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SOCI 201

SOCIAL PROBLEMS in the 21st Century

Professor Kurt Reymers, Ph.D.

SPRING 2013

A. Economic Inequality

1. a. Economic Inequality in the U.S. is related to the social class system.

a. Social Stratification is the categorization of people into a soci al

hierarchy (as defined by access they have to ce rtain resources related to standard of living and social position).

b. Is America socially stratified?

Is the U.S. a class society? Yes, BUT Americans do not readily admit that they belong to

social classes. When asked, most people either overestimate or underestimate their position as middle class.

A. Economic Inequality

c. What are the signs of social class standing in America? How is class socially constructed?

List signs of wealth and poverty: lifestyle, residence, money, etc.

Video: People Like Us (PBS) Video: Descriptions • Desire for Wealth - David Patrick Columbia on materialism

• Job – John DiIulio on ―real work‖; Barbara Ehrenreich on ―occupational prestige‖

• Language – Ginie Polo Sayles on impression management (body language)

• Culture – R. Couri Hay on the upper class and David Brooks on ―cultural capital‖

• Race – Lawrence Otis Graham on class conformity

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A. Economic Inequality But, inequality clearly still exists in the U.S. and it is

growing…

2. Inequality in the U.S. a. The Classes

i. The Upper Class = 5% of the population Old Money vs. New Money; Income ~ $250K+; national political

connections (the power elite); high prestige (private school is a must)

ii. The Middle Class = 45%

White/Gray Collar workers; Income ~ $50K- $250K; Local political connections; Education (prestige) is important;

iii. The Working Class = 30% The old ―industrial class‖; Blue Collar workers; Income ~ $20K-$50K;

Prestige not as important (pride in work)

iv. The Lower Class (or “Underclass”) = 20% Working poor; Low level service work > $20K; Welfare poor – no work

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Upper Class

Middle Class

Working Class

Lower Class

A. Economic Inequality

6.b. How are the classes perpetuated (more like castes)?

i. Wealth and power is highly concentrated in the upper class A very small percentage of the population still controls

over half of the corporate stock. Inheritance laws keep money in the upper class.

ii. The law favors the rich Access to real legal representation for the poor has been

disabled; (cf. The Plea) The ―average‖ American still cannot use the legal system

to the same as extent as the rich.

iii. The educational system reproduces class inequality

Average income of the family of Harvard student: $150,000 vs. U.S. Average family income ~ $53,000

Distribution of Income and Wealth in the United States Income, and especially wealth, is divided unequally in U.S. society.

Sources: Income data from U.S. Census Bureau (2007); wealth data based on Keister (2000), Bucks et al. (2006),Wolff (2007), and author estimates.

Average U.S.

Annual Income,

1980-2006 (in 2006 dollars,

adjusted for inflation)

The gap between high-

income and low-income

families is wider today than it

was in 1980.

Source: U.S. Census Bureau (2007).

Society: The Basics, 10th Edition by John Macionis Copyright 2009 by Pearson Education, Upper Saddle River, NJ 07458. All rights

reserved.

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D. Economic Inequality

3. Poverty a. The “Poverty Line”

Figured by taking what it costs to feed a family and multiplying that times a factor of three - $23,050 today for a family of four.

http://aspe.hhs.gov/poverty/12poverty.shtml

In 2011, 46.2 million people were poor, up from 39.8 million in 2008 and 37.3 million in 2007. The nation's official poverty rate in 2009 was 14.3 percent, up from 13.2 percent in 2008 — the second statistically significant annual increase in the poverty rate since 2004. (Census Bureau 2010a p.13)

The poverty rate in 2011 (15%) was the highest since 1994, but was 8.1 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available. The number of people in poverty in 2009 is the largest number in the 51 years for which poverty estimates are available. (Census Bureau 2010a p.13)

From: http://www.worldhunger.org/articles/Learn/us_hunger_facts.htm

J. Race and Ethnicity 2.c. Economic subordination

Source: Council of Economic Advisors, President’s Initiative on Race, 1998

J. Race and Ethnicity 2.c. Economic subordination

Source: Council of Economic Advisors, President’s Initiative on Race, 1998

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J. Race and Ethnicity 2.c. Economic subordination

Source: Council of Economic Advisors, President’s Initiative on Race, 1998

D. Economic Inequality

3. Poverty b. Groups hit hardest Children and the elderly

Over 25 percent of America’s children go to bed hungry, live in poor housing, and suffer more from disease

Elderly women are the hardest hit, even with increases in social security

Women, especially single mothers The fastest growing group of poor

The “Feminization of poverty”

Racial and ethnic minorities One-third of blacks and Hispanics live in

poverty

A. Economic Inequality 3. Poverty

c. Institutional Discrimination Unfair prejudice or discrimination against

individuals as a result of the way an organization or social group is organized.

