Globalization Winners and Losers
Who has benefited most Globalization? Developed industrialized countries continue to benefit most from globalization because increasing globalization generates the largest GDP per capita gains for them in absolute terms. Did we really win?
The study shows that the richest one per cent of the population are the big winners in the changing global economy, increasing their share of income between 1990 and 2015, while at the other end of the scale, the bottom 40 per cent earned less than a quarter of income.
Globalization involves the increased integration and interdependence of the global economy. Since the 1960s, there has been an increased rate of globalization, which has been demonstrated by rising trade, rising exports as % of GDP, greater movement of labor and capital, and an increased interdependence of the global economy. Large corporations such as retailers and freight forwarders have benefited, Even home values increased as foreign investors cam in.
Globalization has benefitted some countries more than others. In particular, South East Asian countries, such as Vietnam, Korea and China have seen a growth in living standards due to their export boom.
In the developed world – the US, the UK and the Eurozone, globalization has been a mixed blessing with some sectors of the economy (e.g. service sector) experiencing rapid growth, but some unskilled workers have been left behind as former manufacturing sectors decline due to greater global competition.
That does not mean the everyone in the developed country benefited, there a large sector of small businesses that had to shut down as they could not compete in such a market. Have you ever wondered where you favorite mom and pop store is? Well, it just could not compete. Later on the large corporations raised their prices.
There were many losers especially in the less developed countries where some economists claim that poor people have benefited. If you look closely, you will see that in many poor countries workers are working under sub humane conditions, the one making the money are the elite in those countries not the people and off course the mega corporations.
We should also remember that pricing did not really come down with Globalization, because we buy more things does not mean we need them. The prices of essential items did not really go down, just check your nearest supermarket.
And we should no forget about shipping costs. Freight rates have increased and do contribute to price increases. It is just not worth it anymore to invest in foreign countries. The problem we are facing now is that if we decide to bring manufacturing back, we need to wait few years for the factories to start producing.
In my opinion, globalization might have served a purpose in the beginning but just like every other policy, it lacked oversight. Some may have benefited but in the long we paid a a hefty price when it comes to our values and beliefs. The normal hard working people have lost.
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