By: Dennis Gilbert Hamilton College

By: Dennis Gilbert Hamilton College
The American Class Structure in an Age of Growing Inequality Eighth Edition By: Dennis Gilbert Hamilton College

Social Class in America
Chapter 1 Social Class in America

The Origin of Social Class Analysis
The study of social class has its origin in Western Philosophy. Philosophers during this period realized that wealth, power, and prestige were not equally distributed in society. They understood that this unequal distribution of resources reflected a social hierarchy composed of families with different class interests based on the amount of wealth, power, and prestige that they controlled. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

© Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011
Karl Marx ( ) Marx argued that social classes are characterized by their relationship to the means of production. Marx identified two classes: The bourgeoisie, or the capitalist class, who own the means of production (e.g., factories). The proletariat, or the working class, composed of those individuals who must sell their labor to members of the bourgeoisie for a wage in order to survive. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. Marx argued that differences within the bourgeoisie and the proletariat would eventually fade, and the differences between these two classes would take primacy as they became increasingly polarized due to the forces of competition and the advent of mechanization. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. According to Marx, individuals’ lives are intricately and inextricably tied to production. Because of this our outlook on life must necessarily be a function of our relationship to the means of production. Members of the proletariat work for a wage that is less than the value of what they produce. This difference, or surplus value, is expropriated by the bourgeoisie in the form of profit. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. Marx viewed capitalists’ accumulation of profit in this manner as inherently exploitative and led to conflict because capitalists are opposed to anything that might operate to lessen the amount of surplus value they can expropriate (e.g., increased wages and union activity). The constellation of class and property relationships originating from production are fundamental to all societies and, together, are referred to by Marx as the mode of production. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. Informed by his analysis of European history, Marx identified three modes of production through which he believed societies would progress (p.4): Feudalism: agrarian; landed aristocracy; peasant majority Capitalism: industrial; characterized by the relationship between the bourgeoisie and the proletariat Communism: “the technologically advanced, classless society of the future, in which all productive property would be held in common” © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. Ideology “[T]he pervasive ideas that uphold the status quo and sustain the ruling class” (p.5). Marx argued that members of social classes share similar experiences which shape their outlook on life. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. Individuals’ experiences, ideas, and interests are conditioned by their class membership. People tend to believe their particular interests are shared by all members of society. Marx believed those who controlled the means of production were those who were able to see that their class interests were advanced. “[T]he ideas of the ruling class are in every epoch the ruling ideas” (Marx). © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. Marx introduced the concept of superstructure to explain how “privileged minorities” are able to maintain their dominance in societies and contain the potential resistance of exploited majorities. Superstructure: the social and political institutions and ideas in society He reasoned that privileged classes tended to control the superstructure through compulsion or persuasion. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. The advancement of the capitalist classes’ interests generally resulted in the perpetuation of the status quo, which Marx viewed as unstable. Economic changes can operate to produce rising classes whose interests are at odds with the those of the “established ruling class.” This resulted in class conflict . Social change comes about through class struggle. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. The continued exploitation of the proletariat would result in the formation of a class consciousness whereby members of the working class would realize their shared fate and unite collectively to effect social change that would reflect their interests. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Karl Marx, cont. Some of the preconditions for the development of a class consciousness include: Growing class order Geographic concentration of large masses of industrial workers Living conditions of members of the working class Increased participation in political organizations such as unions dedicated to the interests of the working class © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Max Weber ( ) While Marx articulated a theory of social stratification based strictly on individuals’ relationships to the means of production, Weber distinguished between class and status. According to Weber, class referred to economic position and its attendant effect on individuals’ life chances. Life chances: “The fundamental aspects of an individual’s future possibilities that are shaped by class membership” (p.7). © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Max Weber, cont. Like Marx, Weber made the distinction between those who owned property and those who did not. In contrast to Marx, Weber allowed for more than two distinct social classes and even suggested that “the proletariat were really a highly differentiated group” (p.7). Social class: “group who share the same economically shaped life chances” (p.8). An objective economic fact © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Max Weber, cont. Status: ranking based on social prestige It is subjective; a sentiment in people’s minds. Individuals, in particular status groups, tend to view themselves as a social community due to their similar lifestyles. Status groups tend to be restrictive in an attempt to preserve their advantages in society. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Max Weber, cont. “Weber, like Marx, was interested in the relationship between stratification and political power” (p. 9). Weber, unlike Marx, argued that not all political phenomena or institutional outcomes in modern bureaucratic societies can be reduced to the control of a single class. Weber argued there were multiple classes in societies, and individuals also have multiple identities (e.g., race and ethnicity, gender, etc.) making his understanding of social stratification more flexible than Marx’s. Status differences often undermine the development of class consciousness and class struggle. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Three Broad Issues and Ten Variables in the Study of Social Class
1. Economic basis a. Occupation b. Wealth c. Income d. Poverty 2. Social Basis e. Prestige f. Association g. Socialization h. Social mobility 3. Political Implications i. Power j. Class Consciousness © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Gilbert’s Definition of Social Class
“We define social classes as groups of families more or less equal in rank and differentiated from other families above or below them with regard to characteristics such as occupation, income, wealth, and prestige” (p. 11). © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

A New Analytic Focus According to Gilbert, it is now analytically more appropriate to emphasize the division between the capitalist and upper middle classes and the classes below them. This new analytic focus is in contrast to the distinction traditionally made between blue collar and white collar occupations. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Chapter 2 Position and Prestige

W. Lloyd Warner: Prestige Classes in Yankee City
Warner conducted a study of the social class structure of a small New England town during the 1930’s. He utilized interviews and participant observation and was able to classify 99% of the town’s residents. He discovered a hierarchy of prestige classes based on both economic and social distinctions. When individuals had consistent rankings on the various social class variables classification it was less problematic. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

W. Lloyd Warner: Prestige Classes in Yankee City, cont.
Notable features of the Yankee City classificatory schema included: Old-money elite vs. those with recently acquired fortunes, The distinction between those who work with their hands (situated in the lower half of the class structure) and those from the higher classes who do not, and The attribution of moral status to class position. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

W. Lloyd Warner: Prestige Classes in Yankee City, cont.
Warner used clique and association memberships as a shorthand index for prestige position. Warner’s social classificatory schema of Yankee City, like all such schemas, is a useful abstraction that attempts to organize and summarize a great deal of data. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Prestige Class as a Concept
Warner maintained the breaks between the prestige classes were clear-cut except between the lower-middle and upper-lower. He realized that social ranking was often an unconscious process. Social classes are abstract concepts not identical with social reality but useful to researchers as they organized vast amounts of data. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How Many Classes? The classificatory schema illustrated in Davis, Gardner, and Gardner’s (1941) report Deep South documents how the appearance of class structures is dependent upon the perspectives of people at different class levels. That is, class structures look different dependent upon where one is situated in the class structure. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How Many Classes? cont. There are four important conclusions that can be drawn from the chart. Number of classes There are disagreement as to the number of classes. Perception and distance People make more distinctions among those close to themselves in the hierarchy than among those who are far away. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How Many Classes? cont. Coincidence of cleavages The class distinctions made by people from different classes coincide. Basis of class distinctions There is agreement vis-à-vis location in the hierarchy but no agreement as to why they are there. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Class Structure of the Metropolis
Coleman and Rainwater’s studied prestige classes in two metropolitan areas -- Boston and Kansas City. Their book on the research was titled Social Standing in America. They conducted 900 standardized interviews with both open- and close-ended questions. The class hierarchy they defined was similar to that of Warner’s Yankee City. They distinguished between blue collar and white collar workers They were unable to replicate the methodology of Warner exactly due to the metropolitan context they were working in. Individuals in Boston and Kansas City were unlikely to know one another as was common in Yankee City. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Prestige of Occupation
Warner and Coleman and Rainwater were concerned primarily with prestige. The Gilbert-Kahl model was based solely on economic considerations. Still, all three models show considerable consistency as illustrated in Table 2.2. This similarity is partly a function of sociological thinking about class, but it is also due to the relationship between prestige and economic position. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Prestige of Occupation, cont.
Occupation is often a fair indicator of two other sources of prestige: income and education. In the late 1940’s, the National Opinion Research Center (NORC) at the University of Chicago developed a survey where individuals were asked to rate the “social standing” of a list of occupations. Occupational prestige scores range from 0 – 100, though most fall between 20 – 80. People tended to raise in rank their own and closely related occupations. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Prestige of Occupation, cont.
People agreed with each other more on occupations that were well known. There is great consistency in ranking among different social groups (e.g., men and women, blacks and whites, the poor and the affluent, etc.). Occupational prestige rankings have shown remarkable stability over time. NORC respondents were better able to place various occupations in a social class hierarchy at its highest and lowest portions; there was greater difficulty at the middle of the class hierarchy. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Occupations and Social Classes
University of Michigan’s Survey Research Center (SRC) conducted a national survey of 2,000 adults in 1975 asking respondents to place a series of occupations into class categories. People did not have a difficult time associating occupations with social class. There was considerable agreement on placement. Placement was easier at the top and the bottom of the scale than in the middle. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