Poverty is linked to institutional discrimination in the following ways:

• Lack of Educational Opportunity: most good

paying jobs require a college degree, but the poor cannot afford to send their children to college;

• Dead-End Employment: low-end jobs pay low

wages so that the poor have no way to improve their conditions;

• Political Inaction: The poor do not represent a

strong lobby in Washington because they lack the resources to ―grease the wheels‖ of Congress.

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Who’s Responsible for Poverty?

A. Economic Inequality

3. Poverty – Deficiency Theory d. The Culture of Poverty

Who’s to blame for poverty?

The real question is how cyclical is poverty? Is there a culture of dependency?

We should treat both the poor AND the rich by the same assumptions (c.f. "corporate welfare").

Cohen: The underlying conditions of poverty are STRUCTURAL.

Research is very careful to recognize MANY factors. Note: Inner city poverty is declining. Rising poverty is in rural, isolated areas and the suburbs - also, areas of business that are not paying a living wage are growing (Wal-Mart, Home Depot, big box McDonaldized corporate businesses, and healthcare system)

People get caught in a "false dualism": Either people are lazy or there are no jobs. BUT NO: it's a much more complex problem.

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A. Economic Inequality

4. Corporations and Globalization Corporation: An organization with a legal existence,

including rights and liabilities, separate from those of its members

Corporate Globalization has created:

a. Economic concentration In 2009, Exxon-Mobil was the largest with $442 billion in revenues

Next are Wal-Mart ($405b.), Chevron ($263b.) and ConocoPhillips ($200b.)

b. Conglomerates & mergers Merger: Strategy for diversification of assets (protectionism); Mergers create Interlocking directorates

Same network of people serving as board members for many corporations

c. Lack of Competition - Monopoly: Domination of a market by one corporation; - Oligopoly: Domination of a market by a few corporations.

Jeffrey C. Barbakow, Tenet Healthcare $22,785 per hour $116.4 million for 2002. Doesn't include new stock options with potential value of $72.4 million. Tenet's 2002 stock price change: 63.8%

Michael S. Dell, Dell Computer $16,100 per hour, $82.3 million for 2002. Doesn't include new stock options with potential value of $37.5 million. Dell's 2002 stock price change: -13.2%

CEO Salaries Unprecedented increases in the last 20 years I've reduced these three CEOs' compensation in 2002 to hourly rates. What their hourly pay would be if they worked 14-hour days every day of 2010?

Scott G. McNealy Sun Microsystems $5,053 per hour $25.8 million for 2002. Doesn't include new stock options with potential value of $61.2 million. Sun's 2002 stock price change: -68.1%

Median CEO pay at a large company:

$1,017 per hour, $5.2 million for 2002

Others' hourly pay: President Obama: $200.00 Army Gen. Tommy Franks: $69.10 Physician: $60.14 Grade-school teacher: $28.01 Firefighter: $17.16 Average worker: $16.23 Taxi driver: $8.67

Source: USA Today

A. Economic Inequality

5. Social Class is a function of the type of Political-Economy a society supports.

a. Capitalism

i. Private ownership of property Key concept of capitalism

ii. Pursuit of personal profit Simply a ―matter of doing business‖

iii. Free competition The ―invisible hand‖ (cf. Adam Smith) is at work so

leave ―the market‖ alone

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A. Economic Inequality

5. Types of Political-Economies:

b. Socialism i. Collective ownership

Limits the right to own property;

Forms a classless society

ii. Pursuit of collective goals

Pursuit of profits stands at odds with goals

iii. Government control of the economy

Centrally controlled economy;

Consumers should not drive economy

ECONOMIC PRODUCTIVITY

• GDP is $13,500,000,000,000

ECONOMIC EQUALITY

• More income disparity

OVERALL WELL-BEING

• A high quality of life for some, but greater disparities

PERSONAL FREEDOMS

• The heart of capitalist systems; need creative forces

ECONOMIC PRODUCTIVITY

• GDP is $5,000,000,000,000

ECONOMIC EQUALITY

• Less income disparity;

OVERALL WELL-BEING

• Lower standards of living, but less disparity;

PERSONAL FREEDOMS

• Stress is placed upon freedom from basic needs.

CAPITALISM SOCIALISM

Some socialist economies have failed due to: - underproduction - largely ineffective central governments - low living standards - overly rigid control of personal freedom.

A. Economic Inequality Advantages of Each Type Capitalism Socialism