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LET’S TALK ABOUT MONEY! WEALTH, INCOME, & CONSTRUCTING SOCIAL CLASS SOC 3300 – Social Inequality Dr. M. C. Sengstock Professor of Sociology

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Presentation on theme: "LET’S TALK ABOUT MONEY! WEALTH, INCOME, & CONSTRUCTING SOCIAL CLASS SOC 3300 – Social Inequality Dr. M. C. Sengstock Professor of Sociology"— Presentation transcript:

1 LET’S TALK ABOUT MONEY! WEALTH, INCOME, & CONSTRUCTING SOCIAL CLASS SOC 3300 – Social Inequality Dr. M. C. Sengstock Professor of Sociology 1

2 ISSUES FOR DISCUSSION: WHAT IS INCOME? … WEALTH? HOW DO THEY DIFFER? What Do We Mean By Income? – What Does Thomas Shapiro (#5) Mean by Income? What Do We Mean By Wealth? – What Does Shapiro Mean By Wealth? 2

3 INCOME Earnings From Work: – Salaries or Wages Substitutions for Earnings: – Pensions, Social Security – Disability Payments, Unemployment Insurance, Other Social Assistance Resources Obtained Over a Specific Period (Annually, Monthly, etc.) 3

4 WEALTH Total Value of a Family’s Financial Resources – Minus All Debts Includes: Stocks, Money in Banks, Other Investments Business(es) Property Owned: Home(s), Cars, Planes Debts Are Subtracted from Above Remainder Are the Family’s “ASSETS” 4

5 COMPARING INCOME & WEALTH How Much INCOME Do YOU (Personally) Have? – Regular, Full-time Job? – Part-time Job? – Salary? Or Wages? What’s the Difference? Salary: Known Amount Per Month/Week Wages: Amount Per Hour – Changes With Number of Hours – Regular Income from Social Security or Pension? – Irregular Income from Day Jobs? – No Regular Income? How Much WEALTH Do YOU Personally Have? Your FAMILY? – Own a Home or Condominium? A Business? Or Several? – Own a Vacation Home? Own Any Other Real Estate (Rentals)? – Have a Bank Account? How Much Is In It? – Own Stocks, Bonds, Other Investments? 5

6 IMPORTANCE OF WEALTH What Does Wealth Do? … Allow People to Do? Tide You Over for a “Rainy Day” Save for the Future – Plan for Retirement Save for the Future: Children, Grandchildren Build Up FAMILY Resources For Posterity Ethnic Community Goals: “He Has PROPERTY!” 6

7 The Hidden Cost of Being African American: How Wealth Perpetuates Inequality (Thomas Shapiro, 2004 – #5) Interviewed Nearly 200 Families Asked About Their “Wealth” – Their “Assets” How They Plan to & Actually Acquire Wealth How They Use Their Assets 7

8 WHAT PEOPLE SAID ABOUT “WEALTH” “Wealth”: Treated Differently from “Income” People SPEND Income – They PRESERVE Assets Wealth There for Emergencies: Personal Safety Net, Cushion Against Unexpected Job Loss, Health Crisis Quotes: “Income Supplies Life Support; Assets Provide Opportunities.” “Income is Limited. Assets You Hold Onto For the Future.” “Wealth is Definitely Long Term. We Act As If It’s Not Even There.” 8

9 CORRELATING WEALTH & INCOME Wealth in America (Lisa Keister, 2000) Finds Little Correlation Between Wealth & Income What Does This Mean? – People Who Have Wealth Primarily Have It From the PAST – It Was INHERITED – They Keep It In Reserve for Unexpected Expenses – It Helps Them Get a Good Education, Perhaps Good Jobs – But They Don’t Necessarily Make the Largest Salaries – They Live a Life Style Which Those With ONLY Income: Cannot Afford – Cannot Understand! They Always Have a “Back-Up” 9

10 People Confuse Wealth & Income True of General Public Also True of Many Social Scientists & Research Studies – Research Almost Always Focuses on INCOME! – Rarely Uses Wealth As a Variable! – We Compare High – Middle – Low Income People – We Do Not Look At How Much Wealth People Have – Or How “Wealthy” Differ From Those Without Wealth Perpetuated By the American Media 10

