Week 5 - Chapter 8: Stratification, Class, and Inequality PDF

Stratification, Class, 8 and Inequality Americans, especially those with limited means, are increasingly forced to take out loans to pay their bills. Which of the following forms of borrowing is currently the largest in the United States, when all the money owed is added up? a Credit card debt b Student loan debt c Car and automobile debt Turn the page for the correct answer. 215 A mericans seldom pay cash. “Charge now, pay later” enables many people to ac- quire the latest smartphone, own a car, or go to school. Unfortunately, loans that provide money for today must be paid off tomorrow. And people with lower incomes, who have less cash to spend, are increasingly forced to go into debt to pay for many necessities. A college education is one such necessity, and student loan debt is now greater than all other forms of household debt, except for home mortgages. The correct answer to the opening question is b: student loan debt. By the end of 2016, outstanding student loans had reached $1.3 trillion, in comparison with credit card debt ($779 billion) and automobile loans ($1.16 trillion) (El Issa, 2016). Graduates of the class of 2016 had an average of around $37,000 in student loan debt. If you have a student loan, you are in good company: Nearly seven in ten graduating seniors have had to borrow to pay for the rising cost of higher education (The Institute for College Access and Success, 2016). Moreover, among those households with student loan debt, the least well-off owe the largest share of their household income. In 2010, for the poorest ﬁfth of households, outstanding student debt was 24 percent of annual income; for the richest ﬁfth, it was 7 percent (Fry, 2012). Those least able to afford a college education wind up with the most severe debt burden. In this chapter, we will examine why this is the case: how differences in income and wealth affect one’s life chances, from getting an affordable college education to enjoying a middle-class lifestyle. Along the way, we will examine what sociologists have to say about social stratiﬁcation—why social classes emerge, the reasons for social inequality, the degree to which a college education “pays off” in the sense of assuring a lifetime of earnings that will more than compensate for the cost of the education itself. LEA R NING OBJECTIV ES 1 BASIC CONCEPTS Learn about social stratification and the importance of social background in an individual’s chances for material success. 2 THEORIES OF STRATIFICATION IN MODERN SOCIETIES Know the most influential theories of stratification, including those of Karl Marx, Max Weber, and Erik Olin Wright. 3 RESEARCH ON SOCIAL STRATIFICATION TODAY Know the class differences in U.S. society, what influences them, and how they are defined and determined. Recognize the ways in which the gap between rich and poor has grown larger. Learn the processes by which people become marginalized in a society and the forms this marginalization takes. 4 UNANSWERED QUESTIONS Learn about competing explanations for why poverty exists and the means for combating it. Understand your own chances for social mobility. Learn how changes in the U.S. economy since the 1970s have led to growing inequalities. 216 CHAPTER 8Stratification, Class, and Inequality The differences explained here are directly related to the existence of inequalities within social stratiﬁcation Ċ The existence of American society that result from class dis- structured inequalities between groups in society in terms of their access to material or symbolic parities. In this chapter, we will introduce a key rewards. While all societies involve some forms concept of sociology: social stratiﬁcation. of stratification, only with the development of By this we mean inequalities among individu- state-based systems did wide differences in wealth and power arise. The most distinctive als and groups that are determined not so much form of stratification in modern societies is class by individual personality or small-scale social divisions. situations but, more broadly, by attributes intersectionality Ċ A sociological perspective such as gender, age, race, ethnicity, or religious that holds that our multiple group memberships affect our lives in ways that are distinct from affiliation. The study of the interacting effects single group memberships. For example, the of these different sources of inequality, and the experience of a black female may be distinct from resulting experiences of oppression, is termed that of a white female or a black male. intersectionality. structured inequalities Ċ Social inequalities In this chapter, we will focus on stratiﬁcation that result from patterns in the social structure. with regard to societal inequalities based on slavery Ċ A form of social stratification in which some people are owned by others as their social class—aspects of wealth, income, educa- property. tion, and lifestyle—although we will touch on caste Ċ A social system in which one’s social gender, racial, and ethnic differences as well. In status is held for life. later chapters, we will consider more directly how gender (Chapter 10), race and ethnicity (Chapter 11), and age (Chapter 12) contribute to stratiﬁcation. Individuals and groups enjoy unequal access to rewards depending on their posi- tion within the larger stratification scheme. Stratification can thus be defined as structured inequalities —such as classes, races, and genders—between and among different groups of people. Sociologists see these inequalities as built into the eco- nomic and political system, rather than as resulting from individual differences or chance occurrences, such as being the most handsome or beautiful person in a class. We can think of stratification like the geological layering of rock in the earth’s surface. Societies consist of strata in a hierarchy, with the more favored at the top and the less privileged nearer the bottom. THE ANSWER IS B. 1 BASIC CONCEPTS Systems of Stratification Historically, a few basic systems of stratiﬁcation have existed in human societies: slavery, caste, and class. Slavery is an extreme form of inequality in which some individuals are literally owned by others as property. As a formal institution, slavery is illegal in every country and has almost completely disappeared. Caste is associated with the cultures of the Indian subcontinent and the Hindu belief in rebirth. In caste systems, one’s social status is given for life. This means that all individuals must remain at the social level of their birth throughout their life. It is believed that individuals who fail to abide by the rituals and duties of their caste will Basic Concepts217 be reborn in an inferior position in their next life. Caste systems structure the type of contact that can occur between members of different ranks. Class systems differ in many respects from slavery and castes. We can define a class as a large- scale grouping of people who share common economic resources that strongly influence the type of lifestyle they are able to lead. The concept of life chances, introduced by Max Weber, is the best way to understand what class means. Your life chances are the opportunities you have for achieving economic prosperity. The idea of life chances is important because it emphasizes that although class is a powerful influence on what happens in our lives, it is not completely determining. Class divi- sions affect which neighborhods we live in, what lifestyles we follow, and even which romantic partners we choose (Mare 1991; Massey 1996). But they don’t fix people for life in specific social positions, as the older systems of stratification did. Class systems differ from slavery and castes in four main ways: Class systems are fluid, and move- ment is possible; positions are partly achieved; classes are economically based; and class systems are large- scale and impersonal. The chief bases of class are income, ownership of wealth, education, occupation, and lifestyle. Let’s begin our exploration of classes in modern societies by looking at basic divi- sions of income, wealth, educational attainment, and occupational status within the population as a whole. INCOME Income, which refers to wages and salaries earned from paid occupations plus money received from investments, serves as an important determinant of one’s social posi- tion. One of the most signiﬁcant changes over the past century has been the rising real income of the majority of the working population. (“Real income” is income excluding increases due to inﬂation, which provides a ﬁxed standard of comparison from year to year.) Blue-collar workers, who typically perform physical labor such as manufacturing or construction work, now earn three to four times as much in real income in Western societies as their counterparts earned in the early 1900s, although they have seen their real income drop in the ﬁrst two decades of the twenty-ﬁrst century. Gains for manage- rial and professional workers, often known as “ white-collar workers,” have been higher still. In terms of earnings per person (per capita) and the range of goods and services their earnings can purchase, many Americans today are more affluent than any peoples have class systems Ċ A system of social hierarchy previously been in human history. One of the that allows individuals to move among classes. The four chief bases of class are ownership of most important reasons for this is “increas- wealth, occupation, income, and education. ing productivity”—output per worker—through class Ċ Although it is one of the most technological development in industry. Another