Introduction • Our culture encourages the attitude that poverty and wealth are the consequence of individual effort rather than structural conditions. • For this reason, being poor carries a stigma in which people shun the poor as “lazy” or “ignorant.” • Because of this American stigma, the American poor may often internalize this attitude into their own self esteem. They may develop low self esteem and they may adopt a fatalistic attitude about life. • Being poor in this country is more psychologically stressful than in other nations, due to the stigma and the American stereotypes of the poor. • Also for this reason, America has the least developed welfare system of all industrial democracies.
Dimensions of Social Inequality • Historically, the U.S. practiced a system of internal colonization against racial minorities and women. This partial-caste system placed minorities into the lower classes. • Meanwhile, white males were subject to a class system of stratification, which made it easier for them to experience upward mobility. • The legacy of this dual system was carried into the 20th century, and even today the same groups remain highly stratified, with white males at the top. • Ironically, Americans tend to underestimate the extent of American stratification. Why?
Why do Americans Underestimate U.S. Poverty? • 1. The U.S. embraces the ideal of equality, despite the real culture of racism, sexism, and classism. We want to believe that America has been the land of equal opportunity for all. • 2. The U.S. emphasizes the ideal of individualism and individual achievement, thus obscuring the ascribed features of our class system. • We ignore the fact that birth is the single best predictor of one’s life chances. • 3. The people we spend our time with tend to be of similar class standing – and we rarely glimpse others’ lives. • 4. Compared with other countries, our overall standard of living is relatively high, making it seem like everyone is better off. • In fact the poor in American are worse off than the poor in most other industrialized nations due to our weak welfare state.
Measuring Inequality: Income and Wealth • Income refers to salary and wages. • It is not the best indicator of social class. The government keeps records about yearly income for taxation purposes. • Wealth refers to accumulated assets, including income, other money, and property. • It is a much better indicator of social class, but we know relatively little about American wealth because the wealthy do not like to share information about their wealth. The government does not keep many records about family wealth – and that is how the rich want it to be.
U.S. Income • In 2004, the median U.S. family income was roughly $55, 000. • Among whites, the median family income was roughly $61,000, while for blacks the median family income was roughly $35,000. This large difference has a lot to do with the historical treatment of internal colonization against blacks and other racial minorities. • The practice of racial discrimination was finally outlawed by the 1960s, but its legacy still affects racial minorities. • Unlike Europe, the U.S. society never had a titled nobility system that placed a caste system on the whole population, so the experience of whites in the U.S. has generally been upwardly mobile thanks to the expanding American economy.
2003 Distribution of Income and Wealth in the U.S. (Figures are by percentage, which add up to 100%) While income is highly stratified in the U.S., wealth is extremely stratified. The top 20% of U.S. families own 80% of all wealth. This is remarkable in our so-called “equal opportunity” society.
U.S. Income Data • From the chart on the earlier page, it is clear that the bulk of U.S. income is earned by a small portion of American families. • 71% of all income is earned by 40% of U.S. families. • This income disparity increased during the 1980s under the economic policies of Ronald Reagan. • President Reagan’s tax policies favored the rich, leading to redistribution of income toward the upper class. During the 1980s, the top 1% of Americans doubled their incomes while the rest of Americans either lost income or barely held their own. • President Reagan cut welfare services aimed at the poor. • During the 1980s, there were harmful structural shifts that affected the working class and the poor particularly, including plant migration, downsizing, decline of labor unions, automation, etc. • The current policies of President Bush have led to further polarization between the rich and the poor.
American Wealth • Wealth is a more important indicator of social class. It includes all of the assets a family owns. We know relatively little about American wealth because that is how the rich want it to be. Nevertheless, researchers have been able to get a fairly good glimpse into American wealth: • 40% of Americans have no wealth; • 20% of Americans have negative wealth, meaning they owe more than they are worth; • The top 20% of Americans enjoy the vast bulk (84%) of American wealth. • Note: the assets of the rich (homes, land, artworks, businesses, etc) tend to appreciate, while the assets of the poor (cars, clothes, appliances, etc) tend to depreciate over time.
What is the significance of severe inequality? • 1. Political Power. • A small percentage of American families have extraordinary influence over the economic and political policies of this country. • Political policies are skewed to benefit the rich more than any other group. • As Thomas Jefferson noted, our democracy requires that wealth be spread out, not concentrated. • Today many argue that we live in a plutocracy – government run for the benefit of the rich.
