Globalization Hurts the World's Poor

From the American average level, globalization is a favorable situation for all participants. But we have not seen the other end of the situation, lower families around the world are faced with problems. In countries such as Indonesia and India, US companies deliberately set up factories and use their population to produce their products by providing wages below the minimum wage. Families were forced to send their children to work at these factories to earn enough money to survive.

Indeed, those living in about 80% of the world's income (poor and middle class in developed countries) have hardly earned real income from globalization. At the same time, the world elite continues to make substantial progress, the world's poorest people are not seeing any growth at all. Obviously, the benefits of economic change do not extend equally to everyone. However, globalization is only one factor in this unequal distribution. These figures also reflect trends in the second half of the 20th century, such as the collapse of the Soviet Union and stagnation of the Japanese economy. These events have contributed to low income growth in the middle class of the world, but they are not directly related to globalization. Other factors, such as new technology, unequal education, deregulation, various social welfare policies, can also help explain these trends.

Does globalization help spread dissemination of wealth, as its supporters assert? Or, as critics appealed, will globalization hurt poor people? In a new book called globalization and poverty edited by NBER researcher Ann Harrison, 15 economists considered these and other problems. Harrison summarized many book findings in "Globalization and Poverty" (NBER Working Paper No. 12347). Her main conclusion is that if the appropriate supplementary policies and institutions are in place, the poor will certainly benefit from globalization.