People Like Us: Social Class in America (1999)
People Like Us is a PBS documentary that explores Americans’ experiences negotiating our nation’s class structure. Individuals at all levels of the American class structure are interviewed. The documentary highlights the status distinctions that individuals make and perceive between themselves and those above and below them in the class structure. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Conclusion: Perceptions of Rank and Strata
In America, there is a prestige hierarchy recognized by most citizens which places people into a few classes. There is considerable ambiguity in terms of definition and differentiation. There is greater agreement about a rank order and ranking. There is less agreement about the criteria used in making ranking decisions and division into classes. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Conclusion: Perceptions of Rank and Strata, cont.
Gilbert identifies seven principles that can be used to understand the variation in perceptions of ranking and grouping. People perceive a rank order. There is greater agreement about the extremes than about the middle of the prestige range. There is more agreement about the top of the range and more distinctions are made about the top than about the bottom. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Conclusion: Perceptions of Rank and Strata, cont.
People lump together into large groups those who are furthest from them. People in the middle or at the bottom are more likely to conceive of class differences in financial terms. Those at the top are more conscious of prestige distinctions based on lineage and style of life. Mobility is a source of ambiguity in a perception of the prestige order. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Social Class, Occupation, and Social Change
Chapter 3 Social Class, Occupation, and Social Change

Middletown: 1890 and 1924 In 1924 Robert S. Lynd and Helen Merrell Lynd began studying the small town of Muncie, IN. In 1929 they published their researched in a study titled Middletown. They reconstructed life in Middletown in 1890 through historical research and documented the way in which industrialization had affected the town’s class structure. The gap between the business and working classes grew during this 34-year period. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Middletown: and 1924, cont. The Lynds suggested the gap between the business and working classes was a consequence of moving from a small market town to a town where machine production was ascendant. They argued this gap flowed from three causes: a larger population more machinery an increasing emphasis on money © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Middletown Revisited Six years after the publication of Middletown, the Lynds returned for a restudy of Muncie, IN, and found the following: Industrialization had more firmly taken root. The population was larger, and the relationships between business owners and their employees and customers had become more impersonal. Large national corporations were now located in Middletown, and many of their employees tended to be less skilled due to increased mechanization. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Middletown Revisited, cont.
They also found: Members of the burgeoning capitalist class who acquired great amounts of wealth as a result of the industrialization taking place in Middletown were able to pass this wealth onto the next generation. The second generation of owners were more self-consciously upper class. The second generation, born into wealth, did not have the same motives of the ambitious first generation. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Industrialization and the Transformation of the National Class Structure By 1900, the United States was the world’s leading industrial nation. In 1870 about 75% of the population was rural. In 1930 about 80% of the population had nonfarm jobs. The native-born population could not meet the expanding economy’s labor requirements necessitating increased immigration to fill the void. Large national corporations had emerged. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The National Upper Class
Though there were regional upper classes dating to colonial times, there had never been an aristocracy in the U.S. of the type known in Europe. In the decades following the Civil War, the number of millionaires increased substantially. Families such as the Carnegies, Vanderbilts, and Rockefellers gained admission to the highest reaches of the American class structure despite initial resistance by the old money elite © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The National Upper Class, cont.
The Social Register published in 1887 was a directory of 881 elite families in New York. It included a mix of old and new money families. Ward McAllister’s 1892 “400” list attempted to define membership in New York’s upper-class society. It was especially restrictive and attempted to exclude those whose money was too new. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Industrial Working Class
Many new industrial workers were immigrants. Working conditions were dismal. Organized labor activity was vibrant and at times violent during the period from the Civil War to World War I. Eventually state legislatures began passing laws prohibiting child labor, improving safety conditions, and providing for compensation of injured workers. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Industrial Working Class, cont.
Two tendencies prevent stark polarization between the capitalist class and the working class during the early part of the 20th century. 1. Racial and ethnic antagonisms and division over wages within the working class. 2. The expansion of the middle class with the belief by workers that they or their children might one day achieve upward social mobility. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The New Middle Class The new Middle Class was composed of salaried white-collar workers including salespeople, office workers, professionals, and managers. With increases in technology, corporations no longer needed a mass of workers involved in production but rather a workforce able to manage, design, and sell. Over time the line dividing the less compensated blue collar workers and the white collar workers with greater social prestige and material advantage became less predictive of these outcomes. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

National Occupational System
The United States Census Bureau has collected occupational information for over a century. The Census Bureau groups occupations into a set of broad categories. Alba Edwards created this set of categories forming a “socioeconomic “ hierarchy of earnings, education and prestige. There are some problems with Edwards’ schema. The assumption that white-collar jobs always outrank blue-collar jobs. The lumping of diverse occupations into broad categories. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Transformation of the American Occupational Structure
White-collar employment has grown steadily. By 1980 it made up more than half of the labor force. Professional/technical and clerical positions have increased their proportion fivefold. Most recently the largest and most rapidly expanding proportion of jobs has been found in service occupations. This includes hospital attendants, waiters and waitresses, janitors and security guards. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

From Agricultural to Postindustrial Society
The cause of the changes in the U.S. occupational structure since 1870 has been the transformation from an agricultural to an industrial and finally to a postindustrial society. This does not mean the U.S. no longer had viable agricultural and industrial sectors. Rather, these sectors of the economy can produce more food and industrial goods with fewer workers. The transition to a postindustrial economy was facilitated by advances in technology. The service sectors of the economy (e.g., retail, finance, health care, education, government) now employee the majority of Americans. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

From Agricultural to Postindustrial Society, cont.
Early interpreters of the transition to a postindustrial economy generally made one of two assessments: The postindustrial economy would provide prosperity, opportunity, and social mobility to large numbers of workers and need a growing army of managers and professionals. Fewer jobs would require manual labor, and more would offer higher levels of prestige and pay. There would be reduced opportunities for most Americans and growing levels of social inequality. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The more pessimistic interpreters thought the growing number of professional, “white-collar” jobs that were predicted by the more optimistic interpreters would not be realized. They believed that instead most of the massive growth in new jobs would be of the low-skilled variety (e.g., janitors and food service workers). © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Evidence supports both the “sunny side” and “dark side” interpretations of postindustrial society. In a postindustrial economy, highly skilled and educated workers tend to be those most handsomely remunerated. The types of factory jobs that pay well are no longer as abundant as they once were. As a result, those with limited skills and education will find it difficult to find well paying jobs in the postindustrial economy. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Women Workers in Postindustrial Society
Historically women have tended to be employed in “pink collar” occupations, e.g., nursing, teaching (elementary), secretarial and clerical work, and social work. Women have increased their proportion of the U.S. labor force. The growth of women in the labor force is partly a result of stagnating wages and high unemployment rates among men. Two incomes are now generally needed to achieve or maintain a middle class or upper-middle class standard of living. Women have also increased their proportion in fields which had historically been dominated by men (e.g., law and medicine). Since the 1970’s the gender gap between men’s and women’s wages has declined, although it has not closed completely. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Transformation of the Black Occupational Structure
The wage gap between blacks and whites has declined dramatically since the 1940’s. Blacks have been able to take advantage of opportunities made available as a result of antidiscrimination legislation passed in the wake of the Civil Rights Movement. Despite these positive trends, a significant occupational gap remains between blacks and whites. Blacks remain underrepresented in those occupations at the top of the occupational structure. There is also increasing class differentiation among blacks. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Wages in the Age of Growing Inequality
The period since the mid-1970’s is a time of growing inequality in the U.S. Three key tendencies characterize job earnings during these years: On average, men’s earnings have stagnated. Women’s earning have risen steadily. The distribution of both men’s and women’s earnings have become more unequal. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Growing Inequality of Wages: Why?
Five explanations are offered by social scientists about why there has been growing wage inequality: Economic Restructuring Globalization Technological Change Weakened Wage-Setting Institutions Deregulation © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Harrison and Bluestone: New Corporate Strategies
Harrison and Bluestone argue that corporate leaders have instituted a number of strategies with adverse effects for the bottom half of the labor market since the mid-1960’s in response to declining profits. Reducing labor costs through outsourcing; Utilizing part-time, temporary, and leased workers; Working to marginalize the efforts of labor unions; Pursuing short-term profit through speculative financial dealings; Seeking governmental policies that would reduce or eliminate taxes and workplace safety requirements seen as burdensome, unnecessary, and expansive. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Harrison and Bluestone: New Corporate Strategies, cont.
Harrison and Bluestone believe … Changes that occurred during this period were the direct result of individual corporate actors making conscious decisions as opposed to impersonal economic forces. Alternative decisions could have been made that would not have resulted in the adverse consequences for their workers by more effectively incorporating technology, education, and by modernizing their plants. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Frank and Cook: Winner Take All
Frank and Cook are convinced that winner-take-all markets are proliferating, disproportionately privileging those at the highest echelons of the occupational structure while at the same time producing negative consequences for individuals and the economy as a whole. The movement in this direction has been spurred by federal deregulation in various sectors of the economy. Their argument is somewhat problematic given that this trend is not being witnessed in all occupational categories and because earnings from these jobs are not the only basis for income inequality. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Chapter 4 Wealth and Income