frequently used concepts in sociology, there is reason is almost everything we consume is now no clear agreement about how the notion should be defined. Most sociologists use the term to made in countries where wages are extremely refer to socioeconomic variations among groups low, keeping costs (and therefore prices) down. of individuals that create variations in their While this situation has been good for American material prosperity and power. consumers, it has not been so good for American life chances Ċ A term introduced by Max workers, as we shall see later in this chapter, as Weber to signify a person’s opportunities for achieving economic prosperity. well as in Chapters 9 and 14. income Ċ Money received from paid wages and Even though real income has risen in the past salaries or earned from investments. century, these earnings have not been distrib- uted evenly across groups. In other words, not 218 CHAPTER 8Stratification, Class, and Inequality Figure 8.1 Mean Household Income by Income Group, 1967–2015 $400,000 $350,000 Mean household income (in 2015 dollars) Top 5% $300,000 $250,000 $200,000 Top 20% $150,000 $100,000 Second-highest 20% $50,000 Middle 20% Second-lowest 20% Bottom 20% $0 1967 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Source: U.S. Bureau of the Census, 2016d. everyone has shared equally in the growing productivity of the U.S. economy. Between 1993 and 2015, the average income of the bottom 99 percent of American households only grew by about 14 percent. In contrast, the income of the top 1 percent of households jumped nearly 95 percent (Saez, 2016). In 2015, the mean household income of the top 5 percent was around $350,000, compared to just $12,450 for the bottom 20 percent of American households (Figure 8.1). Since the 1970s, income inequality has been increasing dramatically; it is currently greater than at any time since 1928, the year before the Great Depression. In 1928, the richest 1 percent of families received nearly a quarter of all U.S. pretax income, while the bottom 90 percent (that is, everyone except the richest 10 percent) received about half. The Depression, which wiped out much of the wealth in the country and left mil- lions unemployed, led to government policies aimed in part at protecting working- and middle- class Americans. President Franklin Delano Roosevelt’s “New Deal,” which created Social Security, welfare, housing, and many public works, resulted in the redistribution of income from the wealthiest Americans to middle- and working-class Americans. By 1944, the richest 1 percent of Americans were down to about a tenth of all U.S. pretax income, while the bottom 90 percent were up to two-thirds, an income distribution that remained until the end of the 1970s. Today, the richest 1 percent are back up to nearly a quarter, while the lowest 90 per- cent are below half—for the first time since the U.S. government has kept records of income distribution. And inequality appears to be worsening. Between 2009 and 2015, Basic Concepts219 the average income of American families rose by 13 percent; however, this growth was not shared evenly. The average income of the top 1 percent of all American families grew by 37 percent, while the average income of the bottom 99 percent rose by less than 8 percent. This means that the top 1 percent captured more than 50 percent of all gains in income over the period (Saez, 2016). WEALTH Wealth is usually measured in terms of net worth: all the assets one owns (for example, cash; savings and checking accounts; investments in stocks, bonds, and real estate properties) minus one’s debts (for example, home mortgages, credit card balances, loans that need to be repaid). Bill Gates, the richest person in the world in 2016, had an esti- mated net worth in that year of $75 billion, derived largely from the value of Microsoft stock that he owns. It is extremely difficult to get a truly accurate measure of wealth in the United States because the wealthiest Americans have ways of effectively hiding their wealth through trusts and foundations, as well as offshore tax havens and other tax shelters (Saez and Zucman, 2016). Nonetheless, some highly detailed (and mathematically sophisticated) efforts have recently been made to get a better picture of trends in wealth concentration (Piketty and Goldhammer, 2014; Piketty and Zucman, 2014; Saez and Zucman, 2016; Alvaredo, Atkinson, Piketty, and Saez, 2013). This research ﬁnds that trends in wealth inequality parallel those with income inequality: The rich are getting much, much wealthier relative to everyone else, mainly driven by soaring top incomes. In the 1920s, before the Great Depression, the bottom 90 percent of Americans accounted for one-ﬁfth of total wealth in the United States. In the mid-1980s, their share had risen to more than a third; but today, it has dropped to under a quarter. The vast majority of Americans are saddled with unpaid credit cards, and, as we learned in the chapter opener, many owe money for student loans, automobiles, and home mortgages. The type of wealth one has also differs between the very rich and everybody else. Although most people make money from work, the wealthy often derive the bulk of their money from their investments, some of which may be inherited. Some scholars argue that wealth, not income, is the real indicator of social class because it is less sen- sitive to fluctuations due to shifting work hours, health, and other factors that might affect one’s income in a given year. Much of the wealth of the wealthy is in the form of financial assets such as stocks, bonds, mutual funds, and other forms of investment, whereas for most Americans, one’s home is the principal form of wealth. For households whose net worth is in excess of $500,000, financial assets account for two-thirds of all wealth; only 17 percent comes from their homes. For all other households, their homes account for half of all wealth, with only a third coming from financial assets (Fry and Taylor, 2013). Today, the average net worth of the bottom 90 percent of American families is only $84,000, while the average net worth of the top 1 percent has grown to $13.8 million, and that of the top 0.1 percent, $72.8 million. Stated somewhat differently, the wealthiest 0.1 percent of Americans (160,700 families) have about as much wealth as the bottom 90 percent (144 million families) (Saez and Zucman, 2016). There are signiﬁcant dif- ferences in net worth by race. The median net wealth Ċ Money and material possessions held worth of white households was $144,200 in 2013, by an individual or group. compared to $11,200 for blacks (Pew Research Center, 2016c). 220 CHAPTER 8Stratification, Class, and Inequality What are some of the reasons for the racial disparity in ﬁnancial assets? The old adage “It takes money to make money” is a fact of life for those who start with little or no wealth. Because whites, on average, have enjoyed higher incomes and levels of wealth than blacks, many whites can accrue even more wealth, which they pass on to their children (Conley, 1999). But family advantages are not the only factors. Melvin Oliver and Thomas Shapiro (2006) argue that it is easier for whites to obtain assets, even when they have fewer resources than blacks, because discrimination affects the racial gap in home ownership. Blacks are rejected for mortgages 60 percent more often than whites, even when they have the same qualiﬁcations and creditworthiness. When blacks do receive mortgages, they are more likely to take “subprime” mortgage loans that charge much higher interest rates. In 2006, 30 percent of blacks took out subprime home loans, compared with 24 percent of Hispanics and 18 percent of whites. Blacks and Hispanics were therefore especially hard hit by the recession of 2008; many were forced to default on their mortgage payments and, in many cases, lost their homes. Research shows that only a few lenders offer subprime loans, but those lenders focus on minority communities, whereas the prime lenders are unable or unwilling to lend in those communities (Avery, Canner, and Cook, 2005). According to a New York Times analysis of mortgage lending in New York City, black households making more than $68,000 a year were nearly ﬁve times as likely to hold high-interest subprime mortgages as whites of similar or lower income levels (Powell, 2009). These issues are particularly important because home ownership constitutes American families’ primary means for accumulating wealth. Financial assets are important because they provide a major source of funding if one wants to start a business or pay for a college education. For lower-income Americans (which includes many minorities), accumulating stocks or bonds in the hope of cash- ing them in to pay for their children’s college education is not even a fantasy. In fact, it is more likely that people in this group owe far more than they own. In recent years, as credit has become more readily available, many Americans have gone increasingly into debt, using credit cards and reﬁnancing their home mortgages to pay for their lifestyles rather than relying on their earnings. Total household debt exceeded $12 trillion in 2016, including $8.5 trillion for home mortgages, and, as noted at the beginning of this chap- ter, $779 billion in credit card and $1.2 billion in automobile loans. That means that the average household with debt owes more than $130,000 (El Issa, 2016). Wealth is even more unequal globally. There are reportedly 1,810 billionaires in the world, with a combined net worth of more than $7 trillion (Blankfeld, 2016). According to some estimates, the