There is a considerable debate among economists about the extent to which globalization—and specifically the liberalization of trade and investment—may increase inequality. As discussed earlier, international investment leads to changes in the use of technology and may shift production—especially in lower skill sectors—into developing countries that have lower prevailing wage levels. The lowest wages may also be falling in industries struggling to compete with new imports, while higher-paying export industry jobs are increasing in number but remain unavailable to the relatively unskilled labor force.

These changes taken together mean that economies are putting a higher premium on skilled workers. This creates pressure to pay higher wages to skilled employees, while diminishing the value of lower-skilled workers. The net result globally has been a significant growth in inequality, both between nations and inside them.

Critics of that view counter that globalization has helped produce a significant expansion of global wealth, and that, in spite of a rapidly growing global population, the absolute number of people living in poverty has remained relatively constant. The question of the role that globalization plays in exacerbating inequality depends very much on how the question is asked. Data varies considerably by region and by what kinds of indicators are selected.

Even assuming that absolute poverty is decreasing somewhat while inequality is widening rapidly (that is, the rich are getting richer while the poor stay the same), some economists and sociologists also question whether an economic benefit of this character is outweighed by the political and social costs brought about by inequality. For more information on this controversial topic, see the section on globalization and inequality in the Development Issue in Depth.

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