Globalism and the Growth of Income Disparity
Globalism refers to connectedness and communication networks that span continents and bring the world’s people closer together, and globalization refers to how globalism increases or decreases. Digital technology has increased globalism, global marketing and business opportunities, but this growth doesn’t mean that everyone gets a share of the wealth. There has been a growing gap between the richest and poorest people that only seems to increase as globalism generates more opportunities.
The top fifth of U.S. households, for example, own 84 percent of the nation’s wealth while the bottom two-fifths only own 0.3 percent of the country’s wealth according to the Economist.com. A Scalar.USC.edu study found that incomes for the richest 1 percent tripled between 1979 and 2007 while median income households only earned 25 percent more in the same period, and most of that increase was due to labor force increases and people working longer hours.
Income Disparity Between Poor and Rich Has Grown Steadily Under Globalization
People persist with many misconceptions and seem to prefer rags-to-riches success stories over the truth that the disparity between the haves and have-nots continues to increase. These misconceptions include:
- Globalism makes things fairer for everybody.
- People live similarly everywhere in the world.
- Cultural differences are gradually disappearing.
- Education and hard work always guarantee success.
- The middle class lives more like rich people today than any time in history.
- Most people guess that the richest fifth own 59 percent of the nation’s wealth, but they actually own 84 percent.
A BLS.gov study proposes the idea that the inequality gap between the wealthiest people and upper middle class grows even bigger as higher classes earn more wealth and hire expert tax advisers and accountants to shield their income from taxes. Research shows that people from all classes do earn more with postsecondary educations, but the huge costs of schooling often neutralize the practical benefits of that income.
Those who do earn and save more money often end up investing their savings in their own children’s educations at fancy primary and secondary private schools and colleges, so the inequality gap of buying power and income grows increasingly wider between the wealthiest earners and all other classes. The Walton family of Walmart and Walgreen fame own more resources than the all the assets of the lowest 42 percent of American families combined.
The Golden Thumb of Globalism: Earning a Fortune on the Internet
The persistent idea that globalization, digital access and easy ways to start online businesses convinces many of the people with lower incomes that they can raise their incomes and status with easy money earned over the Internet. However, most Internet schemes favor the companies that sell wholesale products, provide marketing services, offer advice or take advantage of unsophisticated aspiring entrepreneurs to relieve them of their cash.
People end up spending more of their resources on risky projects or consumer goods that they find online, so they never realize the benefits of marketing globally as more seasoned investors and wealthy business owners do. Even college educations no longer guarantee a better standard of living despite increased enrollments and expanded educational opportunities through online courses and global communications.
Globalism Offers Opportunities for Merit-Based Efforts but Generates Risks
There is, however, some good news that can be attributed to globalism. Although the gap between wealthy and poor increases each year, people aren’t completely trapped in one group for their entire lives. A Fortune.com article describes a study that found 70 percent of the U.S. population experience at least one year of their lives in the top fifth income percentile, and 11.1 percent of people will experience at least one year in the bottom 1 percent. People can and do move through different economic conditions, but most people just can’t keep their gains.
College Educations Often Fail to Improve Economic Conditions for Graduates
College educations–the universal panacea that people believe generates better economic opportunities–no longer guarantee a better lifestyle due to the high costs of education and the vast debts that students and their families must take on for four or more years of postsecondary education. TheAtlantic.com reports that American universities are educating more American and international students, which could easily help to make graduates more upwardly mobile. However, the crushing costs of education, according to BusinessInsider.com, follow students into their 40s during their most productive earning years. Many people between the ages of 35 and 50 still owe almost as much as people who just graduated college due to interest charges, payback delays and penalties.
Income Disparity Isn’t the Only Difference Between the Poor and Rich
The extremely wealthy don’t realize the struggles that ordinary people face in their daily lives such as how to pay for an emergency expense when someone doesn’t have good credit, savings or family resources. Most people remain optimistic about their chances of rising above poor roots to become wealthy, but these cases happen less often than most people think. Even those who achieve a modicum of success often lose their wealth because they’re unaware of the traps, taxes, investment risks, con artists and other criteria of successfully managing wealth. Learn more about globalism and its benefits for achieving wealth and the greater disparity between poor and rich that this generates at the PersonalMoneyStore.com.