Lessons from the Parade
Many Little People, Few Giants Only 2% of tax returns show income over $250,000. Living Standards Spans from those who cannot afford to own a home to those who own multiple residences. Job(s) The number of household income earners changes over the parade. Sources of Income Jobs are the main source of income for most households. Government transfer payments are crucial for those early in the parade. Income-producing assets are the largest source of income for those at the very end of the parade. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Lessons from the Parade, cont.
Occupation Occupational pay scales overlap, even for very different occupations. Women’s Shifting Role Women’s contribution or share of household income depended on where they were in the parade. Minorities Overrepresented early on in the parade; strongly represented in the middle; underrepresented toward the end of the parade. Income and the Class Structure The relationship between the distribution of income and the class structure is clear at the extremes but somewhat blurred in the middle. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Distribution of Income
The income gap between female- and couple-headed families is greater than between majority and minority families. However, female-headed families are more prevalent among minority households. Male-headed households have higher median incomes and are much less prevalent than female-headed ones. One out of every six families is female-headed. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Sources of Income Wages and salary provide most income for most people. Households in the bottom 40% of the income distribution receive a large share of their income in the form of government transfer payments (e.g., Social Security, veterans benefits, and public assistance). At successively higher levels, capitalist income (e.g., stock dividends, interest, and rents) and business profits provide increasing proportions of total income. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Income Shares The distribution of income is typically analyzed in one of two formats: The distribution of households across ranges of income. Depicted pictorially in the income parade and Table 4.1. The distribution of income shares among stratified segments of the population. Total income of all households as a national income pie. Figure 4.3 reveals that the richest fifth of households is 15 times that received by the poorest quintile. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Taxes and Tax Transfers The Government as Robin Hood?
The federal personal income tax is a progressive tax. In other words, people with higher incomes pay a greater proportion of their income to the IRS than do those with lower incomes. There are also what are referred to as regressive taxes (e.g., sales taxes). Regressive taxes take a higher proportion of income at lower income levels. Low wage workers spend a higher proportion of their incomes on consumer items and, therefore, lose a higher percentage of their incomes to regressive taxes like sales tax. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Taxes and Tax Transfers The Government as Robin Hood, cont.
Government transfer payments and noncash benefits increase the living standards of those families in the lowest income bracket However, the post-tax income distribution is largely indistinguishable from the pretax distribution. The richest fifth still claims almost half of all personal income. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How Many Poor? According to the federal government, in 2005 there were 37 million Americans living in poverty, about 13% of the population. However, the number of people considered to be in poverty depends on the definition that is used. In chapter 10 we will consider different definitions of poverty in order that you may draw your own conclusions about what this term means. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Women and the Distribution of Household Income
Older women are often dependent on the pensions and/or Social Security benefits of their husbands. Since women outlive men, they are often put in the precarious position of losing these sources of income and using up their savings. According to the Census Bureau, 5% of cohabiting wives over the age of 65 are in poverty. However, 19% of similarly aged women living alone are in poverty. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Women and the Distribution of Household Income, cont.
Divorce impacts women’s income more adversely than it does men’s. This is partly a result of child care responsibilities, which tend to borne by women, as well as, the meager child support payments they receive. Men actually increase their economic situation after divorce whereas women tend to experience a deterioration in their economic situation. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Women and the Distribution of Household Income, cont.
From 1960 to 2000, the labor force participation rate of women doubled. As men’s wages have stagnated, women’s contributions to household incomes have become increasingly critical in enabling families to either stay afloat financially or maintain a middle or upper-middle class standard of living. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Distribution of Wealth
Income is the inflow of money over a period of time (e.g., wages, interest, dividends); wealth is the value of assets held at a point in time (e.g., real estate, bank accounts, stocks, bonds). Wealth enables the maintenance of a particular standard of living in the event of a sudden drop in income. Most families do not have the type of wealth that would enable them to endure the hardship of going more than a month or two without income. Wealth provides an important mechanism for the intergenerational transmission of inequality. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Distribution of Wealth, cont.
Upwardly mobile African Americans with above average incomes lag far behind white peers due to the effects of historical racial inequality. Wealth is measured in two ways. Gross assets refers to the total value of assets someone owns. Net worth is a more realistic concept that refers to the value of assets owned minus the amount of debt owed. Most households derive the greater part of their net worth from three asset types: home equity, car equity, and bank deposits. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

There are three broad classes of wealth holders: The Near Propertyless Class In 2007, about 35% of households had net worths under $50,000. Most net worths are under $25,000, while some have negative net worths. The “Nest Egg” Class About 55% of households had net worths between $50,000 and $900,000. The Investor Class Just 10% of households had net worths greater than $900,000. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The concentration of wealth at the top is so great that the top 1% now holds more net worth than the bottom 90%. (This is shown in Table 4.7.) Ownership of corporate stock and mutual fund shares, bonds, investment real estate, and small business equity is almost entirely concentrated in the hands of the top 10% of wealth holders. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Trends in the Distribution of Wealth
The trend toward increasing inequality in the distribution of wealth was especially notable in the 1980’s. The wealth of the richest 1% has grown spectacularly since the mid-1970’s. At the same time that the wealthy have become wealthier, more Americans have become wealthy. The number of millionaire households has doubled in the decade following 1995. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Trends in the Distribution of Wealth, cont.
Gilbert identifies four factors that are important in accounting for the large increases in the number of wealthy families and the concentration of wealth: The rapid growth of incomes at the top of the distribution. The fortunes that have been made in the new information technology and other high-growth sectors of the economy. Declining tax rates for the top income bracket. The rise in the stock market since the early 1980s. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Trends in the Distribution of Income
By the year 2000, the ratio between the incomes of the bottom 40% and the top 5% was the highest ever measured in 50 years of government income surveys. During the Age of Shared Prosperity (1945 to early 1970’s) income growth was generally higher and more broadly shared. During the Age of Growing Inequality (mid 1970s +) income growth was fastest at top of the income distribution. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Income Dynamics There are few studies documenting the way in which individuals move up or down the income distribution over time. These types of studies are both difficult and expensive to conduct. The few existing studies have shown that individuals do tend to increase their incomes over their careers as they gain experience and successive promotions. They have also revealed a slowing of income mobility with fewer families moving up or down but remaining closer to where they were 10 years prior. Finally, the tendency for families to move from either extreme of the income distribution in the course of a decade is quite rare. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Changing Federal Tax Rates
Effective tax rates have fluctuated over the years. The nature of changes in the tax code are largely a function of whether there is a Republican or Democratic administration in office. Despite tax changes that have benefited those at differing positions in the income and wealth distribution, the overall result has been that those at the highest point in the income distribution have seen their effective tax rates decline most from © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Socialization, Association, Lifestyles, and Values
Chapter 5 Socialization, Association, Lifestyles, and Values

