Poverty and income inequality are issues affecting a majority of people around the different parts of the globe. These issues exist and are increasingly becoming a major concern in both developing and developed countries. The purpose of this paper is to show some of the causes and effects of income inequality and poverty in developing and developed countries. Income inequality varies especially by region, education and social standing and hence increasingly widening for so many years. In addition, a large group of people in the world have the inability to access high quality education, shelter, food, clothing and basic medicine. Business activities are an important factor in the economy and have the ability to aid in eradicating poverty through …show more content…
Businesses are highly competing for low wage markets in developing countries in other words “a race to the bottom” (Chan, 2003, p.46). In fact, globalization enables firms in developed countries to outsource most of the work to developing countries to minimize costs and reduce prices for the production of goods and services in order to have a competitive edge in the market. For example, Old Navy has some of its clothing manufactured in India. Large quantities of products and services are produced exposing businesses to greater profit margins through exploitation increasing the wage and income gap between workers in developed countries and developing countries. For this reason, the standard of living in countries like India is lower to the living standards of households in Canada. The low legal requirements in the cheap labor markets such as India intensifies the poverty line within these countries since individuals are unable to sustain business cycles like the recession. On the hand, workers in developed countries are left unemployed due to job outsourcing transforming middle class individuals to become …show more content…
The need to have high level degrees to take up high positions such as Chief Executive Officer jobs promotes education in a way that, students desire to have these high payment jobs. Competition for these high positions leads to high supply of job qualifications and low demand for high skilled workers. This further leads to unemployment of high skilled workers and in turn income inequality due to no earnings by the unemployed workers. Besides, enhancing quality education, individuals with lack of opportunity to have education or low levels of education, are excluded from top positions in companies and end up with low paying jobs like in retail and blue-collar jobs. Additionally, students graduate from programs without having work experience in their career jobs, putting them in a disadvantage during job hunting. Schools like Asper School of Business in the University of Manitoba now offer Co-op programs to give opportunity to students to acquire work experience in the desired fields of
Large corporations such as Nike, Gap, and Reebok and many others from the United States have moved their factories to undeveloped nations; barely pay their employees enough to live on. Countries such as China, Indonesia, and Haiti have readily abundant cheap labor. There should be labor laws or an obligation of respecting workers to provide decent working conditions, fair wages, and safety standards.
Looking at today's society, there is a lot of exploitation and hegemony among certain groups. Major global conglomerates exploit the people of many poorer countries for cheap labor. To the people overseas, they are receiving wages that are fairly high for their standards. As for the companies, they are making a lot of money due to cheap labor cost.
Many businesses hire low skilled workers for low wage, but many Americans are not willing to work for low wage. Moreover, many businesses want to keep their costs in a very low price, to achieve the high profit margin. They get their employees from other countries and moving production over the world. Many workers in the United States come from halfway across the world. Low-paid workers are used to produce and export raw material. Companies use cheap raw materials to produce products and invest to other countries with high profits. “People in the south still produced items for export to north--but now they export manufactured food as well as raw materials” (Chomsky 5). The New England was the first one to try out with new business in the U.S. southeast in the beginning of 21th century to find lower cost. “The New England textile industry was one of the first to experiment with plant relocation, shifting its production to the U.S southeast starting at the very beginning of twentieth century in search of lower costs” (Chomsky 5). The relocation program was very successful by the end of the
According to Schwartz-Nobel, America will lose as much as 130 billion in future productive capacity for every year that 14.5 American children continue to live in poverty (Koppelman and Goodhart, 2007). Sadly the seriousness of poverty is still often clouded by myths and misunderstandings by society at large. This essay studies the issue of poverty and classism in today's society.
These workers, like many presented and interviewed in The End of Poverty?, must sell raw materials, and purchase finished products at higher prices, creating a trade imbalance, and requiring these countries to borrow money, furthering their debt. They then have to spend their tax dollars on debt and interest instead of health care or, more importantly, education. Low wage jobs are provided by the core, but the profits always go back to the core, and are never reinvested in periphery.
Income inequality has affected American citizens ever since the American Dream came to existence. The American Dream is centered around the concept of working hard and earning enough money to support a family, own a home, send children to college, and invest for retirement. Economic gains in income are one of the only possible ways to achieve enough wealth to fulfill the dream. Unfortunately, many people cannot achieve this dream due to low income. Income inequality refers to the uneven distribution of income and wealth between the social classes of American citizens. The United States has often experienced a rise in inequality as the rich become richer and the poor become poorer, increasing the unstable gap between the two classes. The income gap in America has been increasing steadily since the late 1970’s, and has now reached historic highs not seen since the 1920’s (Desilver). UC Berkeley economics professor, Emmanuel Saez conducted extensive research on past and present income inequality statistics and published them in his report “Striking it Richer.” Saez claims that changes in technology, tax policies, labor unions, corporate benefits, and social norms have caused income inequality. He stands to advocate a change in American economic policies that will help close this inequality gap and considers institutional and tax reforms that should be developed to counter it. Although Saez’s provides legitimate causes of income inequality, I highly disagree with the thought of making changes to end income inequality. In any diverse economic environment, income inequality will exist due to the rise of some economically successful people and the further development of factors that push people into poverty. I believe income inequality e...
