Argument: Free trade worsens income inequality

Issue Report: Free trade


  • Jay Mazur, president of the Union of Needletrades, Industrial and Textile Employees. “Labor’s New Internationalism”, Foreign Affairs, Vol. 79, January-February 2000. – “Globalization has dramatically increased inequality between and within nations, even as it connects people as never before. A world in which the assets of the 200 richest people are greater than the combined income of the more than 2bn people at the other end of the economic ladder should give everyone pause.”
  • Ignacio Ramonet, Le Monde Diplomatique, May 1998: – “The dramatic advance of globalization and neoliberalism…has been accompanied by an explosive growth in inequality and a return of mass poverty and unemployment. The very opposite of everything which the modern state and modern citizenship is supposed to stand for. The net result is a massive growth in inequality. The United States, which is the richest country in the world, has more than 60 million poor. The world’s foremost trading power, the European Union, has over 50 million. In the United States, 1 per cent of the population owns 39 per cent of the country’s wealth. Taking the planet as a whole, the combined wealth of the 358 richest people (all of them dollar billionaires) is grater than the total annual income of 45 per cent of the world’s poorest inhabitants, that is, 2.6bn people.”
  • “Poverty in an Age of Globalization “, The World Bank ,October 2000 – “The gap between the richest and the poorest countries has progressively widened (for example, doubling between the top 20 and bottom 20 countries over the past 40 years — figure 2) as a significant number of countries are falling further behind compared not only to industrial countries but to other developing countries. The income distribution between countries has consequently worsened (figure 3).”
  • Adrian Boutureira. “The Hidden Costs of Free Trade”. The Boston Globe. November 5, 2007 – “Latin America is infamous for having the most unequal income distribution in the world. In Peru, the meager income growth of the last few years has not been shared equally. Peru’s capital, Lima, the country’s most densely populated city, has experienced growth at a rate twice that of the rest of the largely rural country. This manifests itself in limited access to critical services, including healthcare. According to the United Nations’ Food and Agriculture Organization, nearly 15 percent of Peru’s population is malnourished.”

The absolute gap in living standards between today’s high income countries and most developing countries has continued to rise

Global inequality risen particularly in countries exposed to international trade


See also