Bourdieu: The Varieties of Capital
Capital is defined as value accumulated over time and capable of yielding future benefits. Pierre Bourdieu distinguished among three forms of capital: Economic capital—the basic monetary form, institutionalized as property rights Cultural capital—knowledge in its broadest sense, institutionalized as educational credentials, but also including such things as etiquette Social capital—mutual obligations embodied in social networks such as kinship, friendship, and group membership © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Bourdieu: The Varieties of Capital, cont.
According to Bourdieu, the value of each of the forms of capital is enhanced by its capacity for transformation into one of the others. The sum of the various forms of capital is the cumulative advantage of the privileged class. The advantages the children of the affluent inherit are not solely economic but also social and cultural. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Children’s Conception of Social Class
Children, by way of their elders, gain increasingly sophisticated notions of social class throughout their childhood. At a young age, they are often able to make social class and occupational prestige distinctions that correlate with the perceptions of adults toward these same issues. As children grow older, their ideas about stratification become more consistent, abstract, and “accurate.” At 12 years old, children’s perceptions of social class are quite similar to those of adults. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Kohn: Class and Socialization
Research has shown that the child-rearing practices of parents are conditioned by their social class. Kohn studied class differences in the values parents impart to their children in an effort to understand why such differences exist and how they contribute to the perpetuation of the class system. According to Kohn, middle class parents are more likely to stress the values of self-control, curiosity, and consideration. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Kohn: Class and Socialization, cont.
In contrast, working-class parents are more concerned with cultivating obedience, neatness, and good manners. Self-direction and empathetic understanding of others vs. instilling behavioral conformity At successively higher class levels parents value self-direction more and conformity to external standards less. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Kohn found that different value orientations arise out of different occupational experiences. Managerial jobs tend to allow for more individual judgment and initiative. Blue-collar jobs tend to be more routinized . So, occupational experiences shape value orientations, which in turn shape parental value preferences for children. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Education was found to have an independent effect on parental value orientations and value preferences for children. The impact of occupational experiences was found to be a stronger predictor. The difference in the way middle- and working-class parents attempt to cultivate certain behaviors is important. If parents simply “inculcate values that reflect their experience of the class system, they are preparing their children to assume a class position similar to their own and, by so doing, are contributing to the long term maintenance of the class system” (p. 99). These parents may actually think that they are cultivating in their children the values that will enable them to ascend the class hierarchy. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Lareau: Child Rearing Observed
Lareau’s research focused on families at three class levels: middle class (upper-middle?), working class, and poor. The sample included both black and white families at all three class levels. The middle class parents in Lareau’s study were more likely to engage in child-rearing practices that could be described as cultivated growth. The working class and poor parents in her study were more likely to engage in child-rearing practices that emphasized the accomplishment of natural growth. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Lareau: Child Rearing Observed, cont.
Lareau’s observations identify three facets of children’s lives: Organization of daily activities Middle-class families: the activity calendar Working-class and poor families: less structure, less resources and the adult realm/child’s realm distinction Use of language The high degree of parent-child conversation in middle-class families is meant to encourage language skills development. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Lareau: Child Rearing Observed, cont.
Relations with institutions such as schools Middle-class parents are more likely than working-class and poor parents to encourage their children to ask questions, to negotiate for what they want, to express their opinions, and to expect institutions to respond to their needs. Working-class and poor parents are often intimidated by institutions and those who represent them. Lareau’s research demonstrates the power of social class in shaping the lives of the young. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

School and Marriage Children and adolescents tend to associate with people of similar class backgrounds. This pattern is also seen when upper-class and upper-middle class parents send their children to private schools. However, class specific patterns of association can even be seen in public high schools. In public high schools these patterns are often a function of a curricula that is based on academic ability or postgraduation aspirations, that is itself correlated with social class. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

School and Marriage, cont.
Mate selection is also influenced by social class. A study by Laumann during the 1960’s found that endogamous marriages were especially prevalent in the upper-middle class. Endogamous marriage results in the transmittal of a consistent set of class influences on children. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Marriage Styles Social class shapes marital relationships. Rainwater identified 3 types of marital relationships that could be placed on a continuum. Joint relationships There is a focus on companionship and a de-emphasis on the sexual division of labor. When a spouse does follow a traditional gender role, each partner is expected to take a sympathetic interest in the concerns of the other. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Marriage Styles, cont. Segregated relationship These are characterized by a clear differentiation of concerns and responsibilities (i.e. traditional gender roles). Intermediate relationships These fall between the two other groups in terms of the degree to which spouses adhered to traditional gender roles. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Marriage Styles, cont. Reported marital happiness increases as class level increases, especially for women. The relationship between marital happiness and social class is tied to the character of the organization of marital roles. Upper-middle class relationships are more likely to be characterized by a joint relationship. Segregated relationships are becoming increasingly more common at lower levels of the class structure. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Blue-Collar Marriages and Middle-Class Models
Growing numbers of working-class women are becoming increasingly more likely to express their desires for marital relationships closer to the joint relationships identified by Rainwater. Working-class men have slowly become more willing to agree that gender equality in marriage is important. However, researchers such as Rubin (1994) and Halle (1984) find that there is a wide gap between these professed ideals and everyday behavior. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Social Class and Domestic Violence
Domestic violence is found in all social classes though it is more prevalent at lower class levels. Young adults are the most prone to violence in relationships. This is especially true in difficult economic times. Domestic violence is probably even more prevalent than current statistics indicate due to the tendency of families to keep it secret. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Social Class and Domestic Violence, cont.
The incidence of domestic violence is even more prevalent during periods of unemployment. According to the National Crime Victimization Survey, domestic violence occurs most frequently between the ages of 16 and 34. Also, women between the ages of 16 and 35 in the lowest income bracket are 3 to 5 times more likely to be victimized than their peers in the top income category. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Informal Association among Adults
Numerous studies suggest that patterns of association are shaped by social class, though they are conditioned by related social factors such as gender, race, religion, and shared interests. Laumann (1966) surveyed 422 white men in the Boston area and found that the blue-collar/white-collar line was a barrier to friendship. Only 25% of all close friendships in the study were between blue-collar and white-collar workers. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Informal Association among Adults, cont.
The literature on social class and patterns of association suggests that people at higher class levels share seven characteristics: They have more friends and more active social lives. They are less likely to preserve friendships from their youth. They spend proportionately less time with relatives. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

They are more likely to entertain friends at home and host dinner parties. They are more inclined toward couple-oriented social activities. They are more likely to develop (nonromantic) cross-sex friendships. They are more likely to mix career and social life. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How do we account for these patterns? Money—Many of the activities in which members of the upper-middle and upper classes regularly engage would be prohibitively expensive for those from the working- and lower-middle classes. Propinquity—Members of the upper-middle and upper classes live in different types of neighborhoods and have different types of jobs. Both limit contact with members of the working- and lower-middle classes. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Additional factors that also account for the limited numbers of cross-class friendships include: matters of prestige style interests values comfort level © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Formal Associations Participation in formal associations is patterned by social class. Members of the upper-middle and upper classes are more likely than all other social classes to participate in formal associations. When formal association membership cuts across class lines, members of the upper-middle and upper classes are most likely to serve in leadership positions. This is due in part to the organizational skills acquired through their formal educations but also to their desire for the prestige attached to such positions. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Separate Lives Journalist Mickey Kaus (1992) argues that social equality has died. People routinely and unabashedly make class distinctions between themselves and those below them in the social class hierarchy. This is not simply an argument about money. It is about the disappearance of a public sphere where all Americans can come to be heard on more or less equal terms. Kaus attributes this shift that has occurred since the 1950s to the highly segregated residential and social spheres to which members of the upper-middle and upper classes retreat. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Social Mobility The Societal Context
Chapter 6 Social Mobility The Societal Context

