Twenty years after the
beginning of our modern Globalization, we are able to measure its outcomes.
Indeed, the integration of economics and societies all over the world,
involving technological, economic, political, and cultural exchanges, has had
innumerable consequences on our world[1]. Among
these consequences, we can hear lots of “stories” that are not necessarily
rational or proved: they are called myths. One of them is that Globalization
has led to the increase of the wage gap on a world scale and the arrival of
low-wages countries is mainly responsible for the spread of this belief. Thus,
our purpose is to discover whether this myth is founded or can be invalidated.
The
wage gap is defined as “the difference in rates of pay between two different
groups of people”[2]
and it does not include gains from financial assets, which is known as the
income gap. Thus, whether we can acknowledge that Globalization has lead to
a wider inequality in terms of income, things are different for wages. Due
to the increasing demand for top corporate managers, companies are becoming
more valuable, which has boosted executives’ income from salaries, stock
options and capital gains. But, as far as wages are concerned, the evolution
has not been that fast and that extraordinary, since only the real economy
(that pays wages) is called into play[3].
On
the one hand, in developed countries, while the wages of less-qualified workers
are overstrained by low-wages countries, the wages of qualified workers increase.
For instance, according to Swagel and Slaughter, “the United States wages of less-skilled workers have
fallen steeply since the late 1970s relative to those of the more skilled”[4]. The national wages distribution is more and more
unequal and leads to a feeling of injustice. On the other hand, the average wage
increases as well in developing countries thanks to Globalization. This way, the
gap between developed countries and developing countries is slowing to a
trickle. Thus, the wage repartition is becoming “fairer” at an international
level, while it is more unequal at a national scale[5].
In a nutshell, this myth has to be invalidated. Then,
we can easily understand the reason, this myth is still believed. It is a
common mistake to confuse the notion of wage gap and income gap. Moreover, the
feeling of injustice growing in developed countries appears to be founded and
has overtaken the vision on a world scale, which is still way more relevant in
our globalized world.
[1]
http://hotbabefatchicks.hubpages.com/hub/Definition-of-Globalization
[2] http://lexicon.ft.com/Term?term=wage-gap
[3] “The Income Gap : Is
globalization to blame? Only in part”, By James Pethokoukis, Posted 1/14/07, US
News
[4] « Does Globalization
Lower Wages and Export Jobs?”, Matthew J. Slaughter and Phillip Swagel, E C O N
O M I C I S S U E S, ©1997 International Monetary Fund
[5] Les
effets de la mondialisation sur les salaires et l’emploi : le salaire minimum
constitue-t-il une protection ? Intervention prononcée par Tobias Seidel,
Chercheur à l'Institute for Economic Research de Münich, au colloque du 17 mars
2008
