THE AMERICAN DREAM Social Class and Families Chapter 4

AMERICAN DREAM Land of Opportunity Rags to Riches—Anyone can become rich, famous, powerful. Jobs and education available to all who want them. Meritocracy (rewards)=skill + effort. Through hard work, courage and determination one can achieve prosperity. Americans can live better than their parents did.

Social Mobility The movement of families up and down the economic ladder 40% of incomes stayed at about the same level; 60% moved up or down. Only 37 of America’s 400 wealthiest inherited their money from their family.

Social Class The ordering of all persons in society according to their degrees of: Wealth (economic resources) Power Prestige

What are the key features of social class? WEALTH – Valued possessions : cash, land, buildings, property – Income : money from employment, shares etc. – Tends to be intergenerational POWER – Ability to carry out one’s will, even if opposed by others – Who has power??? PRESTIGE – Respect given to people with valued positions or resources

Upper Class Facts Q.What % of Americans belong to the upper class? 0.5% Q.Extent of wealth? – Top 1% owns more than one third of ALL net worth in the U.S. – 50% U.S. stocks, 60% bonds; corporations, property, inheritances; income mostly from investments not employment Q.Source of power? – Ownership of resources - money makes money – Economic power and political power intertwined Q.Source of prestige? – Family name & resources (old: Rockefeller, Carnegie, Walton, Getty; new: Gates)

Upper Class

Corporate Class Facts Q.What % of Americans? 0.5% Q.Extent of wealth? – A lot, but not as much as the upper class – Usually not major owners of companies – Median CEO salary $10.8 million – President of the U.S. $400,000 – The vice president's annual salary is $221,100 Q.Source of power? – Heads of companies, government Q.Source of prestige? – Position of influence

Middle Class The Cosby Show America’s first black middle class TV family

Middle Class Facts Q.What % of Americans? 43% Q. Extent of wealth? – Some – Ownership—own home – Income—mid to high income – Engineer, $58,000 – Teacher, $34,000 – Winthrop Professor, ?? Q.Source of power? -Limited within context of occupation Q. Source of prestige? – Some more than others, White collar job

Working Class

Working Class Facts Q.What % of Americans? 43% Q.Extent of wealth? – Little – Ownership—little or no property – Income—mid to low – Factory worker, $24,000 – Machine operator, $23,000 Q.Source of power? – Limited, sometimes collective power through unions Q.Source of prestige? – Very little, Blue collar jobs

Lower Class

Lower Class Facts Q.What % of Americans? 13% Q.Extent of wealth? – Very little, usually none – Ownership: none – Income: low – Poverty rate in 2001: 9.9% – Only about 1/3 of poor get welfare Q.Source of power? – Limited to none Q.Source of prestige? – Limited to none

Inequality Based on Class Health—Higher class live longer (79.2 years vs years). Crime—Impoverished areas tend to have higher crime rates Education—Despite continued increases in financial aid, the proportion of higher class students at elite schools is increasing. Families—Higher class are more likely to have children within marriage and at older ages.

Distribution of Wealth

Racial gap in the Labor Market

Annual Earnings by Gender

Earnings by Gender & Race

Poverty rates and Gender

Mobility Beliefs

Intergenerational Social Mobility

Inequality by Country

Revisiting the American Dream Land of Opportunity? – “Rags to riches” or “The rich get richer” Social class: Achieved or Ascribed?  Between 40% to 60% of parental income advantage passed to children A meritocracy? – Barriers to upward mobility Education Social network ???? Implications for families?

America: A Tale of Two Cities