What is Social Mobility?
Social mobility is the extent to which people move up or down in the class system. Intergenerational social mobility is movement up or down the in the class system from one generation to the next. Intragenerational social mobility is movement up or down in the class system in a single generation. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How Much Mobility? What chance does the son of an unskilled worker have of attaining a professional or managerial position? What are the social origins of people in high status occupations? To answer these questions, we will look at an “outflow” table that starts with fathers and asks about the mobility of their sons. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How Much Mobility? cont. Several conclusions can be drawn from Table 6.1: There is a high level of occupational inheritance -- sons follow fathers into jobs at the same occupational level. The higher the father’s occupational level, the better the son’s chances for occupational achievement. There is considerable movement up and down the occupational ladder from one generation to the next. By a considerable margin, sons are more likely to move up than down. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How Much Mobility? cont. Patterns of intergenerational mobility may also be studied by constructing an “inflow” table that starts with sons and asks about their fathers. From where do people at different levels in the occupational structure come? © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Wealth Mobility The majority of studies of social mobility have focused on occupational mobility as opposed to other stratification outcomes such as income or wealth. Occupation has traditionally been used as a measure of stratification because of convenience and stability. Recent longitudinal studies have enabled us to examine both intergenerational wealth and intragenerational income mobility. An examination of the effect of parental wealth on the wealth of adult children indicates the likelihood of these children experiencing either positive or negative social mobility is about equal. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Social Mobility of Women
Most studies of social mobility have focused on men typically because of women’s limited labor force participation. Though women’s representation in the paid labor force increased significantly over the latter part of the 20th century, there are still problems in studying women’s mobility. E.g., With whom do we compare women workers—their mothers or their fathers? © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Social Mobility of Women, cont.
With the understanding that there are some problems in comparing the occupations of women with those of their fathers due to the history of women being disproportionately represented in “pink collar” occupations, we can still gain a preliminary picture of women’s mobility. Women’s occupational attainment is powerfully influenced by social class; however, there is also evidence of mobility. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Circulation and Structural Mobility
Two basic factors allow for more or less mobility up or down the occupational hierarchy: Circulation mobility: In order for sons or daughters to move up the occupational hierarchy someone else must move down (i.e. a “zero sum game”). Structural mobility: Technological and organizational change that creates jobs at a faster rate in the middle and upper levels of the occupational structure. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Circulation and Structural Mobility, cont.
In modern societies we find both of these processes at work. It is not possible to determine whether a particular individual’s movement up or down the occupational hierarchy is due to structural or circulation mobility. We can get a general sense of occupational change by examining occupational trend data. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Declining Social Mobility
In recent years upward social mobility has decreased and downward social mobility has increased. Structural mobility has declined, particularly for younger workers. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Family, Education, and Career
Chapter 7 Family, Education, and Career

Introduction American political leaders have traditionally endorsed high rates of social mobility. Though most Americans believe that some inequality in society is acceptable, they also believe in “equality of opportunity.” Every American should have the opportunity to compete in the various social arenas based on their own merits and talents. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Introduction, cont. This does not necessarily imply that all Americans believe in “equality of results.” Most Americans feel the educational system is the great equalizer providing everyone with the opportunity to transcend whatever social class they were born into. But, is educational opportunity currently distributed in a way consistent with it being labeled as the “great equalizer”? © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Blau and Duncan: Analyzing Mobility Models
The study of social mobility is complicated due to the frequency with which relevant variables are correlated. Additionally, the nature of the relationship among these variables makes it even more difficult to interpret. (See Figure 7.1.) Understanding the causal influence of the multiple variables related to social mobility is quite challenging. Peter Blau and Otis Dudley Duncan (1967) conducted a methodologically innovative study that analyzed the complex multivariate relationship between career success and failure. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Blau and Duncan: Analyzing Mobility Models, cont.
Blau and Duncan conceptualized two key aspects of the problem: Chains of causation: In this case, father’s occupation influences son’s education, which in turn shapes son’s career prospects. Multiple causal pathways: In this case, father’s occupation influences son’s education and later directly influences son’s job search. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Blau and Duncan: Analyzing Mobility Models, cont.
Figure 7.2 provides us with three interesting findings: Family background, through education, is a significant contributor to career success (14% of variance explained). Family background, independent of education, significantly contributes to the career success of son’s SES (7% of variance explained). Education has an independent effect on individual’s career success. The model also suggests that total family background (1 and 2) and education independently (3) are equal in their influence on career success. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Jencks on Equality Jencks and his colleagues (1972) at Harvard attempted to integrate most of what was known about “status attainment” into one grand model that would include more variables than Blau and Duncan had studied. They utilized secondary data and added income as the final dependent variable in the causal chain, after SES. The new model, which used income as the final dependent variable instead of occupational prestige, reduced the measured impact of education on life chances. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Jencks on Equality, cont.
Jencks and his colleagues suggested that to bring about greater equality a change had to be made in the way people are remunerated in the labor market. For example, high level executives should be paid less, and low skilled service workers should be paid more. They believed that discussions centering around the way the education system could be changed to bring about better opportunities for those from lower class backgrounds simply distracted Americans from the real issue. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Jencks and his colleagues also incorporated a measure of “cognitive ability”—son’s IQ at age 11. They estimated that barely a quarter of the variance of the incomes of adult men could be predicted by combining all the usual predictors: family background, IQ scores, years of education, and even job title. Jencks and his research team suggested that though these factors are still related to career success, luck and other unmeasured factors seem to be more important. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Although methodologically sound, Jencks’s research was severely criticized; many were upset by the implications of the word “luck.” A second round of later studies by Jencks simply confirmed his earlier estimates, which had, in fact, become more accurate. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Stratification of Higher Education
A college degree is becoming increasingly necessary in our postindustrial labor market. The income gap between high school and college graduates is growing. Two studies conducted during the mid-1970’s found that IQ, SES, and gender strongly influence who attends college. 25 years later the findings are very similar except that the gender gap has all but disappeared. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Stratification of Higher Education, cont.
A more recent study titled “High School and Beyond” conducted during the 1980’s considered the impact of IQ and SES on college attendance. Nearly all the high-ability graduates from high-status families but very few low-ability graduates from low-status families went to college (83% vs. 13%). The findings at the extremes like this are entirely predictable. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

What about those students with average IQ scores and class standing? 57% of top SES high school grads with just below-average abilities were in college compared to 33% of bottom SES kids with just above-average abilities. Mental ability and social class are strong independent determinants of educational attainment. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Despite overall increases in the proportion of Americans attending college since 1970, there remains a significant income gap in terms of who attends college who does not. Class disparities in rates of completion are even greater, and the gap has grown wider since the early 1970’s. Two-year community colleges tend to draw their students from the lower half of the income distribution. Private colleges and universities recruit disproportionate numbers of students from high-income families. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Patterns of U.S. college attendance and graduation support one of two views of higher education: It is large enough to provide sufficient opportunities to youths from lower- and middle-class families to gain the training and credentials necessary for them to improve their social class standing relative to their parents. It is sufficiently stratified that its main function is to reproduce for each generation of children the status positions held by their parents. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Both views are true. The system is relatively open to the ambitious and talented, but it is remarkably successful at reproducing the privilege of the privileged. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Elites, the Capitalist Class, and Political Power
Chapter 8 Elites, the Capitalist Class, and Political Power

