The “redistribution of wealth” has made an impact, and the non-winners in globalization are the Western World’s middle classes.
Globalization was the driving force that was supposed to lift millions of people out of poverty around the world – but it has come at the expense of the middle class and working class citizens, particularly in America.
According to Bloomberg, globalization created a massive labor supply shock, allowing corporations to use cheaper foreign workers. It benefited consumers in cheaper-priced goods, and pumped money into poorer economies, but, along the way, the middle class in developed nations have suffered as a result.
The biggest losers, or “non-winners” of the global income distribution where the “upper-middle class” and the working class.
“While globalization, immigration and the free market have strong support from the winners of these themes – the plutonomists and the highly educated, in our view they seem to have underestimated the frustration of developed market middle and working classes,” write Equity Strategists Ajay Singh Kapur and Ritesh Samadhiya. “We think Brexit could just be the first surprise in a re-calibration of the world away from globalization towards more inward looking policymaking. Away from Wall Street and more towards Main Street. Away from financial asset reflation to more income support and wage inflation.”
Washington Examiner explains it this way: Globalization has benefited almost everybody – except for the middle and working class in wealthy countries. Globalization opened up the U.S. working class to competition from the global middle class.
The U.S. leaders say free trade helped the whole world and makes the economy stronger – the working class guy sees the U.S. elites are getting richer from globalization, and they say, “screw you.” And they vote for Trump.
“This wave of globalization has wiped out totally, totally our middle class,” Trump said, at a speech in western Pennsylvania Tuesday. He promised to restore millions of lost factory jobs by backing away from a broken trade policy and bringing manufacturing back to America.
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