Imports from the global South are thought to increase inequality in developed countries

 

Imports from the global South are thought to increase inequality in developed countries due to the competition they pose to domestic industries, leading to job losses and wage stagnation among low-skilled workers. This exacerbates income inequality as the benefits of globalization primarily flow to capital owners and highly skilled workers.

Exports to the global North are thought to increase inequality in less-developed countries by reinforcing a pattern of unequal exchange, where raw materials and low-value products are exported while high-value manufactured goods are imported. This perpetuates a cycle of limited economic diversification and dependence on primary commodities, leading to lower wages and limited opportunities for upward mobility.

To alter the relationship between imports from the global South and income inequality in developed countries, institutions should focus on implementing policies that support workers affected by globalization, such as investing in retraining programs, providing income support during transition periods, and strengthening labor market regulations. Additionally, policies that promote inclusive growth, such as progressive taxation and investment in education, can help redistribute the benefits of globalization more equitably (Alderson & Nielsen, 2002).

EU integration should alter the relationship between exports to the global North and income inequality in less-developed countries by promoting economic diversification and reducing the reliance on primary commodities. This can be achieved by providing support for industrial development, improving infrastructure, facilitating access to credit, and promoting technology transfer. By enhancing the capacity of less-developed countries to produce higher-value goods, EU integration can contribute to reducing income inequality and fostering sustainable economic growth (Mahutga & Jorgenson, 2016).