U.K: The Affect of Globalization on Poverty

U.K: The Affect of Globalization on Poverty

By Hwaa Irfan

 

The Joseph Rowntree Foundation released a March 2011 report entitled: Globalisation, UK Poverty and Communities. Whether the study will have any impact on policy decisions in the UK is left to be seen, given the report only reveals a living reality for many. Focusing on local communities and those on a low income, the study highlights the commonalities experienced in globalized communities elsewhere particularly when it comes to the increased cost of the basic essentials, and the growing sense of job insecurity. Looking at three British local communities: The Heathrow Village, North East Lincolnshire, and Greater Glasgow; the paradigm shifts that many have fallen prey to shows a very different world that is lived in compared to 20 years ago. The report pinpoints the process of globalization, and new technology has playing an important role in these changes. However, instead of the promised increased wealth of the many, there has been a growing low income labour force particularly in developing countries referred to as “emerging economies.”

Employment

Meanwhile there has been a growth of a highly educated workers represented by a doubling of university attendance with 63 million global students in 2005. With more and more multinational companies, the workforce too is regarded as a global not a local entity, widening the choices for companies, increasing workforce mobility, but reducing the options on a local scale. Over 5.6 million Brits live abroad, half of which have migrated for employment reasons.

The current global economic crisis which began in 2007 has naturally had a serious impact, the nature of which has been much underplayed by governments worldwide given the extent of the serious structural problems with the mechanisms that create the current global financial systems. In U.K. terms unemployment increased from 1.5 million in 2007 to 2.5 million in 2009. Entrenched unemployment has become more likely – a volatile situation that falls in line with the U.K.’s level of integration into the world economy, exampled by the Lindsey Oil Refinery, whereby through a subcontractor, less qualified Italian employees were willing to work at a lower rate than U.K. workers against the collective agreements of unions in the U.K. This also includes fewer benefits as migrants are not only more likely to work for less, but are also more likely to expect a pay rise, or go on sick leave.

Unemployment increased significantly, from just over 1.5 million in mid-2007 to almost 2.5 million by the end of 2009.

There is also less likely to be long term employment, and opportunities for young people, with more short tern contractual work. Regarding employees as cogs in a wheel in this way, is far from good investment, but that is not a priority if as an employer one has no commitment to the local community/communities. It is a cost deferred to the government, which will only have to pay out for increased social welfare and the other societal ills that goes with poor self esteem: mental health, health, broken homes, and crime. It is also the least convincing approach to encouraging children to stay in school and complete their education if all they see around them are older siblings and their peers unable to get employment or with limited employment choices.

Globalized companies were hit harder by the current economic crisis, but were more able to cope through a series of strategies like diversification of products, new markets, cutting overhead costs, staff lay-offs, reduced working hours, and limiting pay rises, but this did not translate to their local communities, especially when Britain has lost an estimated £100bn annually from multinational companies that escape paying the corporate tax.

The Cost of Living

The report gives the following influencing factors on U.K. food prices:

  • The capacity of food production to meet growing world demand – the rate of growth in global crop yields.
  • There are competing pressures on the use of land, for example the rapid rise in demand for biofuels.
  • There is increasing involvement by multinational companies in large-scale and often highly specialised food production by geographical area.
  • There is increased speculation on grain and other food items in commodity markets.
  • Energy costs are high and fluctuating, which affects food production and distribution costs.
  • Exchange rates influence UK buying power.

This may well demonstrate that commodity prices are not the only influencing factor, but what is the reality when all of the above is subject to commodities speculation?  It also does not acknowledge that one of the main factors in decreased food production is the lack of priority that governments gave the agricultural sector paying more attention to the agricultural arm i.e. food production of the multinational pharmaceutical industry which has become big business. It is such a ridiculous oversight that has left British people according to the report:

  • Buying cheaper, and sometimes poorer quality, food;
  • Growing more of their own fresh produce;
  • Shopping in cheaper supermarkets rather than local shops;
  • Switching to cheaper ‘English’ foods such as pasta (among households of Asian origin in Oldham);
  • Cutting down on travel and heating; and
  • Cutting turf for use as fuel (in the rural community in Northern Ireland, for example).

The good news from the above is that increasingly people are realizing after being entrained into believing that the state can do all, that they have to reclaim control over their own lives in order to give their lives meaning.

The report concludes with a series of governmental strategies to address the issue of poverty, along with the way in which Brits respond to conflicts abroad and British foreign policy, an interesting inclusion, which when one works hard long hours, and the income is barely manageable, one has a right to know how one’s government can do what it does abroad, while leaving their own in need in the name of austerity.

 

Sources:

Parson, A. “The Rise of British People Power.” http://dissidentvoice.org/2010/12/the-rise-of-british-people-power/

 

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