Three Perspectives on Power
What is power? The potential of individuals or groups to carry out their will even over the opposition of others. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Three Perspectives on Power, cont.
What are the three perspectives about power? Elite perspective: It is concerned with the distinction between an organized minority (elite) that rules and an unorganized majority that is ruled. Class perspective: With its origins in Marxist theory, it is more specifically concerned about the identity of the rulers and the structure that creates them (i.e. the capitalist class). Pluralistic perspective: This view denies power is concentrated in one group. In democratic societies it identifies a plurality of interest groups that vie for power. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Mills: The National Power Elite
In 1956 C. Wright Mills published The Power Elite which suggested the growing power of a few was undermining American Democracy. This “power elite” was comprised of the most senior leaders of the modern corporations, the executive branch of the federal government, and the military establishment. Mills suggested that there was an interlock among these institutions and that members of the power elite tended to circulate among these three institutions. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Mills: The National Power Elite, cont.
Mills conceived the national structure of power as consisting of three tiers: The power elite The middle levels of power (e.g., powerful lobbying groups and labor unions) Mass society Crucial decisions about economic policy and national security with sweeping ramifications for the lives of the common citizens are made by the power elite. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Mills, His Critics, and the Problem of Elite Cohesion
Pluralist critics of Mills’ hypothesized power elite argued that his claims were empirical matters that needed to be tested not simply assumed a priori. Dahl (1967) questioned the extent to which Mills’ power elite were a cohesive group with unitary interests. Dahl was concerned that Mills defined an elite in terms of key positions in organizations that possess vast resources, but he failed to elaborate a theory of political consensus. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Mills, His Critics, and the Problem of Elite Cohesion, cont.
According to Reisman (1953) a ruling class with concentrated power no longer existed. There was instead a plurality of “veto groups” capable of resisting the attempts of the powerful to impose their will on society. Mills suggested that Reisman’s argument simply reflected the workings of what he called the “middle levels of power.” © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Mills, His Critics, and the Problem of Elite Cohesion, cont.
Mills suggested two ways the three distinct elites might be melded into a single, internally cohesive power elite: Social-psychological mechanisms including similarities in origins, education, career and lifestyles which produce a “similar social type” and contributes to ease in informal association. Structural mechanisms including similar career experiences, particularly managing large organizations, and the interchange of personnel that occurs among the three institutions. Mills suggested this enables these individuals to develop a form of Upper-Class consciousness. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Power Elite or Ruling Class?
Paul Sweezy (1968) suggested that Mills' The Power Elite contained an unresolved contradiction between two views of the elite. Mills' discussion of the importance of the ruling class in stocking the “command posts” with its representatives is contradictory to the idea that the bureaucratic elites situated atop the three distinctly separate and autonomous “major institutional orders” come together to form the power elite. Sweezy argued that the class that controls income-producing wealth (i.e. the ruling class) is actually the group that wields the most power. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Who Rules? Thomas Dye (2002) argued that America is an “elitist” society and that elite rule is inevitable in all societies, from the simplest to the most advanced. The United States, dependent on large institutions, is ruled by those who hold the top institutional positions—the elite. Dye’s elite consisted of 7,314 leadership positions in 10 key sectors of American society. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Who Rules? cont. Dye was concerned with the phenomenon of “interlocking directorates.” Though there are factions within the elite, overall they are of one mindset. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Who Rules? cont. From a pluralist perspective, Lerner, Nagai, and Rothman (1996) contended there are a plurality of elites, not simply one core “power elite” as suggested by Mills. These elites wield significant power, but their influence is restricted to the particular sector in which they operate (e.g., the media, the military, and the business sectors). Members of the “strategic elite” are characterized by a high degree of ideological dissimilarity; however, Lerner, Nagai, and Rothman’s evidence in support of this contention is not very strong. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Who Rules? cont. In his book Who Rules America (2006), William Domhoff examined a particular elite group, the directors of major corporations. Domhoff’s research analyzed almost 2,000 large corporations and found that the average firm had 6.1 interlocks. The corporate community is “closely intertwined with the upper class.” There is evidence that there is an increased presence of minorities and women in the boardrooms. Yet, this in no way changes the atmosphere of the boardrooms since these individuals still tend to come from Upper -Class backgrounds. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Who Rules? cont. What do Dye, Domhoff, and Lerner and colleagues have in common with Mills? They all agree that power in this country is concentrated in the elites at the head of large organizations in key sectors of American society. They all agree that members of the elites come from relatively privileged backgrounds. All address the problem of elite cohesion. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The National Capitalist Class: Economic Basis
A traditional division within the capitalist class has been between the following two groups: National capitalists who own or manage major national corporations, and Local capitalists who are affluent but community-oriented business people. This distinction has become less meaningful in recent decades as local capitalists convert their fortunes into diversified national wealth. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The National Capitalist Class: Economic Basis, cont.
Forbes annually publishes a list of the 400 wealthiest individuals identifying them as either inherited or self-made. An independent analysis of the 1997 list paints a more complicated picture with four levels of inherited wealth. Inherited 400 Status—42% Inherited Significant Wealth—13% Inherited Lesser Wealth or Advantage—14% were from affluent or socially-upper class backgrounds No Inherited Advantage—31% began their careers with no apparent financial advantage © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The National Capitalist Class: Economic Basis, cont.
Mills thought large individual fortunes paled in significance to the economic power of large corporations. Extremely wealthy families used to have substantial stakes in major corporations. As corporations have grown larger, their stock has become more dispersed. Small- and medium-sized corporations are still likely to be controlled by their owners. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The National Capitalist Class: Social Basis
The institutions associated with the Upper-Class social world include the elite prep school, the Social Register, and elite metropolitan social clubs. These institutions perform a national integrating function. The regular social interaction between members of the Upper Class in the informal social setting that these institutions provide enables the development and maintenance of class solidarity and the achievement of consensus on specific policy issues. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The National Capitalist Class: Participation in Government
Contemporary cabinets are more diverse in ethnicity and gender but are still overwhelmingly drawn from the very top of the class structure. Between 1897 and 1980, two-thirds of cabinets had served as corporate officers, investment bankers, or corporate lawyers. From 1961 to 2000, 65% of cabinet officers were drawn from major corporations, financial institutions, or corporate law firms. In modern times cabinet secretaries have tended to come from higher levels in the class structure than the presidents they served under. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The National Capitalist Class: Participation in Government, cont.
Since 1906 most members of Congress have come from business or the professions. At least two-thirds of Senators and 40% of House members are worth a $1 million or more. Almost 20% of senators and 10% of House members are worth $10 million or more. The cabinet is recruited from the national Capitalist Class; Congress draws on local Upper-Middle and Capitalist Classes. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Money and Politics Who makes campaign contributions? Studies going back to the 1920’s indicate contributors, not surprisingly, are better educated, higher in occupational status, and richer than the average American. There are now regulations in place (i.e. campaign finance reform legislation), though not heavily enforced, that restrict the amount of money that can be directly contributed to political candidates. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Money and Politics, cont.
Courts have ruled that no limit can be placed on the amount that candidates or their families can spend on their own campaigns. Still, most campaign money comes from business sources such as individual corporate executives and corporate political action committees (PACs). © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Business Lobbies Especially since the emergence of the modern corporate economy, business representatives have actively lobbied the Congress and the federal departments and regulatory agencies that carry legislation into practice. Two of the most powerful business lobby organizations in Washington are the U.S. Chamber of Commerce and the Business Roundtable. The Chamber is particularly strong due to its ability to pressure individual members of Congress through local affiliates. The Business Roundtable draws its power from the formidable resources controlled by its member corporations and the prestige of those who lead them. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Policy-Planning Groups
Policy groups are organizations dedicated to formulating and disseminating broad proposals for national policy. They are largely created and financed by the corporate elite. Major charitable foundations fund research and pilot projects to test new policy ideas. E.g., Ford, Lilly, and Kellogg foundations © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Policy-Planning Groups, cont.
Think tanks are organizations staffed with experts in various fields who produce research findings and policy recommendations. They are often located in Washington, D.C., where they are able to provide sympathetic politicians, lobbyists, and journalists with grist for their respective interests. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Indirect Mechanisms of Capitalist-Class Influence
Capitalist-Class influence is not limited to direct means. The influence that the Capitalist-Class has over government policy is also indirect through its control of the economy and the mass media. Many of the decisions made by business leaders depend on their level of confidence in the government and its policies. One of the primary decisions made by business leaders concerns the level of new investment. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Indirect Mechanisms of Capitalist-Class Influence, cont.
Factors that lead to a loss of confidence are less important than the fact that this mechanism provides the Capitalist Class with an indirect veto over government policy. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

There are two important implications of the business-confidence veto: The mere risk of the curtailment of investment is often enough to persuade decision-makers to reconsider or abandon a particular policy proposal. The veto mechanism does not require conscious, concerted action by members of the Capitalist Class to be effective. Large numbers of individual investors making decisions based on potential risk or profitability can bring about changes in the economy and can put pressure on government officials. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Governments are also subject to the limits imposed by private control of the mass media. The principal media organizations in the U.S. are themselves typically major corporations owned by major corporations. Corporate advertisers also wield some influence in that they can choose where to spend their advertising dollars. The media is extremely powerful because they help define the public agenda—what is considered “acceptable.” © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Capitalist-Class Resurgence
The idea that the distribution of power is stable over time is probably not a safe assumption. In the early 1970’s capitalists had a growing sense of vulnerability and declining power and reacted to this. Business leaders took a direct and aggressive role in national politics. Upscale “grassroots” campaigns mobilized business leaders, stockholders, depositors, suppliers and dealers to lobby Congress. The Heritage Foundation and the American Enterprise Institute were founded and received financial backing from the wealthy. Their efforts paid off. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Class Consciousness and Class Conflict
Chapter 9 Class Consciousness and Class Conflict

