Title: Does Globalization Harm the Poor?
Headings: 
Does Globalization Harm the Poor?
Is Globalization a Force for Poverty Alleviation, or a Driver of Inequality?
Global Poverty Reduced
What about Inequality?
Why Domestic Policies Matter
Baylee Eby
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Further readings on Economics 101

Content: One study showed that workers in foreign-owned and subcontracting clothing and footwear factories in Vietnam rank in the top 20% of the country’s population by household expenditure. A report from the OECD found that average wages paid by foreign multinationals are 40% higher than wages paid by local firms… By contrast, unskilled workers, or poor ones in rural areas, tend not to have such opportunities… For these reasons globalization can boost the wages of skilled workers, while crimping those of the unskilled. The result is that inequality rises. From this point of view, we can see how globalization may be a contributor to inequality. However, there are two things that we should keep in mind: ( 1) the impact tends to be relatively small, and (2) income inequality is not necessarily a negative thing. Studying the impact of technology, trade, and financial globalization on income inequality, the IMF found that: The contribution of increased globalization to inequality has in general been relatively minor. This reflects two offsetting effects of globalization: while increased trade tends to reduce income inequality, foreign direct investment tends to exacerbate it.