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Income Disparity

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Globalization and Income Inequality
Is globalization the cause of income inequality? The effects of globalization is a highly debated topic with the pro-globalists claiming that globalization encourages economic growth while the anti-globalists arguing that globalization is responsible for increasing income disparity (International Monetary Fund, 2007). According to a 2011 Organization for Economic Co-operation and Development (OEDC) report, income inequality has widen over the two decades with the rich experiencing a faster income growth than the poor. Although globalization may boost economic development, it also poses a threat in causing an increase in income disparity which can be solved by improving access to education and promoting skills development.
Reform to better access to education are likely to have a positive effect on income inequality. It allows the lower income workers and their children to have an access to education. Moreover, individual with a better and higher education is more likely to secure a good job with high income. A research by Alderson and Nielson (as cited in Wells, n.d., p.5) shows that an individual who receives higher education is better paid than those with only primary or no education at all. Therefore, increasing education access could improve income mobility and thus reduce income disparity. However, this solution does not guarantee equal access to education. In Singapore, it seems that the local universities are accepting more foreign students. This is evidence from the information gathered by a NUS Professor, Dr. Loy Hui Chieh, stating the percentage of foreign undergraduate intake from year 1999 to 2006 has rise above 20 per cent (as cited in Lur, 2011, para. 13). The intake of foreign students is upsetting the local students as they not only need to compete with the international students for the limited places in universities, they will also need to compete for a job in the future. This will poses a threat to the local students' future survival. To alleviate this problem, the universities should prioritize the admittance of local students over the international students. Hence improving education access and equity are keys in decreasing income disparity.
Income inequality may be prevented by encouraging individuals to upgrade their skills. As advanced technologies are constantly being introduced into the labor market, the demand for highly-skilled workers are increasing. Consequently, the lowly skilled workers are deprived of jobs and it widens the income gap. Skills development programs allow the low income members to secure a job and remain employed in today's rapidly changing market. The effectiveness is evidenced from a survey conducted by the OCED, which states that the percentage of employment for the high and low skilled workers are 79% and 57% respectively. (2013, p. 227). However, such development programs may not be beneficial for the near retirement age group as companies might not want to employ them because of their age even after they have received the training. Government can address this problem by introducing a policy that requires a company to have their employees made up of at least 5 to 8 percent in this age group. This would ensure that this group of people will not be discriminated because of their age and continue to remain employed. The combination of skills development and equal employment opportunities would have positive effect on income inequality.
In conclusion, a combination of policies are needed to ensure a balanced distribution of income. Policies that improve accessibility and promote equal access to education can help an individual to secure a job with good salaries and thus reduce income inequality. In addition, policies promoting skills development and equal employment opportunities can combat income inequality by increasing the job opportunities for the marginalized group. In today's ever changing labor market, more policies need to be established and implements to ensure equitable distribution of income.

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