wealthiest 1 percent now account for more than half of all global wealth (Credit Suisse, 2016b). We’ll come back to this topic in Chapter 9. EDUCATION One thing that pays off in terms of income and wealth is a college education. In fact, education is one of the strongest predictors of occupation, income, and wealth later in life. In 2015, the median income of millennials (25 to 34 years old) with BA degrees and full-time jobs was $50,000, compared to $30,500 for those who only graduated from high school, a gap of 64 percent (National Center for Education Statistics [NCES], 2017). Moreover, the return on a college education has increased considerably over time: In 1966, for example, the income gap between those with a college degree and those with a high school diploma was only 24 percent (Pew Research Center, 2014g). A recent study by the Economic Policy Institute reports that, in 2013, the hourly earnings of college graduates was nearly double that of people without a degree; 30 years ago, it was only Basic Concepts221 two-thirds higher (Leonhardt, 2014). Figure 8.2 In fact, over the long run, if one estimates the lifetime earnings of Median Earnings of Young Adults, 2015* college graduates and subtracts the costs of going to college, on average, $60,000 the beneﬁts outweigh the costs by a $60,000 half million dollars (Autor, 2014). $50,000 $50,000 A college education also pays Median annual earnings off in terms of wealth. According $40,000 to the U.S. Bureau of the Census $34,600 $30,500 (2017m), the median net worth of $30,000 $25,000 households headed by someone with a BA degree was $147,578 in 2013, $20,000 compared to $36,795 for households $10,000 headed by someone with only a high school diploma. For households 0 headed by high school dropouts, the Less than High Some Bachelor’s Master’s school college, degree degree difference is even more pronounced; high school no degree or higher the median net worth is just over Educational attainment $5,000. While a few exceptional indi- viduals may drop out of college and go *Represents median annual earnings of full-time, year- on to become billionaires (Microsoft round workers ages 25–34. cofounder Bill Gates, Apple’s Steve Source: National Center for Education Statistics, 2017. Jobs, and Facebook’s Mark Zucker- berg come to mind), the chances of following in their footsteps is about as likely as becoming a billionaire rock star or professional athlete. Importantly, if you start college, it pays to ﬁnish your degree: The median net worth of households headed by someone who dropped out of college is the same as for those headed by someone with a high school diploma (U.S. Bureau of the Census, 2017m). Of course, it matters which college you go to, what you major in, how much student loan debt you accumulate along the way, and—perhaps above all—the effort you put into your educational experience. While college graduates earn an average of $1 million more than high school graduates over the course of their careers, earnings vary widely by major. A recent study by the Center on Education and Workforce at Georgetown Univer- sity compared 137 college majors and found that petroleum engineering students have the highest average annual salary, $136,000, while early- childhood education majors earn the least, at $39,000 per year (Carnevale, Cheah, and Hanson, 2015). Racial differences in levels of education also persist, which partly explains why racial differences in income and wealth persist as well. In 2013–2014, the highest high school graduation rates were among Asian Americans (89 percent), followed by whites (87 percent), Hispanics (76 percent), and American Indians and blacks (73 percent each) (NCES, 2016d). Importantly, as we will see later in this chapter, how much education one receives is often influenced by the social class of one’s parents. OCCUPATION In the United States and other industrialized societies, occupation is an important indi- cator of social standing. According to studies in which people rate jobs in terms of how 222 CHAPTER 8Stratification, Class, and Inequality “prestigious” they are, those requiring Table 8.1 the most education are often—but not Relative Social Prestige of always—ranked most highly (Table 8.1). Select U.S. Occupations The top-ranked occupations appear to share one of two characteristics: They OCCUPATION PRESTIGE require a fair amount of either education SCORE or public service. These rankings have been fairly consistent for nearly four Physician 7.6 decades (Griswold, 2014). There are Architect 6.7 some interesting differences by age, Dentist 6.7 however. Millennials seem more Airline pilot 6.6 inclined than older Americans to value Registered nurse 6.5 fame: Professional athletes, actors, and Lawyer 6.4 entertainers move up in the rankings Veterinarian 6.4 (Harris, 2014). Computer programmer 6.0 LIFESTYLE Secondary-school teacher 6.1 Sociologist 6.1 In analyzing class location, sociolo- Police officer 5.9 gists have traditionally relied on mea- Member of the clergy 5.8 sures that are primarily economic, such as income or wealth. Some recent Actor 5.7 authors, however, seek to include cul- Firefighter 5.7 tural factors such as lifestyle and con- Musician in a symphony 5.6 sumption patterns. According to this orchestra perspective, symbols and markers Electrician 5.2 related to consumption are playing an Farm manager 5.0 ever-greater role in daily life. Individual Real estate agent 4.9 identities are structured more around Carpenter 4.6 lifestyle choices—such as how to dress, Auto body repairperson 4.3 what to eat, how to care for one’s body, Bank teller 4.2 and where to relax—and less around Local delivery truck driver 4.2 traditional class indicators such as Salesperson in a store 3.9 employment. Hair stylist 3.8 The French sociologist Pierre Day-care aide 3.6 Bourdieu saw social-class groups as Waiter/waitress 3.6 identiﬁable according to their levels of Bartender 3.6 “cultural and economic capital” (Bour- dieu, 1984). Increasingly, individuals File clerk 3.5 distinguish themselves not according Cashier in a supermarket 3.4 to economic or occupational factors Taxi driver 3.2 but on the basis of cultural tastes and Janitor 3.0 leisure pursuits. Consider the growth Door-to- door salesperson 2.9 in occupations related to convinc- ing consumers that true happiness Note: Respondents were asked to rank the requires looking a certain way, buying a occupations’ prestige on a scale of 1 to 9, with 1 as the least prestigious and 9 as the most speciﬁc product, or being loyal to a par- prestigious. ticular brand. Advertisers, marketers, Source: Smith and Son, 2014. fashion designers, style consultants, interior designers, personal trainers, Basic Concepts223 and webpage designers, to name but a few, are means of production Ċ The means whereby all involved in inﬂuencing cultural tastes and the production of material goods is carried on in a society, including not just technology but also promoting lifestyle choices. the social relations between producers. It would be difficult to dispute that strati- bourgeoisie Ċ People who own companies, ﬁcation within classes, as well as among land, or stocks (shares) and use these to classes, now depends not only on occupational generate economic returns. differences but also on differences in con- proletariat Ċ People who sell their labor for sumption and lifestyle. The rapid expansion wages, according to Marx. of the service economy and the entertainment and leisure industry, for example, reﬂects an increasing emphasis on consumption within industrialized countries. Modern societ- ies have become consumer societies, and, in some respects, a consumer society is a “mass society” where class differences are overridden; thus, people from different class backgrounds may all watch similar television programs or shop for clothing in the same stores. Yet class differences can also become intensiﬁed through variations in lifestyle and “taste” (Bourdieu, 1984). Despite the importance of cultural capital in signifying class, we must not ignore the critical role of economic factors in the reproduction of social inequalities. For the most part, individuals experienc- CONCEPT CHECKS 3 ing extreme social and material depriva- tions are not doing so as part of a lifestyle choice. Rather, their circumstances are 1. How is the concept of class different from that of caste? constrained by factors relating to the eco- 2. What are the principal determinants of social nomic and occupational structure (Rank, stratification? Yoon, and Hirschl, 2003). Some Ameri- 3. What is the difference between wealth and income, and why does it matter for social cans may not necessarily “choose” to buy stratification? clothes at Walmart and eat at McDonald’s; 4. What are two examples of noneconomic indi- they may simply be unable to afford to shop cators of one’s social class? at higher-end stores and dine at gourmet restaurants. 