Containerization and globalization
However, it is believed that inequality within a country has risen during the period, as the chart below has shown:
Gini Index of China and United States, 1990-2011
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42
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36
34
32
30
1990
1993
1996
1999
2002
2005
2008
2011
China
United States
Figure 8: Gini Index of China and the United States, 1990-2011 27
There were some upward changes in Gini index of both countries (although the change is more noticeable in China), which means that although inequality between countries has fallen, there is now more inequality among citizens of the same country. To explain why this happened, I divide everyone in the world into four groups and explain how globalization affected their lives: The rich of rich countries (RR), the relatively poor of rich countries (PR), the middle class of developing countries (RP) and the poor of poor countries (PP). Examples of group RR may include CEO of an international company headquartered in Switzerland; group PR may include an average steelworker in northern England; group RP may include mid-level employees of Huawei or experienced factory workers in China; group PP may include a farmer living in rural Tanzania. In the globalization process, group RR is always the one who gets the majority of the profit, so they will end up making money just as before; group PP isn’t even involved in the process, as they don’t have adequate infrastructure to be connected to the world. However, life of the other two groups has changed dramatically: According to the market mechanism, when there is a new substitute(cheaper labour in developing countries) for a good(low-skilled labour in developed countries), its demand will fall down, causing a decline in the amount supplied (less employment) and lower prices(decline in wages), while demand for labour in developing countries has risen, causing the opposite effect (higher employment and higher wages). This means that the globalization mixed the two groups together, changing the fact
27 World Bank. ‘ GINI index (World Bank estimate) of China and United States ’. https://data.worldbank.org/indicator/SI.POV.GINI?locations=CN-US. There are only data of China for 1990, 1996, 1999, 2002, 2005, 2008, 2010 and 2011; there are only data of United States for 1991, 1994, 1997, 2000, 2004, 2007 and 2010.
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