GLOBALIZATION AND GROWING INEQUALITY

SANDESH G.NAYAK

World is going through its gravest economic downturn since the great economic downturn of 1930's. The ILO report says that the root of this crisis lies in 1990's economic reforms. Through this reforms, the world economic order took a turn and headed for different direction and is the main reason for contemporary economic inequality, social security concerns and labour relations.

Recent report of ILO clearly highlights the growing inequality among different section of workers and decrease in the unemployment after the globalization. - Main reason is due to the extinction of many domestic industries which are affected by the global factors.

Although the 1990s economic reforms were accompanied by “substantial economic development across most regions" there were variation in labour market performance between and within the countries. Moreover, increase in employment also occurred, alongside a redistribution of income " away from labor".

Statistics indicated the share of wages in National Income declined over the past 2 decades. This means that workers gained very less from the economic growth. The rich poor gap also widened.Nearly two thirds of the countries experienced an increase in income inequalities. Yet another finding is that this rich poor gap is doing so at increased pace.

Financial Globalization has not lived upto its promises. Another problem that it has eroded the Bargaining power of employees and contributed to decline in wage share over and above any effect resulting from trade integration or sectoral change. The continuing economic slowdown coupled with rising food prices will accentuate the income inequality and affect the employment opportunities of low income group..

Although in line with the economic thinking since the advent of globalization, the report argues that income inequalities could be a good thing as it rewards work quality, talent, and innovation. It strikes a serious note of caution that “there are instances where income inequality reaches excessive levels, in that it represents a danger to social stability while also going against economic efficiency considerations.”