...every corner of the globe. When those low costs occur as a result of inferior, and even illegal, working conditions, then sweatshops are a major global problem. A possible solution would be to change, or at least modify, the conditions under which sweatshops continue to function. Universal workers rights, with minimum age and minimum wages could be a solution. Still, certain countries will always have the advantage of low cost labor and will exploit that advantage in the international marketplace. However, the disparity between the great differences in labor cost can be lessened, but it can best be done by continuing to promote world free trade and continuing to improve the quality of life in developing nations, where low cost labor is most abundant.
Surviving in America has become increasingly more difficult due to the Government’s lack of oversight which causes the income gap to increase and the middle class to disappear. Due to an extreme gap of income between the wealthiest 1% and the remaining 99% in America, the middle class is dissipating to nothing because of unequal distribution of wealth. Poverty in America is a major issue that can and should be addressed as soon as possible because unequal distribution of wealth is causing greed, controversy and hate among millions of citizens. Although an income gap can be very inherent in capitalism, the Government should do more to help combat income inequality and unequal distribution of wealth because it takes advantage of the public and completely dissolving the middle class.
Poverty is defined as the state of being inferior in quality or insufficient in amount. According to this definition, it is appropriate to view capitalism as a socially harmonious economic system in which unemployment, poverty, and inequality are the fault of the individual. Poverty or being poor along with being rich is a state of mind in which capitalism has no affect on. Those who are poor by American terms do not see themselves as being poor. They may only begin to “feel” poor when they are told that they are poor. This action changes their state of mind and alters their view on living.
The economies of businesses that use cheap labor in other countries as a “business strategy” acquire most of the benefits while causing more harm than good to the countries where cheap labor is permitted. Cheap labor may have its advantages in the short term for the country, which is livelihood for their communities, but in the long run, it severely limits the progress of the workforce. As workers acquire small incomes, they do not get the opportunity to acquire things that are likely to improve their livelihood and remove themselves from poverty such as further education for themselves and/or their children (Munger, 2002, p. 227 ). There is a heavy dependence on foreign investment in the cheap labor force and this creates a further imbalance and a growing wage gap. If a large proportion of the population is unable to acquire the means for a decent quality of life this decreases the purchasing power of the population, stagnating the local economic growth, as people are not able to purchase goods and infuse the local market with funds thereby stagnating local businesses. An ec...
Inequality has different causes and presents itself in various forms. One form, social inequality, is inequality in opportunities and benefits due to belonging to a certain social group. These inequalities could include exclusion from decent education, housing, healthcare, or respect. Oftentimes, these groups are excluded for reasons that they cannot control. Some examples include race, religion, gender, sexuality, and class. These factors come together to create a person’s identity, and this is why social inequality is a difficult challenge to escape.
bowl of rice in a society where all other people have half a bowl may
Everyday people within our country face conflict based on their social class. It is always a story of one getting unequal wages and working conditions, favoritism, and many other inequities based on social class. It may seem like a little problem, but this dispute is like a disease and can spread throughout history. People’s life chances and opportunities are decreasing as class discrimination takes place. America is known as the land full of opportunities which is why many individuals migrate here hoping to achieve the American dream. However, economy is only fair to the majorities and leaves the minorities to suffer the inequality and lower socioeconomic statuses which affects their social mobility. Therefore, due to the nature of capitalism
In quest of finding an inclusive solution to poverty, it is compulsory to primarily identify the causes. Ahead of all the causes of poverty comes the unequal sharing of resources. In most countries, about 20% of the population control most lands and wealth, while the remaining 80% get very little resources that don’t fulfil their requirements. Another chief cause of poverty is adolescent birth. Based on various studies, girls’ lack of education leads to higher adolescent birth rates. This in turn over-burdens an already economically strained community, aggravating the situation. A third cause of poverty is the low wages, verses increasing prices of living supplies. As a result, the middle class is disappearing in most developing countries, and adding up to the poorer population. Millions of people live with hunger because they simply cannot afford to buy food (Jackley). Poverty will continue to have more and more causes if no...
Cheap Labour and Poor Working Conditions: Who Really Is To blame?" New Anthropocene. N.p., n.d. Web. 14 Jan. 2014.