Over the past two centuries, the world has been in a continuous cycle of global changes. Globalization fuels this increased change globalization as the economic integration takes over the business environment. According to Savrul and Insecara (2015), globalization is the economic integration of nations through capital flow, investment, migration, trade, and technology. Nonetheless, globalization is at times regarded as being a double-edged sword for it can have both negative and positive impacts on the nations as seen from an analysis of two regions, Europe and Africa.
Globalization and Jobs and Wages
According to Qureshi and Wan, (2008) during the 1980s, there as a heightened effort by most nations to boost economic integration. However, this has brought about an intensified debate on hat the impacts of this openness has on in the social, environmental and economic well-being of nations. One of the significant effects of globalization is that it has brought about increased gaps in relation to income inequalities. Globalization has in most cases favored the developed regions such as Europe at the expense of developing regions such as Africa.
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A good example of this is seen in the case whereby, Luxembourg had the highest per capita gross national income of US$ 56,800 as of 2004 while Burundi had the lowest at US$90 (Qureshi and Wan, 2008). Furthermore, as the global poverty rates declined in 1998, they increased in Africa by about 66% (Majeed, 2015) . From these statistics, it is an indication that specific regions are reaping big from globalization as others continue to languish in extreme poverty.
For any nation or region to see an increased economic growth, it must create enough employment opportunities for its citizens accompanied by a high wage rate. Without employment, a nation’s economy is bound to face extreme conditions it cannot create room for investments among other vital economic growth factors. Increased globalization has reduced the jobs and wage rates in most African nations as compared to the European countries. The labor market is the primary means through which globalization can have detrimental impacts on the developing nations found in Africa.
A substantial number of the developed nations have increased importations of their services and goods into African nations including foreign direct investments which affect the capital movement thus impacting jobs and wages. Most of the developing countries in Africa have been forced to eliminate any form of trade barriers, privatize some of their firms, abolishment of legal monopolies and reduce overstaffing. Such intense reforms are what has brought about increased reductions in the jobs and wages thus a high poverty rate within the African Region.
According to a 2016 world bank report on poverty rates in Africa, despite declining from 56% in 1990 up to 4% in 2012, the number of people living in poverty has still increased up from 280 million in 1990 to 30 million in 2012 attributed to an ever-growing population (The World Bank,2016). Compared to Europe, only 23.5% of the population lives in poverty as of 2016 (Eurostat, 2018) . This increased disparity arises from the fact that the jobs and wages rate in Europe increased much higher and better as compared to Africa which stood at.
It is evident that globalization is a double-edged sword as seen from its impacts on jobs and wage rates in both Africa and Europe. Most of the European nations have a lower poverty rate for the economies of the country can support higher employment opportunities and offer high w ages to the employees. Unlike in Africa, the nations have high unemployment rates which translates to low salaries for even those who have a chance to get employed. However, most of the developed countries have continued to dent the job and wage abilities of African nations due to globalization as they increase imports into the region which affects the local industries thus forcing some to close down once they set operations within the region following their high economies of scale, they will offer low wage rates for people employed. Such factors have brought about the poor job and wage rates in the African Region.
References
Eurostat. (2018.) People at risk of poverty or social exclusion . Eurostat . Retrieved from https://ec.europa.eu/eurostat/statistics-explained/index.php/People_at_risk_of_poverty_or_social_exclusion
Majeed, M. T. (2015). Distributional consequences of globalization: Is organization of the Islamic conference countries different? The International Trade Journal , 29 (3), 171-190.
Qureshi, M. S., & Wan, G. (2008). Distributional consequences of globalization: Empirical evidence from panel data. The Journal of Development Studies , 44 (10), 1424-1449.
Savrul, M., & Insecara, A. (2015). The Effect of Globalization on International Trade: The Black Sea Economic Cooperation Case. In International Conference on Eurasian .
The World Bank. (2016). While poverty in Africa has declined, number of poor has increased. The World Bank . Retrieved from http://www.worldbank.org/en/region/afr/publication/poverty-rising-africa-poverty-report
