January 02, 2008

Paradox of globalization: Rising prosperity and inequality

On page 203 of the book "Paradoxes of Culture and Globalization" I read this:

One of the critical paradoxes in the area of globalization is that it is associated simultaneously with both rising prosperity and inequality. Nearly half of the world’s population lives on less than $2 a day and 16% get by on less than $1 per day. Despite these conditions, the nations actively involved in global economic activities have consistently increased their wealth per capita. The dramatic reduction of poverty in Asia from 76% in the 1970s to 15% in 1998 is significantly related to this continent’s participation in the global economy. This positive picture is counterbalanced by the rising inequalities that nations participating in globalization are uniformly experiencing. Perhaps the most dramatic manifestation of this phenomenon is the widened gap between the average total compensation (salary plus fringe benefits) enjoyed by CEOs and that of the average worker in a corporation. Various estimates for the United States are available, some of which suggest that the gap has risen from a ratio of 40 to 1 in 1970 to a ratio of more than 200 to 1.
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