Globalization, defined by Merriam-Webster as “the development of an increasingly integrated global economy,” is inextricably tied to the global inequality that has shaped the lives of billions across the globe. Economists Thomas Piketty and Emmanuel Saez suggest globalization has led to an increasing gap between the rich and poor. The 2022 World Inequality Report highlights this gap, finding that the globe’s richest 10% have 75% of global income while the poorest 50% of individuals share just 2% of income. The issue of global inequality is exacerbated by a number of factors like gender and race. For example, research shows that women make up just 27% of individuals in the top 10% of the income distribution and less than 17% at the 1% income level. According to the U.S. Bureau of Labor Statistics, racial discrimination is also prevalent in the discussion of global inequality, with white workers earning approximately 22% more than Black workers. Other data strengthens this finding, highlighting that a median Black family owns $24,100 in wealth compared to the average $189,100 held by a median white family. Globalization has certainly played a role in increasing this high level of global inequality.
Similar to almost all other aspects of our world, global inequality has been affected by the COVID-19 pandemic over the past two years. Development has been significantly set back; both the between-country wealth gap and the in-country income inequality are compounded by COVID-19’s effects, and low-income groups have experienced the worst job and income losses. The extraordinary nature of the pandemic will necessitate extraordinary solutions to build back from these setbacks and create a more equitable world.
Migration is not only critically important to the development of the solutions we need, but it also has the power to reshape how we conceive borders. Remittances sent by migrants are a significant source of income for those living in low- and middle-income countries helping to alleviate inequality, with $597 billion sent in transfers in 2021. However, migration significantly slowed during the pandemic, with movement to high-income Organisation for Economic Co-operation and Development countries falling by almost one-third. To revive this income stream, global migration will need to rebound and continue to provide access to overseas opportunities for migrants that will ultimately progress towards income convergence.
A number of academics, such as the renowned Serbian-American economist Branko Milanović, support the idea that the movement of people across international borders provides an opportunity for the improvement of livelihoods and reduction of inequality. In his research, Milanović articulates the shift in explanations for global inequality from the mid-19th century to the early 21st century. Through a combination of theory and real-world analysis, Milanović argues that global income inequality in the mid-19th century was between classes just as much as it was between countries.
On the other hand, global inequality in the early 21st century is primarily explained by location as income differences between countries. In fact, a whopping 85% of the current global Gini index of 65.4 points can be explained due to variation of mean incomes between countries, while just 15% is explained due to class. Milanović shows the extent of global inequality between countries, noting that the poorest 5% of Americans are better off than 60% of the world.
By providing this comparison between global inequality in the mid-19th century and today, Milanović contends that migration will remain “the key mechanism whereby incomes of the poor people in the world are to be raised.” Numerous studies complement Milanović’s assertion, such as the work of Harvard Kennedy School Professor Gordon Hanson, who calculated that the flow of Mexican migrants into the U.S. raises global income by an amount equal to 1% of the United States’ GDP— over $209 billion. As opposed to being seen as an issue needing to be solved, international migration in this context is seen as a potential solution to global inequality.
While there are many different avenues for helping to reduce global inequality — such as foreign aid and development projects — economic gains from such policies do not always reach the communities that need them the most. Money from foreign aid can end up in the hands of corrupt leaders. International financial institutions like the International Monetary Fund and World Bank have been criticized for problematic lending policies and histories. Funding spent on development can stay within the organizations based in high-income countries that fulfill contracts given for projects. Migration, however, sidesteps these intermediaries and provides a direct means to obtaining better incomes and job opportunities through which people can support networks back in their home countries through remittances.
Less constraint on global migration is not a fringe concept, and in certain cases, is a necessity. With Russia’s invasion of Ukraine, the safety and livelihoods of Ukrainians have become dependent on their ability to cross borders into neighboring countries like Poland, Slovakia and Hungary. Given the uncertainty of how long the conflict will last, many Ukrainians may need to find more permanent work in the EU. It is important that not only Ukrainians, but migrants from all over the world, have access to the best work opportunities for them, regardless of where they move to. This will help to ensure that countries that may be underdeveloped or facing conflict are not left behind compared to the rest of the world.
In the face of the increasing effects of transnational issues like the COVID-19 pandemic and climate change, it is clearer than ever that our fates are intertwined, irrespective of borders. Migration must be acknowledged and supported as an opportune tool to bridge the gap of inequality that permeates our global community.
The topic of global inequality and migration, among other pertinent transnational issues that have been magnified by globalization, will be discussed at the 2022 Norris and Margery Bendetson EPIIC International Symposium on Problems Without Passports from March 31 to April 2.