Essay Prompt (final)

Globalization involves the rapid spread of information and technology which forces countries to modernize quickly. This increases international trade and has led to the entry of foreign professionals and cheap foreign labour. Thus, the rise in cross-border interaction among people is caused by globalization and the pursuit for better lives. However, this phenomenon has resulted in the problem of income inequality. It is a growing problem in various regions in different ways and even affect developed countries such that, according to Cooke (2012), the United States has been labelled as “the most unequal advanced country”. Though achieving economic growth is essential for countries' development, governments have to intervene to strike a balance involving all layers in the community to curb income inequality. This problem could be mitigated by the involvement of the government in education funds and distribution of income.

 

Singapore, for example, has made rapid technological progress over the years. Consequently, the country faces difficulty balancing wages of the people due to high-income foreign talents investing in Singapore for technological research and importing low skilled labour. Hence, this widens the income gap further as the country progresses with globalization. This can be proven by an analysis on the Gini coefficient which is a statisical measure of income distribution. Based on the report by Singapore's Department of Statistics, the country's Gini coefficient rose to 0.478 in 2012, which is significantly higher than most of the developed countries (Salimat, 2013). Many analysts warned that the wide income gap would lead to social unrest and political challenges in Singapore (Ngerng, 2013).

 
          Kohut & Wike (2008) suggested that the government should help the poor communities. Considering this, one of the ways to curb income inequality is by funding education for families of low skilled labours. By developing arithmetic and language skills from a young age, the next generation of the poor communities will be able to advance to further education and improve their lives. In addition, these children will be able to develop social etiquette and communication skills that are essential for a healthy society. Furthermore, the government could provide grants for skill enhancement programs targeting low-skilled working adults. An example would be the Skills Upgrading Programme developed by the Singapore Workforce Development Agency to helped workers "stay relevant in today's rapidly evovling economy" (Ministry of Manpower, 2013). With additional skills, these working adults will be able to hold important roles in their company and could get a pay rise. By funding education for low skilled workers could improve their income as increased knowledge would provide them with useful skills in this globalized world.  

More often the relationship between globalization and income inequality is that the wealthy society obtains most of the benefit (Archer, 2013). Hence, another way for government intervention is to restrain, regulate and redistribute income. The widening income gap between the rich and the poor has to be controlled by limiting growth of the highest income and raising the lowest wages. By taxing the rich, the country would be able to distribute income fairly. Singapore, for example, has no minimum wage requirement to encourage a competitive wage market for potential employees. However, the government has to encourage companies to provide pay rise for lower income workers so as to solve the problem of the widening income gap. Furthermore, this concept of distributing the wealth of the rich and paying higher wages for the lower skilled has to be regulated to ensure the fair-share of wealth including foreigners.

To conclude, governments have to intervene to curb income inequality. In a 2007 Pew poll published by Kohut & Wike, the majority of people agreed that the government could play a bigger role in providing assistance to the lower income and needy families. Moreover, by imposing higher tax on the highest income, it would help to ensure a fairer share of wealth whereas subsidies for the poorer community would lessen their financial burden. Extreme low wages for the uneducated and elderly are forcing some into a severe cycle of poverty. This will result in depression or mental stress on these communities as they struggle to earn a living. Therefore, imposing higher tax on the rich and funding of education and skills upgrading for lower income households could narrow the income gap.

Reference:

1. Kohut, A.,& Wike, R. (2008). Assessing Globalization: Benefits and Drawbacks of Trade and Integration. Havard International Review.
2. Cooke, K. (Dec 20, 2012). The Unequal State of America: Why America is more unequal than most. Reuters. Retrieved from:  http://www.reuters.com/article/2012/12/20/us-equality-indiana-oecd-idUSBRE8BJ0J520121220
3. Salimat, S. (2013). Singapore's income inequality on the rise: Dept of Statistics. Yahoo! Singapore Finance. Retrieved from: http://sg.finance.yahoo.com/news/singapore-income-inequality-rise-dept-135226813.html
4. Ngerng, R. (2013). Singapore has the highest income inequality compared to the OECD countries. Retrieved from: http://thehearttruths.com/2013/02/21/singapore-has-the-highest-income-inequality-compared-to-the-oecd-countries/
5. Ministry of Manpower. (2013). Skills Upgrading. Retrieved from: http://www.mom.gov.sg/skills-training-and-development/adult-and-continuing-education/skills-upgrading/Pages/skills-upgrading.aspx
6. Archer,D. (2013). Could America's wealth gap lead to a revolt? Forbes. Retrieved from: http://www.forbes.com/sites/dalearcher/2013/09/04/could-americas-wealth-gap-lead-to-a-revolt/