Globalization has helped raise incomes almost everywhere since the 1980s


Globalization has helped raise incomes almost everywhere since the 1980s (animated gif)


Critics of globalization often assert that growth in cross-border trade and investment started a race to the bottom where countries undercut each other in wages and labor standards, leaving poor and rich alike worse off. But a race to the top would be a more accurate description, as almost every country is richer today than four decades ago, before globalization gathered momentum.

The United States, Western Europe, and other advanced economies were richer in 2000 than in 1980. Middle-income countries were growing, albeit more slowly, and China was making incremental gains as it opened its economy.

By 2019, the effects of globalization had been realized; middle-income countries unlocked higher growth rates, and lower-income economies, including China, India, and others in Africa and Asia, had made significant strides in raising their incomes and reducing poverty.

The gains made across the world's income distribution demonstrate that, contrary to what some believe, lower-income countries did not get richer at the expense of rich economies, nor did expanding global trade become a new form of colonialism, enriching high-income economies at the expense of the developing world. More open markets lifted incomes around the world, and recent attempts to reverse this economic opening risk jeopardizing that progress.

This PIIE Chart is based on Douglas Irwin's blog post, Globalization enabled nearly all countries to grow richer in recent decades. Produced and designed by Nia Kitchin and Oliver Ward.

Sign up for the PIIE Educational Resources newsletter for a roundup of the latest content geared towards students and educators.

More From