2 THEORIES OF STRATIFICATION IN MODERN SOCIETIES In this section, we look at some broad theories regarding stratification. Karl Marx and Max Weber developed the most influential approaches. Most contemporary theories of stratification are heavily indebted to their ideas. Marx: Means of Production and the Analysis of Class For Marx, the term class refers to people who have a common relationship to the means of production—the means by which they gain a livelihood. In modern societ- ies, the two main classes are the bourgeoisie and proleteriat. The bourgeoisie, or cap- italists, own the means of production. Members of the proletariat , or proletarians, by contrast, earn their living by selling their labor to the capitalists. The relationship between classes, according to Marx, is exploitative. During the working day, workers 224 CHAPTER 8Stratification, Class, and Inequality produce more than employers actually need to repay the cost of hiring them. This surplus surplus value Ċ In Marxist theory, the value of a worker’s labor power left over when an employer value is the source of profit, which capitalists has repaid the cost of hiring the worker. put to their own use. communism Ċ A social system based on Marx (1977; orig. 1867) believed that the everyone owning the means of production and maturing of industrial capitalism would cre- sharing in the wealth it produces. ate an increasing gap between the wealth of status Ċ The social honor or prestige a the minority and the poverty of the mass of the particular group is accorded by other members of a society. Status groups normally display population. In his view, the wages of the work- distinct styles of life — patterns of behavior that ing class could never rise far above subsistence the members of a group follow. Status privilege level, while wealth would pile up in the hands may be positive or negative. of those owning capital. In addition, laborers pariah groups Ċ Groups who suffer from negative status discrimination — they are looked would daily face work that is physically tasking down on by most other members of society. and mentally tedious, as in many factories. At the lowest levels of society, particularly among those frequently or permanently unemployed, there would develop an “accumulation of misery, agony of labor, slavery, ignorance, brutality, moral degradation.” Because of this accumulation, Marx concluded, the working class would eventually rise up and overthrow the capitalist system that was oppressing them. This revolution would then usher in a classless society in which technology replaced much of human labor, with everyone working together for the common good. He termed this system communism , common ownership of the means of production. Marx was right about the persistence of poverty in industrialized countries and in anticipating continued inequalities of wealth and income. He was wrong in supposing that the income of most of the population would remain extremely low. Most people in Western countries today are much better off materially than were comparable groups in Marx’s day. Marx was also wrong in believing that a classless society—a communist utopia in which everyone shared equally in the fruits of their common labor—would inevitably result. Weber: Class and Status There are three main differences between Weber’s theory and that of Marx. First, according to Weber, class divisions derive not only from control or lack of control of the means of production but also from economic differences that have nothing to do with property. Such resources include people’s skills and credentials. Those in managerial or professional occupations earn more and enjoy more favorable conditions at work, for example, than people in blue- collar jobs. Their qualiﬁcations—such as degrees, diplo- mas, and skills they have acquired—make them more “marketable” than others without such qualiﬁcations. At a lower level, among blue- collar workers, skilled craft workers secure higher wages than the semiskilled or unskilled. Second, Weber distinguished another aspect of stratiﬁcation, which he called “status.” Status refers to differences among groups in the social honor, or prestige, that others accord them. Status distinctions can vary independently of class divisions. Social honor may be either positive or negative. For instance, doctors and lawyers have high prestige in American society. Pariah groups, on the other hand, are negatively privileged status groups subject to discrimination that prevents them from taking advantage of opportu- nities open to others. The Jews were a pariah group in medieval Europe, banned from participating in certain occupations and from holding official positions. Theories of Stratification in Modern Societies 225 Possession of wealth normally confers high status, but there are exceptions, such as Hollywood starlets who earn high salaries but lack the education or reﬁnement typically associated with “status.” In Britain, individuals from aristocratic families enjoy social esteem even after their fortunes have been lost, but individuals with “new money” are often scorned by the well-established wealthy. Whereas class is an objective measure, status depends on people’s subjective evaluations of social differences. Classes derive from the economic factors associated with property and earnings; status is governed by the varying lifestyles that groups follow. Third, Weber recognized that social classes also differ with respect to their power, or ability to enact change, command resources, or make decisions. Power is distinct from status and class, but these three dimensions often overlap. For example, on most college campuses, the president or provost has much greater power to change campus policies than would a cafeteria worker. Weber’s writings on stratiﬁcation show that other dimensions besides class strongly inﬂuence people’s lives. Most sociologists hold that Weber’s scheme offers a more ﬂexible and sophisticated basis for analyzing stratiﬁcation than that provided by Marx. Davis and Moore: The Functions of Stratification Kingsley Davis and Wilbert E. Moore (1945) provided a functionalist explanation of stratification, arguing that it has beneficial consequences for society. They claimed that certain positions in society, such as brain surgeons, are functionally more impor- tant than others, and these positions require special skills. However, only a few individ- uals have the talents or experience appropriate to these positions. To attract the most qualified people, rewards need to be offered, such as money, power, and prestige. Davis and Moore determined that because the benefits of different positions in any society must be unequal, all societies must be stratified. They concluded that social stratifica- tion and social inequality are functional because they ensure that the most qualified people, attracted by the rewards society bestows, fill the roles that are most important to a smoothly functioning society. Davis and Moore’s theory suggests that a person’s social position is based solely on innate talents and efforts. It is not surprising that other sociologists have criticized their theory. For example, Melvin Tumin (1953) argued that the functional importance of a particular role is difficult to measure and that the social rewards bestowed on those in “important” roles do not reﬂect these people’s actual importance. For instance, who is more important, a lawyer or a schoolteacher? If, on average, a lawyer earns four or ﬁve times the amount a schoolteacher earns, does that earning potential accurately reﬂect his or her relative importance to society? Tumin also argued that Davis and Moore overlooked the ways in which stratiﬁca- tion limits the discovery of talent in a society. As we have seen, the United States is not entirely a meritocratic society. Those at the top have special access to economic and cul- tural resources, such as the highest-quality education, that help transmit their privileged status from one generation to the next. For those who lack access to these resources, even those with superior talents, social inequality is a barrier to reaching their full potential. Erik Olin Wright: Contradictory Class Locations The American sociologist Erik Olin Wright (1978, 1985, 1997) developed a theoretical position that owes much to Marx but also incorporates ideas from Weber. According to Wright, there are three dimensions of control over economic resources in modern 226 CHAPTER 8Stratification, Class, and Inequality capitalist production, and these allow us to identify the major classes: contradictory class locations Ċ Positions in the class structure, particularly routine white- collar and lower managerial jobs, that share 1. Control over investments or money capital characteristics with the class positions both above and below them. 2. Control over the physical means of produc- tion (land or factories and offices) 3. Control over labor power Members of the capitalist class have control over each of these dimensions of the production system. Members of the working class have control over none of them. Between these two main classes, however, are the groups whose position is more ambiguous: managers and white- collar workers. These people are in what Wright calls contradictory class locations, because they can influence some aspects of produc- tion but lack control over others. White- collar and professional employees, for example, must contract their labor power to employers to make a living, in the same way manual workers do. Yet they have a greater degree of control over the work setting than do most people in blue- collar jobs. Wright terms the class position of such workers “contradic- tory” because they are neither capitalists nor manual workers, yet they share certain common features with each. A large segment of the population—85 to 90 percent, according to Wright (1997)— falls into the category of those who must sell their labor because they do not control the means of production. Yet within this population is a great deal of diversity, ranging from the traditional manual working class to white- collar workers. To differentiate class locations within this large population, Wright considers two factors: the relationship to authority and the possession of skills or expertise. First, many middle- class workers, such as managers and supervisors, enjoy