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Lesson 5: Social Class and Inequality

Social ProblemsRobert Wonser

Social Class

Groups stratified by their access to resources

Resources may include wealth, income, education, employment, land

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Understanding InequalityInequality is the unequal access

to scarce goods or resources. It is the result of abundance. It is found in most, if not all,

societies. It is a question of how unequal

a society is. How unequal is the United

States?

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How does the US compare to other nations?

Percentage of wealth held in 2000 by the Top 10% of the adult population in various Western countries

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International Comparison of Poverty Rates among Wealthy Countries

Defining Poverty

Absolute measure

Based on a threshold, usually annual income Criticisms?

Relative measure

Compares person or group to the rest of the community or society Criticisms?

Poverty Threshold

Takes age, family size, and number of dependent children into account when determining amount of people living below the poverty line

Example:

In 2012, poverty threshold was $23,283 for a four person household with two children under 18

$18,498 for a three person household two children.

Can you get by on poverty wages?

Extreme Poverty Neighborhoods

Areas with poverty rates of 40+ percent

These areas often have higher crime, poor health outcomes, and fewer education and job opportunities

Karl Marx’s (1818-1883) Views on Class

Class based on ownership of the means of production

Capitalists own factories and other mechanisms to produce goods

Working class sells their labor to capitalists in exchange for wage

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Social Classes in the United States

The upper class (capitalist class): Wealthiest people in a class

systemMake up about 1% of the U.S.

populationPossess most of the wealth of the

country

The United States is a Rich Society?

Only when you include those at the top. Exclude the top quintile and the picture is different.

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Who are the 1%?

With 376,076 members, the largest single group in the 1 percent are those who listed their occupation as a manager.

Lawyers who work on Wall Street are twice as likely as those in general practice to make the top 1 percent.

Physicians who work primarily in doctor's offices are somewhat more likely to make the cutoff, though all doctors are well-represented in the group.

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In 2010, the top hedge fund manager earned as much in one HOUR as the average (median) family earned in 47 YEARS.

The top 25 hedge fund managers in 2010 earned as much as 658,000 entry level teachers.

In 1970 the top 100 CEOs made $40 for every dollar earned by the average worker. By 2006, the CEOs received $1,723 for every worker dollar.

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How are stocks distributed? Dow closed

today (3/11/2013) over 14,400.

A new record….

Whose wealth is this measuring?

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What’s the Dow at Recently?

The Dow closed on August 26, 2014

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Ratio CEO pay to Workers’ Wages

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Social Classes in the United States

The upper-middle class: Professionals and managers Make up about 14% of the U.S.

population Benefited the most from college

The middle class consists primarily of “White collar” workers Have a broad range of incomes Make up about 30% of the U.S.

population

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Social Classes in the United States

The working (lower-middle) class: “Blue-collar” or service industry

workers Less likely to have college degrees Make up about 30% of the U.S.

population

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Social Classes in the United States

The lower class (the working poor):Many poor people who

typically have lower levels of education than other classes

Make up about 20% of the U.S. population

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Max Weber (1881-1961)

Three aspects of stratification

Class Position in economic sector

Status Social position based on honor,

education, prestige, religion, and other characteristics

Power Political connections and affiliations

Income vs. WealthIncome

Money from sources such as earnings, unemployment compensation, social security, interest and dividends, and rental income

Wealth

Family or household’s net worth, the difference between the value of these assets and the amount of debt

Other Dimensions of Inequality

Race/Ethnicity

Gender

Access to healthcare and health insurance Many negative health conditions associated

with poverty

Likelihood of being imprisoned

Education

Access to housing

Functionalism and PovertyDavis and Moore “Some Principles of Stratification” (1945)

Some positions in a society are more specialized and valuable

Only a few have the talent for more important positions

Learning those skills require sacrifices, must receive more resources and rewards to compensate

Different positions in the social hierarchy have different levels of prestige and esteem

Social inequality inevitable and functional

Functionalism and Poverty

Herbert Gans (1971)

Poverty can have positive functions

Get “dirty work” done cheaply

Encourage purchase of lower quality products

Give higher status to others (someone must be at the bottom)

But functions of poverty can be both economically and morally costly

Poverty and Symbolic Interactionism

Oscar Lewis’s Culture of Poverty Thesis (1969)

The poor hold a unique set of values and beliefs that makes it difficult for them to escape poverty Sense of powerlessness Feelings of inferiority Lack of work ethic

Poverty and Conflict Theory

Groups have different interests that come into conflict with one another

Poverty is systematic

Karl Marx

Workers alienated from their labor because they have little say in what they do in the production process.

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Income, Net Worth and Financial Worth

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Distribution of Net Worth

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Financial (Non Home) Wealth

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Net worth and financial wealth distribution in the U.S. in 2010

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Wealth distribution by type of asset, 2010

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Share of wealth held by the Bottom 99% and Top 1% in the United States, 1922-2010.

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Distribution of income in the United States, 1982-2006

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Top income shares in the U.S. and Sweden, 1950-2009

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CEOs' pay as a multiple of the average worker's pay, 1960-2007

37CEOs' average pay, production workers' average pay, the S&P 500 Index, corporate profits, and the federal

minimum wage, 1990-2005 (all figures adjusted for inflation)