Policymakers and Academics Explore Poverty and Inequality at Globalization TrendLab 2013

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Lauder Institute hosts conference to discuss strategies for overcoming poverty in industrialized, emerging, and developing countries.

The Wharton School’s Lauder Institute at the University of Pennsylvania hosted the third annual Globalization TrendLab conference April 8-12, 2013. The 5-day meeting entitled, “Poverty & Inequality: Persistent Challenges and New Solutions,” brought together leaders from academia, business, government, multilateral organizations, and nonprofits to explore the current state of the world’s population living in poverty and the globalization trends that influence the state of inequality around the world.

“We are witnessing the first decline in global inequality since the 1820s,” says Branko Milanovic, one of the World Bank’s foremost experts on global poverty and inequality. “It’s a massive rebalancing between East and West, and between South and North driven by the growth of the emerging economies.” While poverty in developing countries has declined, income inequality within countries has risen in many parts of the world. The distribution of income in China, India, the Philippines, Egypt, Kenya, Germany, Poland, Sweden and the United States has increased over the last two decades. By contrast, in Brazil, Mexico, and Turkey it is lower than ten years ago.

“While the number of poor people has been cut in half over the past 20 years,” says Milanovic, “there is still enormous inequality as well as poverty in the world.” Most people in extreme poverty live in South Asia with 570 million and Sub-Saharan Africa with 396 million. East Asia has a population of 284 million and Latin America has roughly 50 million people living in extreme poverty.

Experts discussed how some disparities have widened, pointing to technological advances, which according to a recent IMF study, favors skilled workers over unskilled ones. Financial globalization has also contributed. In general, “integration into the global economy has helped reduce poverty around the developing world, and it has also cut income disparities across countries,” said Jack Goldstone, Professor of Public Policy at George Mason University.

The conference also explored how improvements in employment can be part of the solution. International experiences when it comes to the creation of “good jobs” show that it is not only possible to remain competitive in the global economy with high wages but that nurturing workers’ skills and paying them well is one way of being competitive. “The transformation of the German economy over the last decade and the rise of South Korea as a global producer of high-end goods are frequently mentioned as examples to emulate,” says Wharton Professor and Director of the Lauder Institute, Mauro Guillén.

"Full employment is only part of the solution as witnessed by the fact that during the 1990s, a very strong labor market, just under 20 percent of adults were in low wages poverty level jobs,” argues Paul Osterman, Professor at the MIT Sloan School of Management. “Improving education is necessary but not sufficient either. The key is to improve the quality of jobs, to help companies upgrade the skills of the workers they employ.”

Healthcare is also major indicator – and generator – of inequality. “There is a medical-poverty trap,” says Terry McGovern, Professor of Population and Family Health at Columbia University. “It’s a self-perpetuating cycle that begins with poor health among the poor, and leads to fewer and worse labor market opportunities and reduced income. Education, income, living conditions, housing, and sanitation all affect health, and health in turn affects them.” Experts also discussed other health-related issues that frequently get lost in debates about healthcare reform. For example, in several African countries gender-based violence causes more deaths than cancer, malaria and road accidents combined.

While the challenges in the plight of poverty are massive, conference attendees offered numerous solutions. Improvements in labor markets, healthcare sectors, and financial systems can all contribute to the reduction of inequalities and must be investments for all countries.

A full copy of the report from the conference can be downloaded at: http://lauder.wharton.upenn.edu/pages/research/conferences.php

About the Lauder Institute:

The University of Pennsylvania’s Lauder Institute, founded in 1983, combines a world–renowned Wharton MBA with a Master’s in International Studies. Advanced language and foreign culture training, a two-month in-country immersion program, and a Master’s Thesis from the School of Arts & Sciences all prepare Lauder Fellows for the ever-evolving global economy. This year’s offerings include the new Global Program for students who are already fluent in several languages. Graduates join the diverse, supportive and committed worldwide Lauder community – continuing a nearly 30-year tradition of international business leadership. The Lauder Institute also offers an MA/JD joint degree. For more information, visit http://www.lauder.wharton.upenn.edu.

About the Wharton School:

Founded in 1881 as the first collegiate business school, the Wharton School of the University of Pennsylvania is recognized globally for intellectual leadership and ongoing innovation across every major discipline of business education. With a broad global community and one of the most published business school faculties, Wharton creates ongoing economic and social value around the world. The School has 5,000 undergraduate, MBA, executive MBA, and doctoral students; more than 9,000 annual participants in executive education programs; and a powerful alumni network of 91,000 graduates.

About the School of Arts & Sciences:

The School of Arts & Sciences provides a foundation for the scholarly excellence that has established Penn as one of the world’s leading research universities. The School enrolls 6500 undergraduates, admits approximately 250 students each year into its 32 doctoral programs, and offers a wide range of programs for lifelong learning. International studies are a vibrant enterprise at the School of Arts & Sciences. In addition to offering instruction in 50 languages, the school is home to an array of centers, programs and institutes dedicated to the study of world regions and contemporary global issues and conflicts.

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