inequality issues (12)

Inequality issues

2 measures of inequality:

1. the difference between richer countries and LICs
... and whether this difference os increasing or decreasing

2. the inequality in incomes that exist within each country
... and how this is being affected by globalisation

LICs dominate...

in low income industries where skilled workers aren't really required therefore the unskilled workers are in high demand and have access to jobs that they can't demand high wages from
= inequality supposedly falls

e.g., thailand = leading exporter of rice

HICs dominate...

in the high income industries where skilled workers have many job opportunities where they can demand high paying wages
= inequality supposedly rises

e.g., USA = largest exporter in the financial services

brain drain

the loss of highly educated and skilled workers from LICs as they migrate to HICs

= increased differences in incomes

GDP per capita of countries

BRAZIL:
2019 = 16,096
x1.239
2021 = 19,948

CANADA:
2019 = 48,130
x1.122
2021 = 54,032

CHINA:
2019 = 18,236
x0.688
2021 = 12,556

DRC:
2019 = 581
x0993
2021 = 577

INDIA:
2019 = 7762
x0.298
2021 = 2,320

JAPAN:
2019 = 42,797
x1.144
2021 = 49,000

KENYA:
2019 = 3,467
x0.344
2021 = 1,195

MEXICO:
2019 = 19,844
x0.551
2021 = 10,945

NIGERIA:
2019 = 5,990
x0.369
2021 = 2,065

PERU:
2019 = 14,418
x0.459
2021 = 6,623

PORTUGAL:
2019 = 33,415
x0.718
2021 = 24,000

UK:
2019 = 45,973
x1.025
2021 = 47,127

USA:
2019 = 62,794
x1.190
2021 = 75,100

the Gini index

= where every country is given a score between 0 and 1 depending on how evenly their wealth is shared

- if a country has a score of 0 it would mean everyone had the same income
... low disparity

- if a country has a score of 1 it would mean the income of the country was controlled by a single person
... high disparity

patterns of the gini index

- northern hemisphere tends to have the lowest amount of disparity compared with southern African countries or South America

South Africa = one of highest levels of disparity
... 0.62-0.74

South America = highest levels of disparity with around 60% of the countries having high levels of disparity

factors = conflict, Brain drain and NEE outsourcing

inequalities within countries - the Lorenz curve

shows how countries compare in equitable distribution to each other or a line showing perfect equality in terms of money

45 degree line represent equal distribution of income

the further away from the line = the more unequal distribution

area A = area between 45 degree line and country curve

area B = area underneath the curved line

Gini coefficient =
A/A+B

Outsourcing

TNCs based in developing countries often employ skilled workers and pay higher wages

(study shown that foreign transnationals pay 40% higher than wages of local firms)

... unskilled workers in rural areas tend not to have such opportunities

so inequality increases

investment

those with some money to begin with tend to gain from investment and benefit more from the growth of the economy

those without money stay rooted in poverty

only with further developments will equality increase

... unequal power relations enable some states to drive global systems to their own advantage and to directly influence geographical events while others are only able to respond or resist in a more constrained way