seen growth, while others have declined. For example, in Mexico the manufacturing sector has benefited greatly and the agricultural sector has been hurt, pushing many farmers in poverty. However, this is largely due to inadequate land protection by the government, weak legal systems, and US farm subsidies which unfairly distort the price of agricultural products. Also, lack of a strong educational system prevents people from moving into high-productivity jobs. Therefore, if domestic reforms were stronger and subsidies were eliminated, the benefits of globalization would be able to be felt by many more people.
I found the last section of Tom Lewis’ article entitled “Do American Workers Benefit from U.S. Imperialism?” very interesting. I have never thought of U.S. imperialism in this way. Lewis believes that Americans wish to spread their “‘free trade’ ideology” so that the U.S. will benefit economically through “exploitation of workers in the economically less developed countries.” It is quite obvious that large corporations have purely economic intentions when they export their labor out of the country to these less developed countries.
However, Lewis uses the history of U.S. invasion as part of this same argument. He refers to such events as the current invasion of Iraq, claiming that the aim of these invasions is to spread capitalism. He states that Americans hope they will reap the benefits of a global spread of capitalism by means of the trickle-down effect. In light of our in-class discussions about religion and politics, Lewis’ view of the goals of U.S. imperialism is overly simplified. U.S. imperialism encompasses more than the spread of capitalism; U.S. imperialism spreads values that are deeply embedded in American society. This is extremely apparent when observing Bush’s strategy for dealing with Iraq. In his speeches lies an underlying tone that Americans have a divine mission to spread Christianity. This belief does not merely belong to Bush; it also belongs to many Christians in America, many of whom voted for Bush based upon his religious beliefs.
Thus, U.S. imperialism is more complex than the mere spread of capitalism. The U.S. president, along with many American citizens, sees imperialism as a means to spread the ideals of Christianity and other American beliefs. Although the growing deficit and the growing gap between America’s rich and poor are unfortunate circumstances, U.S. imperialism has less to do with these economic conditions than Tom Lewis thinks.
After reading these articles about growing inequality in America and throughout the world, I was very interested to know the other side of the argument. I found an article in The Globalization Reader entitled “Growth is Good for the Poor.” The articles states that the trend towards inequality peaked in 1975 and that it has since then “stabilized and possibly even reversed.” The concept of inequality is difficult to define, especially when comparing different countries, and this allows different scholars to manipulate statistics to support their own ideas. The authors this article, Dollar and Kraay, obviously use different statistics when addressing inequality than scholars who state that inequality is increasing on a global scale.
Dollar and Kraay claim that the developing world can be divided into two categories: the “globalizing” countries and “nonglobalizing” countries. The globalizing countries, such as China and India, are experiencing rapid economic growth through trade and foreign investment. On the other hand, the nonglobalizing countries trade less today than they have in the past. Thus, the authors are essentially using the word “globalizing” to represent economic development and “nonglobalizing” to represent the opposite. As we have seen time and time again in class, however, globalization has its advantages and disadvantages. Dollar and Kraay merely view globalization is a positive light, and they attempt to lump the negative implications of globalization in an entirely separate category. Globalization affects even the poorest countries; among other things, it has led to the privatization of public services and has led to attempts to deregulate labor markets in developing countries. After our discussions in class and after reading this essay, I have yet to be convinced that there is no growing gap between the rich and the poor as a result of globalization.
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