relationships to authority that are more privi- leged than those of the working class. Such individuals assist capitalists in controlling the working class—for example, by monitoring the work of other employees or by con- ducting personnel reviews and evaluations—and are rewarded by earning higher wages and receiving regular promotions. Yet these individuals remain under the control of the capitalist owners. In other words, they are both exploiters and the exploited. The second factor that differentiates class locations within the middle classes is the possession of skills and exper- tise. According to Wright, middle-class CONCEPT CHECKS 3 1. According to Karl Marx, what are the two employees possessing skills that are in main classes, and how do they relate to one demand in the labor market have a speciﬁc another? form of power in the capitalist system: 2. What are the two main differences between They can earn a higher wage. The lucrative Max Weber’s and Karl Marx’s theories of social stratification? positions available to information tech- 3. According to Kingsley Davis and Wil- nology (IT) specialists in the knowledge bert E. Moore, how does social stratification economy illustrate this point. Moreover, contribute to the functioning of society? Wright argues, because employees with What is wrong with this argument, according to Melvin Tumin? knowledge and skills are more difficult 4. What does Erik Olin Wright mean by “contra- to monitor and control, employers secure dictory class location”? Give an example of a their loyalty and cooperation by rewarding type of worker who falls in this category. them accordingly. Theories of Stratification in Modern Societies 227 3 RESEARCH ON SOCIAL STRATIFICATION TODAY A Contemporary Portrait of the U.S. Class Structure As we have already learned, a person’s social- class position has a significant impact on lifestyle. Most sociologists identify social cla sses in terms of wealth, income, and occupation, noting how social class influences consumption, education, health, and access to political power. The purpose of the following discussion is to describe broad class differences in the United States. Bear in mind that there are no sharply defined boundaries among the classes, and no real agreement among sociologists about where the boundaries should fall. THE UPPER CLASS The upper class consists of the very wealthiest Americans—those households earn- ing more than $200,000, or approximately 5 percent of all American households (U.S. Bureau of the Census, 2014m). Most Americans in the upper class are wealthy but not superrich. They are likely to own a large suburban home and perhaps a vacation home as well, drive expensive automobiles, vacation abroad, and educate their children in private schools and colleges. At the lower levels of this group, a large part of income may come from salaried earnings. This group would include many professionals, from some doctors and lawyers to university administrators and possibly even a few highly compensated professors. At the very top of the upper class are the superrich—people who have accumulated vast fortunes that permit them to enjoy a lifestyle unimaginable to most Americans. If one uses a cutoff of the richest 0.1 percent in terms of income, these are people whose income tops $2 million, roughly 315,000 to 325,000 Americans (Pomerleau, 2013; Lenzer, 2011). Their wealth stems in large part from their substantial investments, from stocks and bonds to real estate, and from the interest income derived from those investments. They include people who acquired their wealth in a variety of ways: celebrities, profes- sional athletes, the heads of major corporations, people who have made large amounts of money through investments or real estate, and those fortunate enough to have inherited great wealth from their parents. The superrich are conscious of their unique and privileged social- class position; some give generously to such worthy causes as the fine arts, hospitals, and charities. Their homes are often lavish and sometimes filled with collections of fine art. Their common class identity is strengthened by such things as being listed in the social register or having attended the same exclusive private secondary schools (to which they also send their children). They sit on the same corporate boards of directors and belong to the same private clubs. They contribute large sums of money to their favorite politicians and are likely to be on a first-name basis with members of Congress and perhaps even with the president. Because they are able to give large donations to political upper class Ċ A social class broadly composed campaigns, they often have a significant influ- of the more affluent members of society, ence on American politics (Domhoff, 2013). especially those who have inherited wealth, own businesses, or hold large numbers of stocks The turn of the twenty-ﬁrst century saw (shares). extraordinary opportunities for the accumula- tion of such wealth. Globalization is one reason. 228 CHAPTER 8Stratification, Class, and Inequality Entrepreneurs who are able to invest globally often prosper, by selling products to foreign consumers and making profits cheaply by using low-wage labor in developing countries. The information revolution is another reason for the accumulation of wealth. Young entrepreneurs with start-up, high-tech companies, such as Facebook founder Mark Zuckerberg and Yahoo! cofounder Jerry Yang, made legendary fortunes. In 2016, Zuckerberg was the sixth wealthiest person in the world, with an estimated net worth of $44.6 billion (Blankfeld, 2016). As a consequence of globalization and the information revolution, the number of superrich Americans has exploded in recent years. At the end of World War II, only 13,000 people were worth $1 million or more in the United States. Today, the 400 richest Americans are worth $2.4 trillion; the cutoff to join this exclusive “club” is a net worth of $1.7 billion (Peterson-Withorn, 2016). Unlike “old money” families such as the Rockefell- ers or the Vanderbilts, who accumulated their wealth in earlier generations and thus are viewed as a sort of American aristocracy, much of this “new wealth” is held primarily by entrepreneurs—including such recent arrivals as WhatsApp cofounder Jan Koum ($8.8 billion) and cofounder and CEO of SnapChat, Evan Spiegel ($2.1 billion). While Americans have long glamorized and aspired to be part of this extraordinarily wealthy elite, perceptions of the superrich have changed in recent years. The recession that began with the financial collapse of 2007–2008, and growing income inequality, has triggered movements such as Occupy Wall Street, during which protesters sought to bring attention to what they saw as greed, corruption, and undeserved political power among the very wealthy. A recent Pew Research Center poll found that nearly two-thirds said the rich-poor gap had increased over the past 10 years, and 6 out of 10 believe that the economic system is unfair, favoring the wealthy rather than everyone else. Slightly more than half (54 percent) would tax the rich and corporations to provide programs for the poor, although strong differences by political party exist on this issue. Such a redistribution of wealth is favored by 75 percent of Democrats and 51 percent of independents, but only 29 percent of Republicans (Pew Research Center, 2014e). THE MIDDLE CLASS Middle class is a catchall term for a diverse group of occupations, lifestyles, and people who earn stable and sometimes substantial incomes at primarily white- collar and highly skilled blue- collar jobs. It is generally considered to include households with income between $40,000 and $200,000, which includes roughly 55 percent of all households. While the middle class was once largely white, today it is increasingly diverse—both racially and culturally, including African Americans, Asian Americans, and Latinos. The middle class grew throughout much of the first three- quarters of the twentieth century, but has been shrinking for most of the past four decades. For many years, when Americans were asked to identify their social class, the major- ity claimed to be middle class (Boushey and Hersh, 2012). The reason was partly the pervasive cultural belief that the United States is relatively free of class distinctions; few people want to be identiﬁed as being too rich or too poor. Most Americans seem to think that others are not very different from their immediate family, friends, or coworkers. Since people seldom interact with those outside their social class, they tend to see themselves as like “most other people,” whom they then regard as being “middle class” middle class Ċ A social class composed (Kelley and Evans, 1995). broadly of those working in white- collar and The perception that “we are all middle lower managerial occupations. class” has changed in recent years, however. Research on Social Stratification Today229 According to public opinion polls, in 2015, 47 percent of Americans identiﬁed as middle class, down from 53 percent in 2008 (Pew Research Center, 2015c). The 2008 recession was partly to blame, as well as the uneven economic recovery that followed. The stock market might have risen to record levels by 2014, but this increase did not beneﬁt the majority of Americans. Eighty-ﬁve percent of self- described middle- class respondents to a 2012 survey said it had become more difficult over the past 10 years to maintain their standard of living between 2001 and 2010, reporting declines in both income and net worth (Pew Research Center, 2012f). The American middle class can be subdivided into