Transcript Social Inequality Chapter 2 – Economic Inequality

Social Inequality
Chapter 2 – Economic Inequality
Dr. Roderick Graham
Fordham University
This is a graph of the three areas of the SAT score by
Family Income…What’s going on here?*
*http://economix.blogs.nytimes.com/2009/08/27/sat-scores-and-family-income/
General Points
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Economic inequality is not the only dimension of
inequality….but arguably the most important
The concept of “class” is central to discussion on
inequality…but scholars do not agree on how to define
it
Scholars make a distinction between income inequality
and wealth inequality (wealth inequality being greater)
Inequality in the US is increasing, with people at the top
getting more and people at the bottom getting less
Two Views of Class Structure
Class Structure as Continuum
 Class is defined using three measures (income, education,
occupation)
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Because non-economic measures are used, we often call this
measure “socioeconomic status”, or SES.
There are no clear cut boundaries separating
classes…class differences are a matter of quantity
Most models that use SES have 5 to 7 classes
The Social Prestige Scale (SEI Index)*
Physician
College professor
Judge
Attorney
Astronomer
Dentist
Bank officer
Engineer
Architect
Clergy
Chemist
Nurse
School teacher
Author
Accountant
Actor
Computer programmer
Athlete
Bank Teller
Electrician
Police officer
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Secretary
Mail carrier
Plumber
Farm owner
Dancer
Mechanic
Bus Driver
Cashier
Gas Station Attendant
Taxi Driver
Garbage Collector
Janitor
Maid
Shoeshine
*National Opinion Research Center
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Two Views of Class Structure
Class Structure as Antagonistic Categories
 Marxian approach…people are in classes based upon
their common relationship to the means of production
 Classes are generally in conflict
 Classes are not in a continuum…there are clear breaks
between people with respect to attitudes, lifestyle, and life
chances
 A distinction is made between a class “in itself” and a
social class “for itself”
Comparing Views of Class by
Percentage
Socioeconomic Status (class as continuum)
Capitalist Class (1%)
Upper Middle Class (14%)
Middle Class (30%)
Working Class (30%)
Working Poor (13%)
Underclass (12%)
Class as Antagonistic Groups
Owners of means of
production (15%)
Employees in Contradictory
Locations (45%) – managers,
professionals
Workers (40%) –
nonowners, nonexpert,
nonmanagerial
Income Inequality
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Income = money from salaries, wages, social security, welfare
% of people making more than 100,000 has increased over the
last 30 years
If we compare ethnic groups, we see that blacks and Hispanic
have lower incomes than whites
If we compare households, we see that female headed
households have lower incomes than two-parent or male
headed families (why?)
The middle class (middle income groups) is shrinking!!
The upper class is growing
INEQUALITY WITHIN THE UNITED STATES IS GROWING!
A Quick Detour (Mean, Median,
Quintiles, and more)
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Let’s have a quick discussion on how sociologists make
numerical comparisons….
What is the difference between saying: “the mean
income of Americans….and the median income of
Americans…”?
What do we mean by quintiles?
Sociologists often make claims like “the richest 20%
owns 80% of all wealth to support inequality. How do
they calculate this?”
A Quick Detour (Mean, Median,
Quintiles, and more)
Incomes
1,000,000
970,000
80,000
70,000
55,000
55,000
33,000
12,000
10,000
5,000
If we calculate the mean (or average), we get $229,000
If we calculate the median (or midpoint) we get $55,000. The
median is the point at which half the values are above, and
half the values are below. Sometimes the median is
considered the “typical” value.
Quintiles simply mean breaking the values up into fifths.
Sometimes sociologists will say, “the richest 20%..” This is the
top 1/5 (quintile) of the population. If we get the total amount
of income for the top quintile (1,970,000) and divide this by the
total overall amount of income (2,290,000), then we get 86%.
Thus, “the richest 20% own 86% of total income”.
Income Inequality
Understanding Poverty
 Poverty is usually defined by income
 About 37 million people live in poverty
 Blacks and Hispanics have disproportionately higher
poverty rates than Whites
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What do we mean by disproportionate?
Income Inequality
Causes of Income Inequality
 Decline in earnings growth
 Rise in single parent households
 Changes in the age structure of the labor population
(older workforce)
 Declining unions
 Globalization
Wealth Inequality
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Wealth = value of homes, land, investments, savings –
debts
Wealth inequality is greater than income inequality
The richest 5th of the US population owns 85% of the
wealth…this is a VERY large percentage!! (fig. 2.4)
The richest 5th (20%) own an average of 2 million dollars
worth of wealth…while the bottom 40% own an average
of $2000.
Over the past 30 years, the rich have gotten richer and
the middle classes have seen their wealth decline
Who are the wealthy?
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Table 2.3
Blacks and Hispanics own considerably less wealth than
Non-Hispanic whites
Aside from owning their own homes, blacks and
Hispanics, on average, have almost NO wealth
In poor economic times, the gap between whites and
minorities tend to grow
Married couples have more wealth than female headed
households
Economic Inequality in a Global Context
US vs. Low Income Countries
 Low income countries (southeast Asia, Africa) have higher
rates of poverty and inequality
US vs. High Income/Industrialized Countries
 The US has more poverty and inequality
Economic Inequality in a Global Context
Effect of Globalization
 One view says that globalization is a tide that rises all
boats
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Countries have to compete with other countries and invest
wisely
Countries work to find profitable niches, resulting in more
economic prosperity
One view argues that globalization allows rich countries
to exploit poor ones
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Transnational corporations can move to other countries,
weakening labor unions and reducing wages
Trade is not truly free, as rich nations subsidize their
businesses
END