International Trade and Public Policy and Globalization and Wealth in America
Income inequality measures the gap between individuals or households who make more money in a given country and those who make very little. It is the unequal distribution of household or individual income across the various participants in an economy (Business Dictionary.com). In the U.S, income inequality increases from 1980 to 2010 (Business Dictionary.com).
Outsourcing and trade can cause income inequality among nations, individuals, or businesses. For example, the wages of skilled workers have risen faster than the wages of unskilled workers. Trade theory shows that there is a relation between increased trade and increased wage inequalities. For example, let say Spain manufactures goods with skilled labor and unskilled labor. Spain may have advantages in products that are skilled. Other countries may have advantages in products that are unskilled. That can cause a type of inequality among Spain and other nations. Spain can trade its products with other countries in the world. World trade has a positive relationship with exports and imports. That is, if world trade increases, both imports and exports increase, or if world trade decreases, both imports and exports decreases. Imports support domestic consumption, investments, and current production. When imports increase, we have to manufacture more skilled labor goods, which cause an increase in the demand of skilled labor. There is also an increase in terms of buying unskilled labor goods in other international countries. The exchange, buying, or selling of goods and services between countries is known as international trade or world trade. It allows each nation to consume more of another.
Sometimes we use trade restrictions to protect corporations that have employees who are not skilled. We can also try to have an economy with more skilled workers. Workers can work at industries that required skilled labor. That can help them to make more money. The government can try to assist unskilled workers by educating and training them.
Additionally, globalization means that trade between nations become seamless as trade between states, provinces, or city within a given nation. Globalization can lead to better wages, innovation, and cultural exchanges. It can improve the way that people live in this world. There is a difference between globalization and free trade in terms of the degree of integration across nation. That can cause a type of income inequality. Some people are against globalization, saying that businesses face more competition when our boarders are fully open to trade.
In the coming year, we will gain better insights into how international trade and outsourcing affect the wage of skilled workers. But they do affect it somehow. They affect a nation, causing a sort of income inequality among people, skilled workers and unskilled workers, for example. Globalization, which is a type of trade, can lead to better wages among nations or individuals. International trade and outsourcing can also cause a sort of inequality among businesses.
Worked cited
http://www.globalsherpa.org/globalization-globalisation: Globalization – Background, Rankings and Articles.
Commission proposes new framework for enforcement of international trade rules by
Elena Ralli in neurope.
http://www.investopedia.com/terms/i/income-inequality.asp