11 EXAMPLES OF WHAT WEALTH CAN DO Assets to: – Send Kids to Private Schools  “Good Contacts” – Support Children in College  No School Loans – “Legacy” Admission to College (vs. Affirmative Action) – Provide Down Payments for Children’s Homes  Larger Homes, Better Neighborhoods, Better Schools – Provide Jobs/resources in Family Businesses EX: Republican Nat’l Committeewoman: “Get a Job!” Ann Romney: “Had To Get Use Daddy’s Stocks & Loans To Get Through College! 11

12 IMPACT ON AFRICAN-AMERICANS “Wealth Dearth” Main Impact: African-Americans Not Been In a Position to Accumulate Wealth Wealth Is Accumulated Over GENERATIONS Wealth Is Not the Work of 1 Individual Getting A Good Education & Good Job: – Provides a Good INCOME – It Does Not Produce WEALTH That Requires Several Generations! 12

13 APPLICATION TO WHITE ETHNICS Similar Impact on Other American Ethnic Groups – Jews Have Done Fairly Well in Getting Ahead – How Jews Came to Be Seen as “White” (Karen Bodkin) – Irish, Italian, Greek, Jewish Became Doctors, Judges, etc. ( Mary Waters #2) – May Be Over-Stated Re Wealth – Many Italian & Polish & Some Irish Still Have Little Wealth 13

14 WHY MAJOR IMPACT ON BLACKS? Impact of Government Policies Other Institutional Policies AFTER Civil War & Reconstruction Blacks Ineligible for Government Programs: – 1935: Roosevelt – Social Security Act: Passed By Deals With Southern States: STATE Administration – Post WW II Benefits: FHA, VA, GI: Blacks Ineligible – Restrictive Covenants in Housing – Home Ownership: MAJOR Mechanism  Wealth 14

15 Home Ownership As Major Component of Wealth For Most People – “The Home” Is the Main (Only ?) Component of Wealth Minorities – esp. African-Americans – Missed Out on Many Early Aids to Home Ownership Recent Drop in Real Estate Values  Left Many Families’ Home Investment in Shambles 15

16 CONSEQUENTLY: White English: Start Accumulating Wealth With a Major Asset – Began Pre-1900 Other White Ethnic Groups: Began Around 1920 or Later – Had WW II Advantage African-Americans: Only Begin With the Civil Rights Movement of the 1960s Consequently: Still Far Behind in Wealth 16

17 GOVERNMENT IMPACT ON OPINION: ASSET POVERTY LINE (APL) Tool To Examine Resource Condition (“Wealth”) of American Families Ability to Survive for 3 Months Without Income (Conservative Assumption – Most Need More) 1999: Monthly Poverty Line (Family of 4) = $1,392 3 x $1,392 = $4,175 – How Many Families Have It? “Asset Poor” Families Have < $4,175 – Cannot Survive for 3 Months Without Help What If We Used a 6 or 9 Month Assumption? – Gap Would Be Even Greater 17

18 EXAMPLES OF ASSET POVERTY Typical African-American: <$3,000 Assets “Asset-Poor” Families: – 25% of African-American & Hispanic Families – 13% of White Families 2001 Recession Particularly Hard on Middle Class – Had Been Accumulating Some Assets Comparisons: – Whites (BASE): $1.00 Assets – Hispanics: $0.11 Assets – African-Americans: $0.07 Assets 18

19 IMPACT OF ASSET POVERTY Inability to Survive Through Minor Emergency: Unemployment, No Unemployment Benefits What Happens If They Lose a Job? … If Someone Gets Sick? If There Is a Recession (EX: 2001) Conservative Answer: “They Should Have Planned Better!” 19

20 IS EDUCATION THE ANSWER? Impact of Education on Assets – Prior to 2001 Recession – Middle Class Families Middle Class Defined By Education: If White Middle Class Owns $1 of Wealth – …Black Middle Class Owns $0.25 – …Up From $0.10 Earlier Wealth Is NOT Accumulated By Individuals … But By Families – OVER TIME 20

21 SIGNIFICANCE OF WEALTH ISSUE Illustrates the Interaction of Social Class & Its Dimensions With Race & Ethnic Characteristics Social Class Is Determined By Income, Wealth Racial Characteristics Determine Social Class Membership To a Considerable Extent Ethnic Characteristics Determine Social Class To a Lesser Extent Social Institutions Influence These Patterns In Major Ways 21

22 NEXT TOPIC: INFLUENCE OF THE MEDIA The Media: Creating the Middle Class Defining the Middle Class Defining Who Belongs To the Middle Class Defining the “Others” 22