What is the significance of severe inequality? • 2. Job quality. • The quality of work varies by the type of job: • White collar jobs confer higher prestige • Mental emphasis, therefore more stimulating • More autonomy • Lots of upward mobility potential • Higher pay • Blue collar jobs confer lower prestige • Redundant, tedious, boring, dull • Constant supervision means they are disempowering and stressful • Less upward mobility • Lower pay • While white males have been steered toward white collar jobs, racial minorities have been steered toward blue collar jobs, and women have been steered toward pink collar jobs. Pink collar jobs are service sector jobs that are sex-segregated and low paid.
Ascription and Social Class • All systems of stratification contain a mixture of caste and class. Today, the U.S. system emphasizes class based stratification, yet ascribed features remain deeply embedded in our system. • Ancestry • The single most important factor influencing our life chances is our birth into a particular family. Our families ascribe our initial location in the stratification system. • A child who is born rich will likely stay rich (no matter how dumb they are) and a child born poor will likely stay in the lower classes. • Our schooling, access to jobs, and income are directly affected by our parent’s social standing. • Roughly halfof the richest people in America inherited their wealth – they did nothing to “merit” it. • Wealth (or lack of it) is transmitted from one generation to the next via inheritance, helping to explain the persistence of social stratification.
Race and Ethnicity • Today the median family income for whites is roughly $61,000, yet for blacks it is only about $35,000 or 57% that of whites. • Roughly half of all black families are headed by a single woman. • Even when comparing black and white couples, black families still earn only 84% of their white counterparts.
Gender • Households headed by women are 10 times more likely to be poor than those headed by men, due largely to patriarchy and sex-segregated job placement. • Historically women have been steered toward pink collar jobs like secretaries, nurses, food service workers, health care workers, airline stewardesses, and public school teachers. • Over the last 40 years • 1. A larger percentage of women have experienced sharp downward mobility due to divorce. • These are mostly mothers and this is is one of the key causes of the feminization of poverty. • 2. Yet, a larger percentage of women have also experienced upward mobility due to the rise of feminism, changing values, and women’s new upward mobility in the job force.
American Social Classes Population percentage Yearly Income (appox) Upper class Upper middle class Lower middle class Working class Lower class
American Social Classes • Defining social classes is difficult and a bit arbitrary. There are not clear social class lines, and there is a lot of status inconsistency in the U.S. • Macionis identifies 4 basic social classes: • Upper • Middle • Working • Lower
The Upper Class • About 3 to 5% of the American population. • Family income is roughly $170K or more. • Lots of inherited wealth. • Tend to be top executives and senior officials. • Highly educated at the best schools. • Mainly white, Anglo-Protestant. • Very exclusive, especially among the top 1%, who tend to live in private, gated communities, to attend exclusive country clubs, to send their kids to exclusive schools. • The rich tend to be social liberals, yet they are economic conservatives who favor laissez faire government.
The Middle Class • Roughly 40 – 50% of the population, if you count both the upper middle (15%) and the lower middle (25-35%). • Incomes range from roughly $40-170K, depending on whether it is lower middle or upper middle class. • The upper middle class is the source of most TV shows that portray an idealized middle class (Cosby Show) lifestyle. • The middle class tends to be relatively highly educated, with most attending or graduating from college. • Upper middle class jobs are college graduate jobs that confer a higher-order professional status on the worker (doctors, lawyers, engineers, etc), while lower middle class jobs are lower-order professionals like teachers, managers, etc. • The middle class tends to be socially liberal, but are moderates on economic issues.
The Working Class • Represents roughly one-third of the population. • Income is roughly $25-40K per year. • Little or no accumulated wealth, other than a home (if they are lucky). • Their jobs tend to be blue collar and pink collar jobs. Working class workers tend to be highly prideful of their work ethic, despite their relatively lower pay. • Especially vulnerable to job loss, downsizing, etc. • Less educated. Many cannot afford 4-year college, so they aim for trade schools. • Tend to be socially conservative, yet economically liberal. • Fairly strict in child rearing.
