Poverty vs Inequality

We had a case study on inequality and globalization. The case study provides three reasons for widening inequality in income distribution in the developed, developing and less developed economies. The reasons are globalization, techonology and government policies. Globalization had moved companies to locate their manufacturing industries where cheap labor is available such as in China, India, Brazil and other emerging economies. This resulted in displacement of jobs in the developed economies, widening the income gap, where the rich are highly educated and earning millions or even bilions per year while the poor earning much less. In US for example, those who are professional and in the financial and capital markets are the richest and those working in factories and odd jobs are poor. The Gini coefficient, a measure of income gap is widening in the US and for Malaysia too. Secondly, the techonology is displacing human with machines and robots. This is a global phenomenum and education system need to be focussed on areas where demand jobs in the labor market is high. Finally, government policies are skewed towards growth rather than equity. In less developed countries, the situation is worst, the poor are even denied the right to vote, what more self progression in life through proper education, food and health. Corruption and nepotism are the game of life over there.

Moving on, which is crucial to address poverty or inequality? I pesonally feel that for most of the developing and less developed economies the question of eradicating or reducing poverty is more pertinent than reducing the inequality gap. Millions of people still live below poverty line income and does not have or acessible to 'basic needs' such as food, water, shelter, proper sanitation, healthcare, and education. According to Netaid (Mercy Corps New York)"Each year, more than 8 million people around the world die because they are too poor to stay alive. Over 1 billion people - 1 in 6 people around the world live in extreme poverty, defined as living on less than $1 a day. More than 800 million go hungry each day. Over 100 million primary school-age children cannot go to school."The government in developing economies, while eager to achieve higher economic growth should put equal emphasis on solving the poverty issues. The International organizations such as World Bank and IMF, though have various programs on poverty, have failed to solve this poverty issues (because they are also involved in other development issues and not to mention sometimes involved in bailing-out activities). For the developed economy, the issue is more of inequality in income distribution. Taking US for example, the inequality is rising. The productivity is rising but real wages are declining. May be for US, the productivity-linked wage system should be implemented. Other than that, the US Government should implement more pro-welfare/social programs such uplifting education level, skills retraining and income generating activities (rather than spending huge amount on military). For Malaysia, the government should upgrade the livelihood of the poor through education, entrepreneurial skill enhancement and income redistribution programs.

Finally, I hope each and every one of us will, in our own capacity, try to address the poverty issue either in our own country or at global forums.

All man are equal
Man make man poor
Why poor in a rich world