International Business: The New Realities, 5th Edition

Effect on the Poor

Globalization has affected the poor in areas related to income distribution and worker exploitation by MNEs. Income distribution refers to the allocation of GDP and national income among the members of a society. In some countries, a relatively small minority, often less than 10 percent, holds most of the country’s wealth, and the great majority of citizens live in poverty. This income inequality is substantial in several nations in Southern Africa and in Latin America, for example. Among the advanced economies, income inequality is less of a factor in Japan and most countries in Northern Europe due mainly to cultural factors and public policies. Income inequality is relatively more common in the United States, which is home ...