two groups: the upper middle class and the lower middle class. The Upper Middle Class The upper middle class consists of highly educated pro- fessionals (for example, doctors, lawyers, engineers, and professors), mid-level corpo- rate managers, people who own or manage small businesses and retail shops, and some large farm owners. Household incomes range quite widely, from about $100,000 to per- haps $200,000. The lower half of the income category would include college professors, for example, while the higher end would include corporate managers and small busi- ness owners. The upper middle class includes approximately 20 percent of all American households (Elwell, 2014a). Its members are likely to be college educated (as are their children), with advanced degrees. They own comfortable homes, drive expensive late- model cars, have some savings and investments, and are often active in local politics and civic organizations. However, they tend not to enjoy the same high- end luxuries, social connections, or extravagances as members of the upper class. Historically, their jobs have been secure and provide retirement, pension, and health beneﬁts, yet many upper-middle- class persons—especially those working in ﬁnance and media—have been susceptible to layoffs and have seen their pension and home-value wealth shrink (U.S. Department of Commerce, 2010). The Lower Middle Class The lower middle class consists of trained office work- ers (for example, secretaries and bookkeepers), elementary and high school teach- ers, nurses, salespeople, police officers, firefighters, and others who provide skilled services. This group, which includes about 40 percent of American households, is the most varied of the social- class strata and may include college- educated persons with relatively modest earnings, such as public elementary school teachers, and quite highly paid persons with high school diplomas only, such as skilled craftspeople (e.g., plumbers) and civil servants with many years of seniority. Household incomes in this group range from about $40,000 to $100,000 (Elwell, 2014a). The number of Ameri- cans who identify as “lower class” or “lower middle class” has increased in recent years. In 2008, roughly a quarter of all adults put themselves in this category; in 2012, fully a third so identified. The numbers have increased even more among millennials (from 25 percent to 39 percent) as young people become increasingly worried about their career prospects (Morin and Motel, 2012). Members of the lower middle class may own a modest house, although many live in rental units. Their automobiles may be late models, but not the more expensive ones. Almost all have a high school education, and some have college degrees. They want their children to attend college, although this goal usually requires work-study programs and student loans. They are rarely politically active beyond exercising their right to vote. Like upper-middle- class persons, lower-middle- class workers have seen their 230 CHAPTER 8Stratification, Class, and Inequality job security and ﬁnancial security decline as a result of the 2008 recession, and these working class Ċ A social class broadly composed of people working in blue-collar, or threats have disproportionately struck African manual, occupations. Americans and persons who work in the public sector (Pitts, 2011). While ﬁreﬁghters, police officers, and schoolteachers have historically enjoyed job security, this is no longer the case. Between 2009 and 2011, state and local govern- ments throughout the United States laid off 429,000 workers (Pitts, 2011). For example, in June 2012, the New Orleans school system announced the layoffs of 200 teachers (Vanacore, 2012), while the impoverished city of Camden, New Jersey, witnessed the layoffs of nearly 250 firefighters, police officers, and city employees in 2011; public workers in dozens of other American cities have seen their pensions threat- ened (Kaplan and Eligon, 2012). THE WORKING CLASS The working class, which comprises about 20 percent of all American households, includes primarily blue- collar workers such as mechanics and pink- collar labor- ers such as clerical aides. Household incomes range from about $20,000 to $40,000 (Elwell, 2014a), and at least two household members work to make ends meet. Family income is just enough to pay the rent or the mortgage, put food on the table, and perhaps save for a summer vacation. The working class includes factory workers, mechanics, office workers, salesclerks, restaurant and hotel workers, and others who earn a mod- est weekly paycheck at a job that involves little control over the size of their income or working conditions. As you will see later in this chapter, many manufacturing jobs in the United States are threatened by economic globalization, and so members of the working class today are likely to feel insecure about their own and their family’s future. The working class is racially and ethnically diverse. While older members of the working class may own a home bought several years ago, younger members are likely to rent. The home or apartment is likely to be in a lower-income suburb or a city neigh- borhood. The household car, a lower-priced model, is unlikely to be new. Most members of the working class are not likely to be politically active even in their own community, although they may vote in some elections. Children of working- class families often bypass college and instead seek full-time work immediately after graduating high school. However, high school graduates’ employment and earnings prospects are bleak. In 2016, the unemployment rate for people 25 and older with only a high school diploma was 5.2 percent, resulting in median weekly earnings of only $692; for high school dropouts, the situation was even worse, with 7.4 percent unemployed and median weekly earnings of $584 (Bureau of Labor Statistics [BLS], 2017j). Rutgers University researchers studied high school graduates from the classes of 2009 to 2011 who did not go on to college; as of 2011, only 16 percent were working full time, 37 percent were unemployed and looking for work, 17 percent were unemployed and had given up on ﬁnding work, and 13 percent were hoping to up their current work hours from part time to full time (Van Horn et al., 2012). Of those who had found jobs, the median hourly wage was $7.50, just $0.25 above the federal minimum wage. These bleak employment prospects bode poorly for their futures; two-thirds of the high school graduates viewed important life transitions such as starting a family or owning a home as many years off in the future. Research on Social Stratification Today231 THE LOWER CLASS The lower class, roughly 20 percent of American households, includes some full-time, low-wage workers and those who work part-time or not at all; their annual household income is typically lower than $20,000 (Elwell, 2014a). Most lower- class individuals live in cities, although some live in rural areas and earn a little money as farmers or part- time workers. Some manage to ﬁnd employment in semiskilled or unskilled manufac- turing or service jobs, ranging from making clothing in sweatshops to cleaning houses. Their jobs, when they can ﬁnd them, are dead- end jobs, since years of work are unlikely to lead to promotion or substantially higher income. Their work is probably part-time and highly unstable, without beneﬁts such as medical insurance, disability, or Social Security. Even if they are fortunate enough to ﬁnd a full-time job, there are no guaran- tees that it will be around next month or even next week. Many people in the lower class live in poverty. Very few own their own homes. Most of the lower class rent, and some are homeless. If they own a car at all, it is likely to be a used car. A higher percentage of the lower class is nonwhite than is true of other social classes (Lin and Harris, 2010). Members of the lower class do not participate in politics, and they seldom vote. THE “UNDERCLASS” Within the lower class, some sociologists have identiﬁed a group they call the underclass because they are “beneath” the class system in that they lack access to the world of work and mainstream patterns of behavior. Located in the highest- poverty neighborhoods of the inner city, the underclass is sometimes called the “new urban poor.” The underclass includes many African Americans who have been trapped for more than one generation in a cycle of poverty from which there is little possibility of escape (Wacquant, 1993, 1996; Wacquant and Wilson, 1993; Wilson, 1996). These are the poorest of the poor. As we will explore later in this chapter, their numbers have grown rapidly over the past quarter century and today include unskilled and unemployed men, young single mothers and their children on welfare, teenagers from welfare- dependent families, and many of the homeless. They live in poor neighborhoods troubled by drugs, gangs, and high levels of violence. They are the truly disadvantaged, people with extremely difficult lives who have little realistic hope of ever making it out of poverty. In recent years, some sociologists have argued that members of the underclass perpetuate their own inequality because the difficult conditions they face have made them “ ill- suited to the requirements of the formally rational sector of the economy” (Wacquant, 2002). Although these scholars see the sources of such behavior in the social structure, they believe the culture of the underclass has taken on a life of its own, serving as both cause and effect. Such claims have generated considerable contro- lower class Ċ A social class comprised of