Standard of living in the globalised world

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batori.inWhat is standard of living?

Defining Standard of living is somewhat defining one of the easiest as well as most complex terminologies existing in the world. The usage of this term is frequent as everyone is after it. In the daily life one works to improve his standard of living; which could be by way of increasing the earning or spending capacity, accumulation of wealth, availing better services etc. Generally the standard of living is defined as the level of:

 1. Wealth

 2. Comfort

3. Material goods

4. And necessities available to a certain socio economic class in a certain geographic area.

The factors included in the above levels as provided are as follows:

  1. Income,
  2. Quality and Availability of Employment,
  3. Class Disparity,
  4. Poverty Rate,
  5. Quality and Affordability of Housing,
  6. Hours of work required to purchase necessities,
  7. Gross Domestic Product,
  8. Inflation Rate,
  9. Number of Vacation Days Per Year,
  10. Affordable (or free) access to quality healthcare,
  11. Quality and availability of education
  12. Life expectancy
  13. Incidence of Disease
  14. Cost of Goods and Services
  15. Infrastructure National Economic Growth
  16. Economic and Political Stability
  17. Political and Religious freedom
  18. Environmental Quality
  19. Climate and Safety, etc.

Standard of living: The reality and perceptions

It is generally presumed that the standard of living is synonymous or same as Quality of life. But in reality it is not same but somewhat related or close to Quality of life. A good standard of living as per the definition given above does not assure the better or good quality of life. One should not forget that the standard of living or Quality of life is always directed towards happiness. So the main objective should be that how the good standard of living can also ensure happiness.

What is Quality of life?

The answer comes with a big question mark because the proper answer is not available anywhere. I tried to answer this question through the research and observations made by Helena Norberg-Hodge, an analyst of the impact of the global economy on cultures and agriculture worldwide and also the pioneer for the localization movement. For writing this paper I took the help from her work “Economies of Happiness” and her book Ancient Future Standard of living in the globalised worlds: Learning from Ladakh, in which she showed the well being which was there in Laddakh before 1970’s and afterwards due to the standardization work happening there is facing a continuous fall in the social well being and happiness of the people. Before 1970 the people were deprived of many worldly luxuries but even though they were happy as they had enough leisure time, during this time Ladakh had experienced little change from year to year, from generation to generation but the quest of the external world to uplift the standard of living actually filled the minds of Laddakhis with inferiority complex and deprivations. As Helena Quotes “I asked a man in Laddakh to show me the poorest house in the village after sometimes he said that we don’t have any poor house; the same man ten years later was saying to some foreigners that it’s so good you have come to see us we Laddakhis are so poor”. The standard of living though as per the statistical data has increased by many folds but the real well being of the people were not attained.

This practical observation has certain things to notice, firstly that Uplift in the material standard of living does not ensure happiness and second there are some more components that are not visible but are affecting the overall Quality of life. And thus one may say that The Quality of life is a much wider term than the Standard of living as the standard of living is confined to only material standard of living whereas the Quality of life includes, other more intangible aspects that make up human life, such as leisure, safety, cultural resources, social life, physical health, environmental quality issues, etc.

The Equation can be made simple as follows:

Quality of Life= Material Standard of Living + Intangible standard of Living


Quality of life= MSL + ISL

So if we incorporate the intangible aspects then the whole equation will be equal to the Quality of Life


Measuring the Intangible standard of Living

The problem starts from the government, social and cultural aspects. The intangible aspects cannot be measured and if one try to measure it then the approach will be Quantifying them through judgments which is not only complex but also political thus controversial. The democratic setup wants the political leaders to quantify what they have contributed to the society and counting the material things not only becomes easy but also comes with physical facts and evidences which are not possible in case of Intangible standard of living. But One should note that these Intangible factors can act as a differentiators in case of the determining the standard of living of two countries having the similar material standard of living; quality of life factors may in fact make one of these places more attractive to a given individual or group.

What is Globalisation?

The paper will not be complete unless we give the definition of Globalization as well. In very simple words it refers to the interdependence and economic integration of the Worlds’ Nation.  One country try to exchange the benefits with the benefits the other country is offering. Or in other words one country provides the thing in which they are good at, and they trade for what they need.