Introduction: Class Consciousness
What is class consciousness? It includes all of the following: Awareness of membership in a group defined by economic position. Sense that this shared identity creates common interests and a common fate. A disposition to take collective action in pursuit of class interests. Although revolution is rare, class struggle is common. Revolution includes slave revolts, violent strikes, riots . Class struggle includes union organizing activity. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Introduction: Class Consciousness, cont.
The following causal sequence will inform our discussion of this chapter: Objective Class Position  Class Consciousness  Class-Oriented Political Behavior © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Marx and the Origins of Class Consciousness
One of Marx’s major objectives was to isolate the social conditions that encourage class consciousness. Factors he regarded as especially significant include: Concentration and communication Deprivation Economic insecurity Alienation at work Polarization Homogenization Organization and struggle © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Marx and the Origins of Class Consciousness, cont.
The revolutions that Marx’s theory anticipated in the advanced industrial countries never occurred. However, class-based revolutions in industrializing agrarian states were a characteristic feature of 20th century history. Marx did correctly identify many of the key sociological processes in the development of class consciousness. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Richard Centers and Class Identification
Contemporary interest in the concept of class consciousness is based on the idea that it connects objective class position and political behavior. The assumption embedded in this concept of class consciousness is that people who recognize and articulate their class position are more likely to promote their class interests. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Richard Centers and Class Identification, cont.
Centers (1949) found in most public opinion surveys when individuals were asked to identify their social class in a forced, close-ended fashion with lower-, middle-, and upper-class options, most people indicated they were middle class. This was particularly true in a famous survey conducted by Fortune magazine in 1940. When working-class was added as an option in a nationally representative sample of adult white men, Centers found the majority of respondents indicated they were working-class. He concluded Americans did not like the term “lower class” and not that most Americans thought of themselves as middle class. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Centers regarded occupation as the principal basis of class identification. Subsequent scholars have confirmed this view noting that individuals do indeed use their occupation in determining to which social class they belong. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Where Centers' studies of class identification only considered men, subsequent studies have included women. These studies have typically found that class identification of working wives is influenced by both their own and their husbands’ occupations, though the influence of the husband’s job is typically stronger. The wife’s attitudes toward gender roles is a key factor in influencing whether she uses her husband’s occupation for her sense of class identification or her own. Women who subscribe to traditional gender roles are more likely to base their class identity on their husband’s occupation . © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Centers showed that political opinions were affected by class identification. Political opinions are influenced by both objective class position (measured by wealth) and subjective class consciousness (indicated by class identification). When consistent with objective class position, class identification strengthens the effect of class. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Bott: Frames of Reference
Elizabeth Bott (1954) pointed out that “people do not experience their objective class position as a single clearly defined status.” An individual’s self-perception in a stratification order is a combination of the following: Actual experiences in a wide variety of contexts in many membership groups. Verbal theories about society, usually vague and somewhat contradictory commonsense notions which filter down from the theorizing of intellectuals and propagandists. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Elections and Democratic Struggle
Class conflict is especially evident in two realms: Electoral politics Labor relations Exit polling in recent elections has shown a strong relationship between income and party vote. Members of the Working Class more often support Democratic candidates, where members of the Upper- Middle Class and Upper Class tend to support Republican candidates. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Elections and Democratic Struggle, cont.
The political power of organized labor has declined considerably as its ability to mobilize a declining union vote has resulted in a Democratic party less attentive to its needs. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Class, Party and Support for Social Programs
Most members of the Working Class in America tend to identify with the Democratic party. Majorities of Americans favor increased spending on education, health, child care, Social Security, and “aid to the poor.” Perhaps unsurprisingly, support for these issues is strongest among those Americans at the bottom of the occupational structure. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Class and Political Participation
Since a majority of Americans DO support liberal spending on social issues and a majority of the public is inclined toward the Democratic Party, why is it that liberal Democrats are not consistently elected to office and liberal measures are not regularly enacted? The generally more conservative Republicans toward the top of the class structure are more likely to be better informed politically and to be more politically active than those toward the bottom of the class structure. Those toward the top of the class structure also contribute more money to political campaigns, and they do so more often. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Trends in Class Partisanship
Evidence suggests that class, defined by occupation, continues to be politically significant. Lower-income voters have become more likely and higher-income voters less likely to identify as Democrats and vote for Democratic candidates in national elections. It may be that individuals are becoming more aware of the diverging fortunes between a small group of privileged Americans at the top of the class structure and those Americans in the Middle and Lower Classes whose prospects have declined in the Age of Growing Inequality. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Class Conflict and the Labor Movement
Organized labor in the U.S. has tended to focus on securing union recognition, economic security, and decent working conditions rather than on making fundamental changes in the system. This has contributed to formation of a rather weak class consciousness among America’s Working Class. Employers have also played an instrumental role in suppressing union formation by exploiting differences of race, ethnicity, and skill level among workers. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Class Conflict and the Labor Movement, cont.
By 1938 the right to union representation had been written into law through the National Labor Relations Act, also known as the Wagner Act. The Wagner Act also prohibited employers from interfering with union formation and set up a National Labor Relations Board (NLRB) to ensure compliance. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Postwar Armistice: Unions in an Age of Shared Prosperity
During the decade following World War II, business leaders essentially accepted the existence of unions. However, business leaders were adamant they retain the right to manage. This meant controlling issues such as: Investment (including plant openings and closings), Product design and production methods, and Pricing of final products. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Postwar Armistice: Unions in an Age of Shared Prosperity, cont.
During this period the labor movement became satisfied and unaggressive. Labor came to play a more dynamic role in national electoral and legislative politics than it did in the workplace. The labor lobby played a major role in obtaining passage of liberal legislation in such areas as civil rights, health care, minimum-wage protection, public employment programs, nutrition programs for the poor, and occupational health and safety. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Labor in Decline Union membership in the U.S. had been declining since the mid-1950’s; however, it dropped drastically during the 1980’s. By 2008 only 12.4% of all wage and salary workers were union members. The American labor movement is at its weakest since the 1920’s. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Labor in Decline, cont. Capitalist opposition to union activity has increased over the past three decades. Businesses now routinely secure the services of labor consultants who apply social scientific knowledge in an attempt to reduce the strength of unions and the likelihood of union success. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Poor, the Underclass, and Public Policy
Chapter 10 The Poor, the Underclass, and Public Policy

The Beginnings of Welfare: Roosevelt
During the Great Depression, the Roosevelt administration worked with Congress to provide Americans suffering under the extremely poor economic conditions with various forms of government relief. One initiative was a large-scale program that provided “direct relief”—cash payments to families in desperate need. It was managed by the individual states. The 1935 Social Security Act established a national social insurance program. Enrolled individuals would receive full coverage after 10 years of contributions made by employees and employers. A system of unemployment insurance was also established. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Beginnings of Welfare: Roosevelt, cont.
These types of programs are referred to as entitlements. All who meet specified prerequisites are entitled to receive them, and the government is committed to providing the necessary funding. Some entitlements, such as Aid to Families with Dependent Children (AFDC) and related public assistance programs, are “means-tested” -- they are only available to people with incomes below a specified threshold. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Rediscovery of Poverty: Kennedy and Johnson
During the Kennedy and Johnson administrations ( ), three new programs were initiated: the food stamp program Medicare Medicaid Johnson regarded what he called the “War on Poverty” as one of the top priorities of his administration. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Official Definition of Poverty
Mollie Orshansky (1974), an economist with the Social Security Administration, developed a measure of poverty that would become the official federal standard. Orshansky put two pieces of information together from government surveys: The cost of a minimum nutritious diet for a family of four. The proportion of income the average family then spent on food. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Official Definition of Poverty, cont.
In 1960 Orshansky calculated the poverty line for a family of four to be $3,000. By 2008 the poverty line was $22,000. The official poverty line is adjusted annually for inflation, but it does not take into consideration standard of living. The poverty line measure has been criticized for underestimating the number of Americans in poverty. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How Many Poor? Who are the Poor?
Between 37 and 65 million Americans are poor. Race and poverty There are many more white poor than black or Hispanic poor. Blacks, although a minority of the poor, are 3X more likely than whites to be poor. Hispanics are two and half times more likely than whites to be poor. Age and poverty A high proportion of the poor are children. Few of the poor are elderly. The rate of poverty among seniors declines significantly after accounting for cash transfers. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