versy, inspiring a number of studies that have those who work part-time or not at all and challenged this viewpoint. Those who stand whose household income is typically lower than $20,000 a year. on the other side argue that although the urban underclass Ċ A class of individuals situated poor comprise an immobile stratum, they are at the bottom of the class system, normally not simply a “defeated” and disconnected class, composed of people from ethnic minority as theorists of the underclass believe. Thus, backgrounds. studies of fast-food workers and homeless street vendors have argued that the separations 232 CHAPTER 8Stratification, Class, and Inequality between the urban poor and the rest of society are not as great as scholars of the underclass believe (Newman, 2000; Duneier, 1999). Social Mobility: Moving Up and Down the Ladder The United States has long been hailed as the land of opportunity. “ Rags-to-riches” stories abound, offering inspiring accounts of people such as Liz Murray, the homeless daughter of drug-addicted parents who ultimately graduated from Harvard University (Murray, 2010). Movies and novels recount the triumphs of the secretary or mailroom worker who became a corporate vice president. Is it possible for a young person from a poor or working-class background to transcend class roots and become an upper-class professional? If yes, what factors contribute to one’s ascent up the social ladder? Answers to these questions can be found in the study of social mobility, which refers to the upward or downward movement of individuals and groups among different class positions through changes in occupation, wealth, or income. Mobility can occur in one of two forms. Intergenerational mobility refers to social move- ment across generations; we can analyze where children are on the scale compared with their parents or grandparents. Intragenerational mobility, by contrast, refers to how far an individual moves up or down the socioeconomic scale during his or her working life. Another important distinction is between structural mobility and exchange mobility. Most mobility, whether intragenerational or intergenerational, is structural mobility—upward mobility made possible by an expansion of better- paid occupations at the expense of poorly paid ones. Most mobility in the United States since World War II has depended on continually increasing prosperity. In a hypotheti- cal society with complete equality of opportunity—in which each person has the same chance of success as everyone else—there would be a great deal of downward as well as upward mobility. This is exchange mobility—an exchange of positions such that more talented people in each generation move up the economic hierarchy, while the less talented move down. In practice, however, no society approaches full equality of opportunity. In a classic study of intergenerational mobility in the United States, sociologists Peter Blau and Otis Dudley Duncan (1967) found that long-range intergenerational mobility—that is, from working class to upper middle class—was rare. Why? Blau and Duncan concluded that the key factor behind occupational status was educational attain- social mobility Ċ Movement of individuals or ment. A child’s education, however, is inﬂuenced groups between different social positions. by family social status; this, in turn, affects the intergenerational mobility Ċ Movement up or child’s social position later in life. Sociologists down a social stratification hierarchy from one generation to another. William Sewell and Robert Hauser (1980) later conﬁrmed Blau and Duncan’s conclusions. intragenerational mobility Ċ Movement up or down a social stratification hierarchy within the They added to the argument by claiming that course of a personal career. the connection between family background and structural mobility Ċ Mobility resulting educational attainment occurs because parents, from changes in the number and kinds of jobs teachers, and friends inﬂuence the child’s educa- available in a society. tional and career aspirations, and claiming that exchange mobility Ċ The exchange of positions on the socioeconomic scale such these aspirations then become an important that talented people move up the economic inﬂuence on the schooling and careers obtained hierarchy while the less talented move down. throughout the child’s life. Research on Social Stratification Today233 As we learned earlier in this chapter, French cultural capital Ċ Noneconomic or cultural sociologist Pierre Bourdieu (1984, 1988) also resources that parents pass down to their children, such as language or knowledge. These has examined the importance of family resources contribute to the process of social background to social status, but his emphasis reproduction, according to Bourdieu. is on the cultural advantages that parents can provide to their children. Bourdieu argued that among the factors responsible for social status, the most important is the transmission of “cultural capital ,” or the cultural advantages that being from a “good home” con- fers. Wealthier families are able to afford to send their children to better schools, an economic advantage that benefits the children’s social status as adults. Parents from the upper and middle classes are mostly highly educated themselves and tend to be more involved in their children’s education—reading to them, helping with homework, purchasing books and learning materials, and encouraging their progress. Bourdieu noted that working- class parents are concerned about their children’s education, but they lack the economic or cultural capital to make a difference. Although Bourdieu focused on social status in France, the socioeconomic order in the United States is similar. Those who already hold positions of wealth and power can ensure that their children have the best available education, and this education will often lead them into the best jobs. Studies consistently show that the large majority of people who have “made money” did so on the basis of inheriting or being given at least a modest amount initially—which they then used to make more. In U.S. society, it’s better to start at the top than at the bottom. One recent study of more than 40 million children and their parents found that social mobility in the United States has not changed much over the past 50 years. In fact, contrary to popular myth, social mobility has long been low, not high (Chetty et al., 2014). Among children born into the bottom fifth of the U.S. income distribution, only 7.5 percent wound up in the top fifth; two out of five remain poor as adults. By way of comparison, fully one-third of those born into the top fifth remained in the top fifth. While being born at the top is no guarantee one will remain there, the odds are far greater than for someone born at the bottom. The study also found that there are significant differences in upward mobility by geographic area. For example, children from the bottom fifth of families who grow up in the Silicon Valley area near San Jose, California—the home of Stanford Univer- sity, Apple, Google, Facebook, and countless other high-tech firms—have a 13 percent chance of reaching the top fifth; the odds of this happening for a child who grows up in Charlotte, North Carolina, is just 4 percent. Mobility is higher in areas that have less residential segregation and income inequality, better primary schools, higher family stability, and, importantly, greater “social capital” in the form of community involve- ment and personal networks (Chetty et al., 2014; Surowiecki, 2014). Race and education play a major part in determining upward mobility. Sixty-three percent of black children born into the bottom fourth of the U.S. income distribution remained in the bottom fourth, while only 4 percent made it into the top fourth. Among white children, 32 percent of those born into the bottom fourth remained there, while 14 percent made it into the top fourth. In other words, while upward mobility is not high for anyone, it is far lower for blacks than it is for whites. Differences in education account for at least part of the racial differences. Because schools remain highly segregated by race in many parts of the country, poor black children often do not have the same educational opportunities as whites (Hertz, 2006). 