Hameed and Nazir (2014) argue that liberalization neutralises unemployment, citing Pakistan, as one of nations where trade liberalization has helped reduce job losses. Complementing the argument, Siddiqui and Kemal (2002) state that after liberalization, employment and production increased, generating demand for labour and imports. This dropped unemployment and reduced poverty, as economic and living standards continued to rise.
Dollar and Collier (1999) argue that when low income nations join the global markets for products and services, poverty is decreased as the people access better forms of employment, in the towns and municipalities. For example Bardhan, (2007) states that in India, poverty declined from 44.55 percent in 1983 towards 27.5 percent in the period 2004 and 2005, resulting from the productivity surges attributed to skilled workers earning more within the integrated market, because globalisation works to encourage easy labour mobility across the integrated market. For example, engineers as well as economists can quadruple his/her pay by moving to Silicon Valley or the Wall Street from Kerala and New Delhi (Birdsall, 2001).These workers will send money home which will help better the lives of their families.
Additional gains have been experienced by the family according to Manson (2002) because the working women’s pay cheque supplements the household’s income. This has led to a rise in the quality and quantity of the consumption because women are chanced to spend more on, dressing, education, health care, housing etc. Within the family, there is cost sharing resulting from the supplementary finances from the woman’s pay. This has given men the opportunities to move to cities in search of rewarding employment, rejoin school or move overseas for better compensation. Industrial employees In Bangladesh, send a portion of their pay back home to their people and save the rest for the future. These remittances help improve the people’s living standards and reduce poverty (Manson, 2002).
Finally, Johnson (2002) argues that Developing countries have gained awareness of the issues facing the population and are increasing activities aimed at addressing them, which has helped improve the standard of living in some countries of the global south and raised life expectancy. Cambodia’s life expectancy for example increased from 40 to 61 in the period between 1980 and 2008, this according to Simpson (2007) resulted from improvements in health care, immunization, infant mortality and social services.
As majority of scholars agree that Globalisation is reducing poverty, there are other scholars arguing that globalisation is the catalyst for the increasing poverty. For example;
Manson (2002) argues that Market policies, for example privatization which raise unemployment through retrenchments that eat into the household income and subsequently give rise to poverty. Hilary(2003) states that the poor households in the global south lack sufficient water cater for the basics family needs because privatisation of the water divisions in the global south has led to escalation in dues to heights they cannot afford. These massive price escalations on water in cities such as Manila have constrained household food expenses and forced the children quiet education, join their parents so that they can all work as one in order to stand up to the economic pressure on the household. (Hilary 2004)
The unskilled and illiterate as stated by Basu (2004) are left lagging behind due to their inability to take advantage of the recent technological changes. This means, the poorest people suffer for a long time before benefiting from globalisation. Skilled workers in poor countries are expected to benefit excessively from globalization, because their technological operational skills make them marketable to international organisations that pay better. Brain drain in large amounts brings about skill dearth in developing countries which raises the demand and price of certain skills and enriching the skilled few
Banerjee and Piketty (2005) argue that the rich minority in India have benefited most over the last decade as a result of globalisation and as the get wealthier, the poor get worse off and their total welfare may fall as a result of the rise in prices brought about by skilled labour deficiencies. Skills traditionally learned may lose their value and the people who used them to earn a living may be under threat of losing their small business. Basu (2006) writes , villagers from Jakarta who earn their livelihood working handicrafts and embroidery on fabric, were concerned that their small businesses and sources of income could get wiped out by competition from global manufacturers who may decides to make embroidered clothing on a larger scale and export them to India. To these village residents, globalization is seen as a source of hardships.
Weisbrot et al (2002) is cited in Kiely (2005) stating that tariff abolition, reduces national revenue, particularly because tariffs are easier to collect in comparison to other dues, in economies seeking growth. A quarter of India’s national proceeds in 1990 were from tariff collection.
The wealthier people get, the more socially transformed they become, treating the less wealthy unequally. As shown in the literature below globalisation increases inequality;
Stringer, (2006) cited in Faustino, Vali (2011) argues that Foreign Direct Investment, in developing countries hinders growth of the economic and endorses income inequality by forming disparities and dualism in productive and economic configurations. Majority of conglomerate For example, form an extremely capital intensive export section, operating on their own, consuming majority of the resources, capital and existing credit, only to repatriate their takings (Stringer 2006). Further still, foreign direct investment creates and sustains social groups that work to guarantee the access to cheap labour and socially excluded employees, according to Stringer (2006).
The largest rise in inequality was seen in the export industry. Accordingly, Feenstra and Hanson (1996b), rising income inequality in Mexico is concurrent with overseas remittances. A growth in outsourcing by conglomerates has shifted manufacturing towards skill intensive services thereby raising the demand for skilled labour which is favoured by globalisation.
Aitken et al (1996) and Pavcnik (2000) argue that skill-intensive manufacturing in Mexico is recommended because employees of conglomerates and international joint ventures are highly rewarded. There is proof stating that higher qualification curry better salaries. The Asian Development Bank (2007), as cited in Bardhan (2008) indicated that full-time employee wages in India had risen to 0.47 in the year 2004 from 0.38 as recorded 1983 Bardhan (2007) attributes this rise in wage inequality as a result of the skill-intensity of Indian’s economic development and the lack of relevant skills and talent in the corporate sector.
Unskilled women have more often been victimised by globalisation. Martell (2010) argues that House helps can be illegal or undocumented immigrants, isolated in homes where they are exploited, harassed and work long hours for little money that is sometimes not paid. House based labour is eye-catching but because it is unsystematic, exploitation is painless. Globalisation, the rise of multinational and outsourcing have brought about the employment of women who offer cheaper labour and tolerate poor conditions. Amnesty international (2013) writes about the enslavement of domestic workers in Hong Kong. Workers are punched, beaten, physically and sexually mistreated, hungry and un paid.
Gupta (2008) argues that, globalisation has promoted a culture where by a portion of the population that has the ability to pay high prices for private medical services are the only ones catered for by the Indian health care industry . In India, private, pricey health care is for the privileged and cheap, low class and state funded medical care is directed to the poor. The poor are looked down upon when they try to seek private health checks. The ailing Majority, have to take a loan or put their assets up for sale and 25 per cent of poor households with an associate requiring in-patient care services are at risk of falling into extreme poverty. (Gupta, 2008).