The extent of penetration of Globalisation can be understood by the words of Kofi Annan, former UN Secretary General, “It has been said that arguing against globalization is like arguing against the laws of gravity.”

Globalisation and Standard of living

The globalization which otherwise used to be an economic concept has become now a social concept as well. Globalisation has created a Global Standards for the Standard of Living. Today a man desires car from Japan, Salary like USA, and house like in London. The standard of living is more into matching the standard a person is able to maintain in a particular geographical area. He starts his chase for the accumulation these factors which are acknowledged globally, and consequently loses those factors which are already available with him. For instance, A man leaves his family in an underdeveloped region for a metropolitan city with an expectation of improving his quality of life by availing the various opportunities available in the city. This may result in better accumulation of material things but at the same time his emotional and psychological well-being comes under question.

The human race earns money to increase his spending capacity and try to use this capacity towards satisfying his various needs and desires, but acquiring any commodity does not mean ensure the satisfaction and happiness of the man; for example, When a man buys a Ferrari, he is not buying just a car, he is actually buying speed. So speed is the factor which will give him happiness, but if the roads in his country does not allow his car to get the level of speed he desires he becomes unhappy, though in the eyes of the world he will be having a better standard of living.

One often forgets to match the local demographic, societal, and geographical factors with the things or commodities he is willing to buy to avail. For a better quality of life these aspects becomes very important. The concept which would fit here would be a combination of the Global products and standards with the local requirements and opportunities or in other words we require Glocal standards (Global+ Local).

Issues with the Standard of living in Globalisation

There are two issues this paper intends to throw light upon:

  1. Sweatshops
  2. Maquiladoras

 1.      Sweatshop

The modern management theories talks about the efficiency which means taking the maximum out of something but in reality the organizations intends to take more than maximum out of everything they employ in their organizations. This level of efficiency is good as far as machines and other resources are concerned but if the same theory is applied on the human race it becomes somewhat inhuman. The global economy offers huge opportunities to the big Companies to take the advantages of the loopholes of the other nation. Employing a child labour could be an offence in case of countries like India and USA but at the same time its legal in some of the African states. And if an organisation takes the advantage of this loophole and moves its facility to that African state where it can exploit the child labour, it will come under the purview of Sweatshop.

Generally, Sweatshop is referred to a manufacturing workplace that typically treats labour inhumanly, paying low wages, provide unsafe or harsh working conditions etc. These are commonly happening in the countries where the labour laws, industrial laws etc. are either not active or implemented.

Some of the big and reputed organizations are accused of using sweatshop. Such type of thing considerably has got an impact over the standard of living of the people working in these companies.

 2.      Maquiladoras

The three North American nations i.e. signed a treaty commonly known as NAFTA (North American Free Trade Agreement), which has allowed the free movement of goods and services in these countries along with the movement of labour.  The American labours are more expensive as compared to the Mexican labours. Thus in order to make the Mexicans to work in the organization the American firms moved to the southern border area to take advantage of the Mexican workforce. Similarly, the Mexicans in order to get job moved to the northern border of Mexico. Reportedly, a Mexican woman in these factories makes 1/6 of what an American would have made by doing the same job.

This has a two way effect, at one place it is a blow to the job opportunity available to American and on the other hand it is a threat to the Quality of life the Mexicans are entitled to get.

The practice of Maquiladoras is now prominent in all those countries which are bordering with a comparatively weak or backward nation.

The Resolutions to propose

The right Standard of living cannot be attained without having the proper Quality of life. The good quality of life is always directed towards Happiness, so is the standard of living. Thus the equation to propose here will be as follows:

Standard of Living = Quality of Life= Happiness

This simply means to extend the boundary of the Standard of living by adding the intangible aspects into the definition of it. It will not only make the things better for the human race but will also ensure the sustainable practices to be adopted.

It will be a proposal of this paper to all the mathematicians if they can develop a tool to quantify the immeasurable intangible aspects which make the definition of standard of living complete, so that they can be applied and implemented effectively.

Shad Ahmad Khan

(The writer is a Lecturer at Gaeddu College of Business Studies, Royal University of Bhutan)

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