How Many Poor? Who are the Poor? cont.
Gender and poverty There are about as many poor in families headed by married couples as in families headed by single women. Even after cash transfers to female-headed households with children, a large percentage remain in poverty. Geography and poverty Only a minority of the poor live in the central cities of metropolitan areas. The majority are spread out among suburbs, small towns, and rural areas. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Trends in Poverty Similar to the trends we observed for wages, income, and wealth, poverty rates have shifted with the transition from the Age of Shared Prosperity to the Age of Growing Inequality. The rate of poverty among families with children has not seen the same level of decline witnessed among seniors. The proportion of people with household incomes under half the poverty level has climbed substantially since the late 1970’s. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Underclass and the Transitory Poor
Many Americans experience poverty temporarily due to loss of a job, physical injury, or divorce. Those who experience poverty as a result of these events are often able to climb out of poverty after a short period of time. However, many others are unable to lift themselves and/or their families out of poverty, often due to the following conditions: Disability, Meager retirement incomes, Low-wage jobs, and The inability to hold a job for a variety of reasons. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Underclass and the Transitory Poor, cont.
University of Michigan’s Panel Study of Income Dynamics (PSID) has tracked the incomes of a large national sample of families since 1969. Their data indicates about a quarter of all families will be poor at least once in a 10-year period, but only a fraction of them will remain poor for an extended period. The majority of children who are raised in poverty are not in poverty as adults. However, the likelihood of blacks remaining in poverty is 1 in 4 compared to a 1 in 10 for whites. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Underclass and the Transitory Poor, cont.
The term “underclass” is applied to a smaller subset of the poor who are bound to their impoverishment by personal characteristic or structural circumstances. This is a controversial term since the label often implies flawed character. Sociologist William J. Wilson accepts the grim portrait of the poor and defines members of the underclass as having marginal economic positions coupled with geographic isolation. Wilson focuses on the inner-city poor who are caught in the postindustrial economic trap of shrinking job opportunities. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Restructuring Welfare
As the entitlement programs enacted during the 1960’s and 1970’s began to consume a greater proportion of the national budget, public opposition to them increased. Under the Clinton administration, the Personal Responsibility and Work Opportunity Act (1996) scaled back three of the major means-tested programs: Aid to Families with Dependent Children (AFDC) Supplemental Security Income (SSI) Food Stamps © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Restructuring Welfare, cont.
The 1996 welfare reform legislation instituted major changes in the way AFDC was distributed. AFDC lost its entitlement status and became Temporary Assistance for Needy Families (TANF). States’ distribution of this form of assistance was now subject to two key limitations: Families could not receive more than five years of assistance, whether consecutive or nonconsecutive. Most adults benefiting from TANF would be required to begin work of some sort within two years of receiving assistance. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Restructuring Welfare, cont.
The welfare reform of 1996 coupled with other factors (including a period of economic expansion and declining unemployment) reduced welfare dependency. However, the welfare reform of 1996 was less successful in reducing poverty in the United States. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Mystery of Persistent Poverty
Since the early 1970’s, the United States’ economy has more than doubled, and mean family income has increased by nearly 50%. This remarkable economic growth has not resulted in reduced poverty levels, which are similar to what they were in the early 1970’s. Three factors may help account for the current rate of poverty: economic change, a society-wide revolution in family patterns, and shifts in federal policy. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Mystery of Persistent Poverty, cont.
Economic Trends The Age of Growing Inequality has seen a proliferation of unattractive, low-wage, and sometimes hazardous jobs. This period has also witnessed a significant decline in the number of better-paying blue-collar jobs. Recessions and high unemployment have also had an effect on the rate of poverty. Finally, even as more members of poor families have been working more hours in recent years, they have been working longer hours for lower real wages. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Changing Family Patterns Since 1960 sweeping changes in family patterns have reinforced levels of high unemployment. Americans have become less likely to marry and more likely to divorce. Children are 6X more likely to be born to unwed parents. Families with children are almost 2X as likely to be headed by females. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The proportion of the poor population living in female-headed families has nearly doubled from 18% in 1960 to 35% in 2007. Divorce and unwed motherhood are no longer stigmatized as they once were; Americans have become much more tolerant in this regard. Single mothers face a number of difficulties that have an effect on their job earnings. For example, the conflict between the nurturer and provider roles are especially tough for single mothers who bear the burden of raising their children alone. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Government Policy The failure of the government to uphold the value of the minimum wage and maintain the protections of the unemployment insurance system have certainly pushed some working poor families below the poverty line. In addition, since the 1980’s, national policy has focused on reducing inflation rather than maintaining employment as well as on increasing profits rather than upholding wages. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The American Class Structure and Growing Inequality
Chapter 11 The American Class Structure and Growing Inequality

How Many Classes Are There?
According to Gilbert, there are six social classes in the United States: Capitalist Class Upper-Middle Class Middle Class Working Class Working Poor Underclass This model of the American class structure is based on qualitative economic distinctions. The emphasis is on the source of income as opposed to the amount of income. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Capitalist Class The Capitalist Class has a strong influence on the nature and direction of the economy largely as a result of its investment decisions. The economic resources of members of this class also enables them to operate within the world of politics and the media in ways that reinforce their structural position while at the same time shaping the views of other classes. This class is defined by its dependence on income-producing wealth. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Upper-Middle Class
The Upper-Middle Class is a highly credentialed group. It can be distinguished from the Capitalist Class not only because of lower incomes but because the majority of the income is acquired through salaries and/or professional fees as opposed to income-generating wealth. This class’s ever-increasing purchasing power is making its members more influential with their lifestyle becoming increasingly normative for the whole society. The income gap between the Upper-Middle Class and the non-privileged classes has widened . © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Middle Class The changing character of work has largely eliminated traditional differences between blue- and white-collar work. The Middle Class is large and diverse. Though some commentators have argued that the Middle Class is disappearing, Gilbert suggests this is not the case. It is not the Middle Class but rather the middle-income group that is shrinking. This is because of both the declining earnings of many Working-Class positions and the growth of family incomes toward the upper end of the distribution. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Working Class The Working Class has traditionally consisted of semiskilled blue-collar laborers. Well-paying jobs for these workers have been declining. Workers in routine white-collar jobs would be considered members of this class. The political influence of this group has declined significantly as the goods-producing industries of the economy, typically with strong union membership, have contracted. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Working Poor The Working Poor includes most service workers and the lowest-paid operatives and sales and clerical workers. Members of this social class tend to have less stable job histories, sometimes for reasons beyond their control. They are alienated from political life leading to only marginal involvement in the political process. The lower boundary of this class, defined by commitment to employment, is blurred by the tendency of some individuals to move back and forth across it. This can be termed “oscillating mobility.” © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

The Underclass The Underclass includes low-income households whose members have limited participation in the labor force. Limited and erratic work histories, lack of skills, and incomplete education makes finding full-time employment difficult for members of this class. A large segment of the Underclass consists of single mothers. A significant portion of the Underclass depends on government transfer programs including public assistance, Social Security, Supplemental Security Income (SSI), and veterans benefits. Long-term effects of the 1996 welfare reform legislation on this social class are still difficult to determine. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Growing Inequality Occupational Structure The transition from an industrial to a postindustrial society occurred around 1970. Earnings Since the early 1970’s, wages have more or less stagnated, and the distribution of wages has become increasingly unequal. Wealth Wealth has become increasingly concentrated at the top of the class hierarchy. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Growing Inequality, cont.
Poverty There has been no appreciable reduction in the poverty rate in nearly 40 years. The poor are less likely to be over 65 and more likely to be under 18 than they were in 1960 and are much more likely to live in female-headed families. Income Those at the middle and bottom of the class structure have seen their incomes grow at a much slower rate than during the Age of Shared Prosperity. Those at the top have seen their incomes soar. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Growing Inequality, cont.
Social life Residential neighborhoods are increasingly segregated by class, which has resulted in decreased levels of interclass association. Social Mobility Although intergenerational upward social mobility is still pretty common, it has slowed in the Age of Growing Inequality. Political Power Power has shifted away from the Working Class and Working Poor and toward the privileged class—in particular, the Capitalist Class. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Why the Age of Growing Inequality? cont.
Changes in the economy have been amplified by the decisions of corporations, families, and government. The transition from an industrial to a postindustrial society coincided with the beginning of the Age of Growing Inequality. Wage disparities have widened. Disparities are wider in the postindustrial present than in the industrial past. Advanced education and skills make winners out of those with them. Institutional mechanisms that once constrained the wage differentials have weakened. More competitive domestic and global markets have caused corporations to look for ways to cut labor costs such as downsizing and outsourcing. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Why the Age of Growing Inequality? cont.
Changes in family life have had an impact. Americans are less likely to marry, more likely to divorce, more likely to have children out of wedlock, and, as a result, much more likely to live in female-headed families. More women are employed and their earning have enabled families to overcome the erosion of men’s wages, but the net result of women’s increased employment is greater inequality among families. Public policy in the Age of Growing Inequality has become more responsive to the privileged classes and less sympathetic to other classes. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

Hard Times in the Age of Growing Inequality
In December 2009, nearly one in five workers was unemployed or underemployed. The burden of this has not been evenly distributed among the different social classes. The Working Class and the Working Poor have borne the brunt. The recession has worsened trends we have seen in the Age of Growing Inequality including poverty, wage polarization, income inequality, and a shrinking manufacturing base. The end of the Age of Growing Inequality is nowhere in sight. © Pine Forge Press, an Imprint of SAGE Publications, Inc., 2011

By: Dennis Gilbert Hamilton College

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