23 THE MEDIA ROLE IN SOCIAL CLASS DEFINITION U.S. Most Stratified Industrial Society The Poor Are “Invisible,” Demeaned Concerns of “Wealthy Class” Emphasized Wealthy Not Viewed as a “Class” “Middle Class” Defined As Major Focus Middle Class Is NOT a “Working Class” (Gregory Mantsios #6) 23

24 U.S. Most Stratified Industrial Society Socio-Economic Class Influences Everything: – Jobs & Income – Quality of Education – Health & Safety – Social Contacts YET – Maintain an Illusion of “Egalitarianism” – “Horatio Alger” Myth Mass Media Influential in Defining Class Decreasing Number of Media Outlets 24

25 Media: Poor – Invisible, Demeaned 40 M Poor in U.S. (ME, NH, VT, RI, CN, NY, NJ) – Poor Are Increasing – 2x as Fast as Genl. Pop. Poor Are Ignored in Media – Do Not Exist “Faceless” – Just a Number – Undeserving, At Fault: Cheats, Addicts, Lazy – Eyesore, an “Irritation” as Opposed to Maltreated – Occasional Attention – Affluent Christmas Gifts HHs < $10K – Give 5.5% to Charity HHs >$100K – Give 2.9% to Charity 25

26 Poverty: Individual or Systemic? 2 Views of Poverty: Individual: The Media’s View – If You’re Poor, It’s Your Fault Systemic: The Reality: – Direct Result of Economic & Political Policies Favor the Rich with Tax Cuts, Corp. Aid; Deprive Poor of Jobs, Adequate Wages, Right to Unionize Produce a Society in Which General Wages Decrease – “Blaming the Victim” (Wm. Ryan) 26

27 Focus on Issues of “Wealthy Class” Great Attention to Stock Market – Though Few People Own Stock Attention to Taxes & Need to Decrease Them – Though Most Tax Decreases Favor Very Rich – Even the Poor Convinced Taxes Are Bad! Media Concern With “Extreme” Union Power Little Attention to Corporate Political Influence 27

28 Wealthy Not Defined as a Class Wealthy Behavior as a “Class” Ignored Wealthy Influence in Society Ignored – Supreme Court: Corporate Right to Fund Lobbyists Most Political Power in Hands of Millionaires! Wealthy Use Their Influence Wealthy Image as “Benevolent” – Usually Donate to Arts, Wealthy Causes – Generally Do Not Give to Agencies Helping Poor 28

29 Middle Class As Major Focus If the Poor Are Demeaned … & Rich Are Not Defined As Rich … What’s Left? Emphasis on “Middle Class” – Everyone Not “Poor” Defined as “Middle Class” Leaves Viewers, Readers Believing: – “We” (Rich & Working People) Are All the Same … – Except for Those Lazy, Good-for-Nothing Poor! 29

30 Evidence for Huge “Middle Class” Surveys: Most People (75%-90%) Identify Themselves as “Middle Class” Upper & Lower Class ID Is Rare (5%-10% Each) Give Option of “Working Class”: – Divide “Middle Class” in Half – Even Objectively Poor Often ID As Middle Class – Impact of the Media’s Image of “the Poor”? 30

31 Middle Class NOT a Working Class How Did “Middle Class” Become “Middle”? Most Started “Poor” – Worked Hard Assisted By Government Programs: – Home Ownership Assistance – Educational Programs – Social Security, Unemployment, etc. Assistance from Labor Unions! (Our Parents?) Today: Middle Class People Dissociate Themselves from Working Class! – Business Students Believe in Trusting Employers 31

32 Reality of the Upper Class Very Wealthy Control U.S. Society – Disproportionate Share of “Wealth” (vs. “Income”) – Have a Distinct Life Style – Interact Primarily Among Wealthy (Schools, Clubs) – Are a “Governing” Class – Run for Office, Get Elected, Get into Power – Ensure That Political & Economic Policies Favor Their Own Interests (Taxes, Environment, Trade) – Avoid Societal Problems Through Private Programs Private Police, Schools, Clubs, etc. 32

33 Summary U.S. Has Highly Structured Class System Mass Media Influence Public Opinion re Economy & Social Class System Wealthy Control Society’s Economy, Politics – But Not Viewed as “Wealthy” by Society Most People ID as “Middle Class” Middle Class Dissociate Themselves from “Working Class” Poor Are Demeaned & Blamed for Their Victimization 33


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