The Lower Class • Roughly 20% of the American population. • Characterized by unstable jobs, or being too old, young, or sick to work. • Disproportionately single mothers (and their children) and racial minorities. • Jobs tend to be menial with low pay. • These families typically earn less than $25K per year. • Stigmatized, ignored, and segregated by the culture. • Low levels of education; lots of life stresses. • Concentrated where unemployment is high: • 1. Inner cities. • 2. Rural areas. • Tend to be socially conservative, economically liberal.
The Difference Class Makes • 1. Class and Health • Poor infants are several times more likely to die during their first year due to their life conditions. • Poor people are more likely to get sick or injured and more likely to lack resources to heal. • Nutrition is one key to longevity, and poor people tend to have relatively poor nutrition. • The overall result is that poor people tend to live shorter lives - significantly shorter.
The Difference Class Makes • 2. Class and Values • Cultural values and patterns tend to vary by social class. • Generally the more educated classes are more socially tolerant and less bigoted. This is one of the effects of college education in particular. • The working and lower classes, because they are less educated, tend to have more prejudices and are less tolerant of social differences. They place more emphasis on conformity and obedience and tend to be more strict in their child rearing. Their husband-wife relationship is more likely to be traditional values oriented, with patriarchy favored.
Social Class and Politics • Generally, the higher the social class, the more likely they will support conservative economic policies that do not threaten the status-quo distribution of wealth. • The lower social classes, on the other hand, tend to be more in favor of the redistribution of wealth, toward welfare for the poor, etc.
Social Mobility Patterns • The U.S. has a lot of upward mobility, like other societies, due to favorable structural economic forces. • Most mobility has been structural, upward, and inter-generational. • Intra-generational mobility occurs, of course, but it tends to be within-class mobility, where one moves up a bit with small increases in salary. • About 40% of the sons of blue collar workers attain white collar jobs, while about 30% of the sons of white collar workers move downward into blue collar jobs.
Mobility Patterns • 1. Lots of mobility is occurring. • 2. Until the 1970s, most mobility was upward, due largely to structural expansion of the economy. • 3. Intra-generational mobility has been incremental rather than dramatic. It is extremely rare for one to go from “rags to riches.”
Mobility Patterns - Race Mobility patterns vary by race. • In 1970, blacks earned 60% of white income. • In 1980, blacks earned 65% of white income. • In 1990, blacks earned 58% of white income. • Notice that this drop occurred during the Reagan Era – the era of economic conservatism. • In 2000, blacks earned 64% of white income. • In 2002, blacks earned 62% of white income. • Black income has continued to drop under the policies of George Bush, an economic conservative.
Mobility Patterns - Sex • Women’s mobility has shifted dramatically in two ways. • 1. Our high divorce rate makes divorce for mothers economically traumatic, with these mothers (and their kids) likely to experience downward mobility. • The income of single-parent families plummets by more than 1/3rd within the first few months after divorce or separation. • The increased risk of poverty for divorced mothers refers to what is called the feminization of poverty. • Women represent 61% of the poor. • 2. While women are concentrated in pink collar jobs, they are breaking out of the old caste system of gender segregated jobs, thanks to feminism and changing values. • In 1980, women earned 60% of the income of men. • In 2004, women earned 77% of the income of men (due largely to the drop in men’s wages over this period).
The Middle Class Slide • By 1972, upward structural mobility ended for most and incomes stagnated, causing many to wonder if the American Dream of upward mobility is still a reality. • Between 1958-1973 the average 50-year old male’s income rose from $26K to $38K. • Between 1973-2001, his income stagnated while his housing and health care costs shot up. • The security attached to middle class jobs has eroded due to changes in the economy. American corporations no longer guarantee job stability for American workers. • Since 1972, new jobs typically pay less, with fewer benefits, causing downward structural mobility.
Global Perspective • Underlying the middle class slide is a global economic transformation in which many unionized blue collar jobs (with good pay and benefits) have migrated overseas to non-unionized, low-pay regions like Red China. These regions typically pay extremely low wages, with few worker benefits. • While American corporate executives benefited from their decision to do this, the average American worker has suffered. • The U.S. is no longer the dominant maker of cars, TVs, stereos, and other key goods. • Instead, the U.S. is consuming the goods made in China and other industrializing nations. This contributes to a massive trade deficit. • The fastest growing jobs in the U.S. are typically in the low-paid service sector: clerks, truck drivers, aides, cashiers, etc. • Today, the only class experiencing dramatic upward mobility is the class that least needs it – the rich.
