María Gabriela Cisneros Bonilla

Globalization and its relation to inequality

Technological advances, the ability to communicate quickly and the possibility of obtaining
products from the other side of the world are just some of the advantages we have thanks to
globalization. However, a process that impacts so many areas and involves so many factors
also have its negative aspects, mainly recognizing an economic and social gap between the
countries and communities that have benefited and those that have been exploited to take
advantage of it.
While it is true that the debate about the pros and cons of globalization continues, it is
important to begin to recognize those adverse effects that are not talked about, to
understand the problems behind such a large global interdependence and to create solutions
to mitigate the negative impact of globalization.
With this motivation, this text will analyze how globalization has contributed to the growth
of the global inequality gap, recognizing relevant examples, and identifying the main
factors of this problem.
Globalization is a historical process that has grown rapidly in recent decades thanks to the
constant advance of technology. This has created important opportunities for the world to
be connected to each other, creating an environment of alliances, cooperation and
exchanges that have been enriching for many communities, with trade and production as
the main axes of this process.
Globalization in its essence intended to reduce poverty and inequality, since a greater
number of global opportunities would allow more people to work and benefit from it, but in
its essence, it did not consider important considerations and factors that would prevent the
expected benefits. No one doubts that globalization has increased growth rates in emerging
economies, but this has not translated into less inequality in societies that already suffered
from abysmal differences within them (Maskin, 2014, p.6).
Generally, countries that are suppliers of raw materials and working capital base so that
trade and economic exchanges can take place, are countries that suffer from deep internal
conflicts that have a historical baggage that has not been resolved. Therefore, in developing
countries, the conditions of poverty and marginality of a large part of their inhabitants make
it necessary to maintain and design ecosystem management schemes that take these
characteristics into account (Trinidad, 32837, p.4).
Thanks to the benefits brought about by the incorporation of large companies in developing
countries, they have become important players in the public policy decisions of the same
countries. The great concern of national governments in less developed countries is that
some multinationals have a greater power of influence and negotiation than the
governments themselves, which calls into question a favorable negotiating position for
developing countries (Lascurain, 2012, p.84). Therefore, these tools provided by the
companies put them at an advantage even to negotiate in territories other than their own.
Although smaller countries are the livelihood of these large companies and have often been
affected by the over-demand for resources, putting communities, environmental resources
and human rights at risk, economic capital has gained ground as a primary factor and in
many cases has been decisive at the time of negotiation. From that moment on, there is
already an imbalance between who has the reins of the business and who does not.
In our days, the big companies continue to grow, the richest men continue to increase their
wealth and, in the countries, where those products that generate wealth are produced, the
conditions for the workers have remained the same or have improved in the least. Bucher
(2022) states that even if the ten richest men in the world were to lose 99% of their wealth,
they would still be richer than 99% of the world's population and that they currently
accumulate six times more wealth than the 3.1 billion people living in the greatest poverty.
Graph 1 (see attached) prepared by James Eagle (2021) shows how the richest people in the
world have repositioned themselves after the Covid 19 pandemic, where we can see that in
the top 3 places are American men and that each of them accumulate more than 100 billion
dollars. Their companies are all over the world, they have generated thousands of jobs, they
have developed technology and facilities for people, however their workers, even though
they work 24/7 without rest, could never obtain such amount of money.
To consider that the richest men in the world are in the United States is also to rethink the
other figures where the country is one of the most unequal. As we can see in chart number
2 (see attached) elaborated by Credit Suisse Global Wealth (2018) and shared by the BBC,
the United States is the fourth country where only 1% has the concentration of wealth.
While the incomes of the richest 0.1 percent have more than quadrupled, and those of the 1
percent have nearly doubled, those of the bottom 90 percent have declined (Stiglitz, 2019,
p.1). Inequality is manifested by factors such as discrimination, levels of schooling, access
to health care and lack of rights. The United States is known as a country that produces
development, but for whom and at what cost?
As an example, we can take the growth of Jeff Bezos as founder of Amazon, which in the
pandemic was one of the biggest gainers and was characterized by generating employment
and global transactions on a large scale. However, for some years now, harsh controversies
have been pointed out about the quality of work offered in its workplaces and how its
workers are not sufficiently remunerated. In 2020, Amnesty International reported that at
the height of Amazon's commercial transactions, its workers were exposed to health risks in
an uncontrolled pandemic. It is reported that the large corporation has not even allowed its
workers to unionize and has threatened their livelihoods. In March and April, outrage
erupted in the United States when Amazon fired staff who had publicly denounced their
health and safety conditions at work during the pandemic (Amnesty International, 2020,
p.1).
To understand inequality in globalization is also to think beyond the gap between the
incomes of top managers and their workers, but also to consider that the gaps are
transferred to other areas such as labor rights, health, access to opportunities, decision
making, education, etc.
Situations like Amazon's are just a small example of how the increased power of companies
is often not entirely positive and has negative effects that jeopardize the stability of the
families that depend on the jobs. Not all countries where companies operate have the
necessary policies to protect their people, and many times this benefits the companies to
free themselves from the extra costs of their production. Romero & Vera (2014) mentioned
an aberrant case is the one that occurred in Bangladesh, where more than a thousand
workers making clothes for multinationals such as Mango and others, perished when a
building collapsed, even though they had already been warned about the danger they were
in. The authors also mention that this is due to the lack of industrial safety, precarious
work, are possible thanks to the complicity of the Bangladeshi government.
While it is true that globalization has allowed us to have great progress and development,
we must understand that it is not taking place under equal conditions for all.
While it is true that globalization has allowed us to achieve great progress and
development, we must understand that it is not taking place under equal conditions for all.
Many groups have taken advantage of the opportunities offered by globalization, even if
this means leaving little room for growth and protection to those who are the basis of large
companies and economies. Inequality is most clearly seen in growing countries, which do
not have the conditions to adapt to the impact of globalization, but in the world in general it
is necessary to be concerned and take action to reduce the gaps and adverse effects.
If there is no equality of opportunities, rights, salaries, health, and decision making we
cannot think only of the positive effects of globalization because this will only allow gaps
to widen and vulnerable groups to become more vulnerable despite their work.

Attachment:

Graphic 1:

Eagle, J. (2021). The rich got Richer during the pandemic. EEAGLE. .
Graphic 2:

Goodman, J. (2019). ¿Es relamente Estados Unidos el país mas desigual del mundo. BBC
News. Retrieved from https://www.bbc.com/mundo/noticias-47488330

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