The growth of inequality in many countries and it's impact on U.S Research Paper

The growth of inequality in many countries and it's impact on U.S multinational companies and future strategies to deal with its impact - Research Paper Example (Buckley & Ghauri, 2004 p.86) United Nations Human Development Report (1999) said â€Å"Poverty is everywhere. Gaps between the poorest and the richest people and countries have continued to widen. In 1960, the 20% of the world’s people in the richest countries had 30 times the income of the poorest 20% . In 1977, 74 times as much. This continues the trend of nearly two centuries. Some have predicted convergence, but the past decade has shown increasing concentration of income among people, corporations and countries.† (Sala-i-Martin, 2002 p.1; Sala-i-Martin, 2002) Recent research by Soysa and Oneal (1999); UNCTAD (1999); Ram and Zhang (2002); Dollar and Kraay (2002); Bhalla (2002) show us that globalization raises the growth of average incomes in developing countries. However, the standard of living of the poor in these societies could decline if consolidation into the global economy negatively affects the distribution of income. Quite a few researchers conclude that the fears over globalization and letting foreign companies operate in domestic markets: multinational corporations further increase income inequality in developing countries, and thus, marginalize the poorest of the poor. (Brussman et al, 2005 p. 286). Peter Woicke, former executive vice president of the International Finance Corporation, says that 20% of the population in the world controls approximately 80% of the assets and that roughly 1.2 billion people live below the poverty line. Moreover, he says that most of the population growth over the next two to three decades shall take place in poor countries, which means another two billion people will be born poor. (Wilson & Lodge, 2006 p. 9) (Wilson & Lodge, 2006) He believes that this huge challenge of reducing poverty and inequality cannot be handled by the Governments alone. The private sector, particularly the MNC’s must come forward and share this burden and help countries develop socially as well as