The Middle Class Slide • The American Dream has eroded • 1. Loss of stable, upwardly mobile jobs. • 2. Decline of stable nuclear suburban families. • 3. Increases in the cost of college make it more prohibitive today. • 4. Home ownership rates declined from 66% to 64% during the 1980s. • Today it takes 2 wage earners from the same household to earn what a typical white male eared in 1950. • The result has been an increase in social problems like • Divorce and family instability • Crime and adolescent pessimism • Higher suicide rates for those who are stressed • More poverty, combined with less welfare supports
Poverty in America • Social stratification creates “haves” and “have-nots.” Poverty is the consequence of stratification. All capitalist systems produce at least some poverty. • Poverty can be looked at in two ways: • 1. Relative poverty. This refers to the deprivation of some compared with others. Even in a wealthy society, there will be some who are relatively less well off. • 2. Absolute poverty. This refers to deprivation of resources that is life threatening. This is far more serious. However, this type of poverty can be eliminated if we wanted to.
Extent of U.S. Poverty • The official poverty threshold for a family of 4 is roughly $19,307 per year. • This threshold is highly controversial, because it is clear that this is an extremely low amount for a family of four, given the cost of housing and health care these days. • The reason why it is so low is that politicians do not like to admit that poverty exists under their administrations, and there is relatively little political payoff in directing resources to the poor because the poor have low voting rates. • In 1964, President Johnson declared a War on Poverty. At that time about 22% of Americans were officially poor, and a lot of them were senior citizens. Within about 10 years, the poverty rate dropped to around 12%, which is where it has hovered ever since. Johnson was an economic and social liberal. • The rise of Ronald Reagan, the economic conservative, led to the dismantling of 1/3rd of the welfare directed to the poor. Poverty rose.
Extent of U.S. Poverty • By the end of the Reagan era, official poverty rose to about 14%. • By 2000, poverty had declined to around 12% again, but under the conservative policies of President Bush poverty is on the rise again. In 2004 the government claimed that 12.7% of Americans were poor. This adds up to 40 million Americans. • Yet the U.S. has the resources to eradicate absolute poverty. The amount needed to end absolute child poverty is roughly $28 billion annually. We routinely spend more than this on the Iraq War, which has been estimated to cost Americans roughly $3 trillion dollars over the next few years. • This is even less than we spend each year to bail out the savings and loan industry. • It is also less than the additional income given to the top 1% of Americans under the tax policies advocated by economic conservatives.
Who are the poor? • 1. Children. In 2000, 16% of all individuals under 18 years old were poor. The elderly used to be among the disproportionately poor, but the War on Poverty provided programs like Medicare which alleviated poverty among seniors. In 1967 30% of the elderly were poor, but by 1996 only 11% were poor. Government resources have increased for the elderly, but not for children. (Children don’t vote). • 2. Racial/Ethnic minorities. While most poor people are white (66%), minority groups are disproportionately poor. In 2000, 22% of blacks were poor, compared with only about 8% of whites. • 3. Women. Of all poor adults, 61% are women and 39% are men. Women who are single parents bear the brunt of this. Of all poor families, half are headed by a single woman. Of course, her children suffer too. • 4. Inner city and rural residents. These are regions where unemployment is higher. In the inner city about 16% are poor, compared with only 8% who live in the suburb.
Explaining Poverty: Two Opposing Models • The U.S. is among the world’s most affluent societies, yet it has one of the highest levels of poverty of all industrial nations. • Our poverty rate is high because we tolerate high levels of poverty. Americans tend to be individualists who believe that the individual must be responsible for whatever conditions they face. Part of the reason for this lies also in American attitudes about the sources of poverty. • There are 2 opposing explanations for poverty – the culture of povertyexplanation promoted by Oscar Lewis and the economic explanation promoted by William Julius Wilson.
The Culture of Poverty • This model, advocated by Oscar Lewis, represents the conservative viewpoint. They argue that the poor are mainly responsible for their own poverty. • This is due to the culture that poor people grow up in – particularly the culture that allows high levels of matriarchal households. In these households, there are few responsible male role models, so the kids don’t grow up in a healthy subculture. • Advocates of this view argue that there are plenty of opportunities for jobs and education, but that poor people are not taking advantage of these opportunities. Instead, they point to poor people preferring to hang out on street corners and become welfare dependents. They lack ambition and a hard work ethic.
