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Political Science
Joseph Wong

Life is Unfair- Birdsall - income of poor families in U.S declining - richest people are increasing income in U.S. - crony capitalism- high concentration of wealth in asia - Russia/ east Europe end of capitalism = income gaps - Latin America- wealth and income gaps are largest - Rich get richer poor get poorer - Even though there is more democracy and free markets inequality is growing - Spread of democracy= more visible income gaps - Tech plays a large role in income gaps- makes situation worse - Income inequality in U.S. increasing - High education = econ success o Poor are at a disadvantage here - Forces of change like capitalism or global integration have also increased inequality - In china agriculture and other makets spur growth but large amounts of the population are left behind - Not likely that the poor will catch up to the rich - Inequality is nobodys fault cant be fixed in this life - History o History matters o Slave labour o Wealth in natural resources - Poors rational decisions o Predicatble human behavior o Rich and educated marry each other so do poor and uneducated o Rational differences= income inequality o Same thing happens with fertility- poor have more children o Poor women have more children- more help o East asia- decline in mortality and then decline in fertility which spread to poor - Prosperity o Produce inequality - Bad econ policy o Policies that hamper econ growth are the biggest cause for the poor o High interest rates o Price controls o Imposition of minimum wage o Trade protection o Bad policy = gov failure o Gov fails to invest in education o When adequate education is scarce there is not enough skilled workers - Protectionism o Developing coutnries that have been open to trade have the most growth and reduces global inequality o International trade and open markets are less of a problem than technology that favor skilled workers everywhere o Obstacles to imports fall and price competition increases prices drop o Also trade liberalization and open markets weaken unfair advantages enjoyed by rich and connected - Special worker o Presiden roosevelts new deal- set wage rate and labor standards o It meant that property rights remain protected in international trade o In developing countries even standards that don’t look so bad may hurt those they are mean to protect o Most standards including collective bargaining rights which might increase wages in some firm would affect only a small amount of workers increasing the gap o Loss of new jobs hurt the poor o Weak infrastructure and less education mean workers in developing countries produce less - Underpricing public services o Governemnts charge industries and houses a lot less for the services than they actually cost 0 to help the poor o Prices that are too low reduce the public supply of the underpriced service o Poor are always last in line- cant afford school - Laissez faire o Because trade protection and cheap public services can hurt the poor does not mean the inequality problem can be left to the market o It is a mistake for government to restrict and distort market activity but market forces cannot make this better o Every society has interest in avoiding the worst forms on inequality and justice – role for gov and the rich to ignore issues What does work - worker based growth o economic growth that is based on the intensive use of labor reduces income inequality o oil rich countries have grown quickly but this does not last o worker based growth is encouraged by avoiding the wrong policies- those that directly or indirectly raise employers cost of labor o U.S. should encourage more hiring of unskilled workers by reducing payroll tax rates - Education o Educatin and skill represent a kind of wealth o They are key assets and once acquired cannot be taken away even by powerful people o Education is more important that land stocks or money o Predictor of childs education is her parents education and income o The poor especially in developing countries are last in line for education - Democracy o Low levels of income inequality in china, cuba and society union prove that at least authoritarian govs can produce equality - Opportunities not transfers o Transfers and income subsidies to help the poor make sense they aren’t long term solutions o Because the poor tend to be less organized and politically effective, redistributive programs often respnd to more vocal entrenched interests Does electoral democracy boost income inequality – nancy - inequality is a constant in political life - inequality is clearly increasing - public and private institutions have created a wave of - inequality more easily discussed - the term has roots in math - inequality makes a difference- humans differ in many ways - define inequality as the condition of being unequal as regards the command of any resources deemed valuable for human well being - Resources include- physical strength, political rights, wealth, income etc - Empericits write about political inequality, gender inequality and economic inequality - Economic inequality is a measure of the distribution of material resources that emerges from the ranking of all the economic actors in a unit of interest Barbie - In Canada the price of a Barbie is $9 - How much will china make for the sale of this Barbie – about 35 cents which goes to peasant women - China has cheap labour - Complicated trade rules o China gets its share of the Barbie from minimal taxes and licensing fees as well as in worker wages o Because of the trade rules china is charged with an export value of $2 by the time the doll reaches the U.S. o Other than china many other countries contributed to the making of this doll- Saudi supplied the oil, Taiwan used the ethylene and japan supplied the nylon o Each country took a cut along the way of the dolls $2 export value o China has surpassed japan as the country with the largest trade imbalance with the U.S. o China of course cried foul, saying that the U.S. figures failed to take into account the value added to the product in HK - 25 billion misunderstanding o Large gap divides the U.S. estimate of its trade deficit with china and the calculation of china’s trade o China said the deficit was 8.6 billion o Some say there are errors in calculation by the U.S. and china o They say it is due to the expanding role of H.K as entreat in the china trade - This problem is not only with Barbie but with other Chinese made products like shoes, clothes, etc - Chinese government says 75% of its products exported to the U.S are processed- raw materials come from elsewhere - China contributes the labor - The toy makers- young peasant women in china make about 30 a month - Barbie accounted for 1.4 billion in sales for Mattel - Optimum locations o All Barbie dolls according to Mattel made in 4 Asian factories- two in china and one in Indonesia and one in Malaysia o Barbie not made in the U.S. o First doll made in japan but then the economy took off and labor costs became too expensive for the production so the factories were built in cheap labor countries - China factories o Each factory has about 5500 workers o The $2 export value on the Barbie doll gets broken down into 35 cents for labor, 65 cents for materials and 1 dollar for transportation - Labor is critical o Most critical part of making process o Enormous and cheap labour needed o Typical women is unmarried between 18-23 who will work for 2-5 years o They want money for a dowry Hamilton – week jan 30 th - - in every country agriculture is the most beneficial and productive object of human industry - Manufacturing establishments not only occasion a positive augmentation of the produce and reven
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