The Economic Model • William Julius Wilson disagrees with the culture of poverty explanation for poverty. He argues that poverty is mainly due to the lack of economic opportunities in the inner cities and rural regions where poverty is concentrated. • He claims that poor people are just as motivated to work, but it is an issue of opportunity, not values. The problem is that poor people do not have the same access to jobs, loans, good schools, and other vital resources for upward mobility. • He says it is “blaming the victim” to attribute poverty to deficiencies among the poor rather than deficiencies within the larger economic system.
Evaluation • Americans are evenly divided over whether the government or people themselves should take responsibility for reducing poverty. • About half of the head of households among the poor did not work at all in 2004, which seems to support the culture of poverty model on the surface. • But the reasons why they did not work are more consistent with the economic model. Many poor women want to work but cannot afford child care, and they complain that there are not enough jobs to go around. • The University of Michigan publishes an annual Panel Study on Income Dynamics (PSID research). This research reveals that the poor have a similar work ethic and achievement ambition to other social classes. The research finds that only 2 to 3% of the able-bodied poor intend to live off of welfare. The research also finds that 1 in 5 Americans becomes temporarily poor at some time in their life – but we get married or get jobs which move us out of poverty. Poverty is dynamic.
Evaluation • Given the PSID research, it would be more effective to focus on structural job-creating solutions than to focus on changing poor people’s so-called “deficient” value systems. • It is important to remember that the bulk of poor people are too old, young, or sick to work. • Another key point is that 20% of the poor are heads of households who are already working. Their jobs simply pay too little to get them out of poverty. These are the “working poor” and they are a direct contradiction to the culture of poverty model that explains poverty. • For many Americans the minimum wage is so low that it traps them in poverty. They advocate an increase in the minimum wage.
Homelessness • Housing costs have skyrocketed since the 1970s, and this, combined with the nature of poverty, is the main factor behind the homeless problem. • There are 500,000 homeless people on any given night in the U.S. • Homelessness is caused by a variety of factors • Rising housing prices and the failure to build affordable housing • Job loss, divorce , injury, bad health, or death of a loved one • People with mental and drug abuse issues • De-institutionalization, with people being released from total institutions during the 1970s • Decline of the old bowery system of housing, where a room could be temporarily rented for pennies • Today about 1/3rd of the homeless are entire families.
Why have Americans allowed absolute poverty to continue? • The dominant ideologies of capitalism, meritocracy, and individualism help explain why most Americans refuse to do much about absolute poverty. • Americans are socialized to view welfare as a “hand out” that interferes with the work ethic. Welfare is heavily stigmatized in the U.S.. Americans are more likely than Europeans to view the poor as lazy or stupid, and as people who take advantage of the system. • The stigma of poverty is so great that 50% of those eligible for assistance do not even apply for it. • Ironically, while most Americans believe that welfare undermines the work ethic, most Americans are not aware that half of all welfare goes to the middle and upper classes. • There are two welfare systems operating simultaneously in America – welfare for the poor, and another system of welfare for the rich, their corporations, and the middle class.
Welfare for Whom? • The term “welfare” refers to supports paid for by public funds that go to any group that “needs” it. Given the influence of the rich upon government policies, it is no wonder that the American welfare system has bailed out banks, airlines, oil corporations, and other multimillion dollar industries. • Even the middle class enjoys welfare support when they deduct the mortgage interest on the homes they own. • The CATO Institute, a conservative think tank, estimates that welfare for the rich and middle class totaled $300 billion in a recent study.
Conclusion • Finally, given American individualism, we are socialized to believe that people are personally responsible for whatever predicaments they find themselves in. • This view ignores the power of racism, sexism, and classism in limiting people’s opportunities. • Today about 70% of whites believe that racism no longer affects the lives of racial minorities, compared with only about 30% of blacks who agree with this viewpoint. It appears that most Americans do not want to acknowledge that we are not an “equal opportunity” society. • As long as Americans continue to attribute poverty to personal defects, and as long as Americans mistakenly believe that we live in an “equal opportunity” society, they will do little about poverty.