234 CHAPTER 8Stratification, Class, and Inequality One’s parents’ income has a strong effect on whether one goes to college. In 2014, 80 percent of young adults from the top 25 percent of American households were enrolled in post secondary education, compared to just 45 percent of those in the bottom 25 percent (Cahalan et al., 2016). One key reason is that children born into lower-income families are more likely to drop out of high school or, if they complete high school, do so without the preparation and grades that would qualify them for college (NCES, 2016b; Cameron and Heckman, 2001). One of the most important avenues to upward intergenerational mobility is there- fore higher education. One study found that at all income levels, a college education paid off. Children who earned a college degree were significantly more likely to earn more than their parents than were children who did not graduate from college. Moreover, the differences were largest for middle- class children, suggesting that the returns on edu- cation were greater for this group than for the very poor or the very wealthy (Haskins, 2009). Fully 60 percent of children from families in the top fifth of income earners graduated from college, whereas in the bottom fifth of earners, just 15 percent attained college degrees (Cahalan et al., 2016). Although a college degree may open the door to well-paying managerial and professional occupations, the returns on education, such as the economic payoff received in the workplace for each additional year of schooling or academic degree, is not equal for all Americans. As we will learn in subsequent chap- ters, each additional academic degree brings much richer financial and occupational rewards for men versus women and whites versus blacks and Latinos. Further, the very process of applying for, being accepted to, and graduating from college, especially prestigious colleges, is shaped by one’s social background. To obtain a “ behind-the- scenes” look at who is accepted to prestigious colleges, sociolo- gist Mitchell Stevens (2009) conducted an ethnography in which he spent a year and a half working in the admissions office of an elite New England college. The college was proud of its high academic standards, social conscience, and commitment to diversity. In practice, however, the admissions process often reproduced preexisting inequalities, Stevens found. Although admissions officers did strive for diversity in each entering class, they typically targeted black and Latino students from economically advantaged backgrounds, rather than those from disadvantaged communities in the inner city or rural areas. Working- class whites and ethnic minorities, even those with quite stellar records, often were left out in the cold. DOWNWARD MOBILITY Downward mobility is less common than upward mobility, yet the 2008 recession resulted in an uptick in the proportion of Americans who moved down the social lad- der—either down from their parents’ status (intergenerational mobility) or down from their own earlier economic status (intragenerational mobility). For example, one study found that a middle-class upbringing does not guarantee the same status over the course of a lifetime (Acs, 2011). One-third of Americans raised in the middle class—deﬁned as those who grew up in households between the 30th and 70th percentiles of the income distribution—fall out of the middle class as adults. Downward intergenerational mobility also has increased in recent years. During the late 1980s and early 1990s, corporate America was ﬂooded with instances in which middle-aged men lost their jobs because of company mergers, takeovers, or bankrupt- cies. These executives either had difficulty ﬁnding new jobs or could ﬁnd only jobs that paid less than their previous ones (Newman, 1999). Among the industries most strongly Research on Social Stratification Today235 affected by the recent economic downturn were ﬁnance, construction, and real estate, which primarily employ men. The most common type of downward intergenerational mobility is short-range downward mobility. Here, a worker moves from one job to another that is similar in pay and prestige (for example, from a routine office job to semiskilled blue- collar work). Although such moves may seem fairly minor, they often are accompanied by quite seri- ous psychological costs and may create family strains. Men and women who stake their identity on having a well-paying and rewarding job may ﬁnd themselves despondent working in a job that provides neither rich earnings nor the prestige and satisfaction that accompanied their prior job (Warner, 2010). For women, both inter- and intragenerational downward mobility may have an additional source: divorce. One study found that women who divorced were between 31 and 36 percentage points more likely than their married counterparts to fall down the economic ladder (Acs, 2011). Studies also show that the fortunes of adult women change dramatically upon divorce. Newman (1999) tracked the experiences of upper- middle- class suburban mothers who found themselves struggling to maintain their former lifestyles upon divorce. As we will learn more about in Chapter 15, women’s standard of living drops by as much as 33 percent upon divorce. Ironically, the recent recession may have actually contributed to higher rates of female labor force participation. As in the Great Depression, women are generally paid less and maintain jobs that do not feel the effects of the economic downturn in the same way that predominantly male professions (e.g., construction or manufacturing) do. As a result, some scholars referred to the economic downturn as a “mancession,” in which men suf- fered greater job losses than women (Newman and Pedulla, 2010). Poverty in the United States At the bottom of the class system in the United States are the millions of people who live in poverty. Many do not maintain a proper diet and often live in neighborhoods marked by high crime rates, exposure to dangerous environmental conditions, and run- down, dilapidated homes. Poor persons are more likely than their richer coun- terparts to suffer from every possible health condition, ranging from heart disease to diabetes, and consequently, their average life expectancy is lower than that of the majority of the population. In defining poverty, a distinction is usually made between absolute and relative poverty. Absolute poverty means that a person or family simply can’t get enough to eat. People living in absolute poverty are undernourished and, in situations of famine, may even starve to death. Absolute poverty is common in the poorer developing coun- tries. In industrial countries, by contrast, relative poverty is essentially a measure of inequality. It means being poor as compared with the standards of living of the majority. It is reasonable to call a person poor in the United States if he or she lacks the basic resources needed to maintain a decent stan- dard of housing and healthy living conditions. absolute poverty Ċ Not meeting the minimal requirements necessary to sustain a healthy MEASURING POVERTY existence. When President Lyndon B. Johnson began the relative poverty Ċ Poverty defined according to the living standards of the majority in any War on Poverty in 1964, around 36 million given society. Americans lived in poverty, or about 19 per- cent of the population at that time. In 2015, 236 CHAPTER 8Stratification, Class, and Inequality this number sat at 43 million people, or roughly 14 percent of the population—a modest decline. The rate of child poverty is even worse; one in five children lives in a house- hold with income levels beneath the poverty line. A recent UNICEF study reported that among the 35 wealthiest nations in the world, the United States has the second- highest child poverty rate, falling just behind Romania (UNICEF, 2012). The largest concentrations of poverty in the United States are found in the South, inner cities, and rural areas. Among the poor, 19 million Americans (or 6 percent of the country) live in extreme poverty: Their incomes are only half of the official poverty level, meaning that they live at near- starvation levels (Proctor, Semega, and Kollar, 2016). What does it mean to be poor in the world’s richest nation? The U.S. government cur- rently calculates a poverty line based on cost estimates for families of different sizes. This calculation results in a strict, no-frills budget, which for a family of four in 2015 works out to an annual cash income of just over $24,000, or about $2,000 a month to cover all expenses (Proctor, Semega, and Kollar, 2016). How realistic is this standard of poverty? Some critics believe it overestimates the amount of poverty. They point out that the current standard fails to consider non- cash forms of income available to the poor, such as food stamps, Medicare, Medicaid, and public housing subsidies, as well as “ under-the-table” pay obtained from work at odd jobs that is concealed from the government (Joint Center for Housing Studies of Harvard University, 2014). Others counter that the government’s formula greatly underestimates the amount of poverty because it overemphasizes the proportion of a family budget spent on food and severely underestimates the share spent on housing. According to some estimates, two-thirds of all U.S. families whose income is $15,000 a year (about what would be earned under the federal minimum wage) are spending more than half of their income on housing (Joint Center for Housing Studies of Harvard University, 2014). Still others observe that this formula dramatically underestimates the proportion of older adults (age 65+) who live in poverty, because they spend a relatively small proportion of their income on food yet are faced with high health care costs (Carr, 2010). THE WORKING POOR Many Americans fall into the working poor —that is, people who work at least 27 weeks a year but whose earnings are not high enough to lift them above the poverty line. In 2015, 5.6 percent of the labor force was not earning enough to stay out of poverty (BLS, 2017b). The federal minimum wage, the legal ﬂoor for wages in the United States, was ﬁrst set in 1938 at $0.25 an hour. The national federal minimum wage is now $7.25 per hour, although in February 2014, former president Obama issued an executive order to raise the minimum wage for federal contract workers to $10.10 an hour. Individual states can set higher minimum wages than the federal standard; in 2017 alone, 19 states raised their minimum wage, with the highest hourly minimum wages being in the District of Columbia ($11.50), Massachusetts ($11.00), and Washington state ($11.00). Although the federal minimum wage has increased over the years, it has failed to keep up with inﬂation; today’s minimum wage is only two-thirds of the poverty line Ċ An official government measure to define those living in poverty in the United States. 1968 minimum wage, once the effects of inﬂa- working poor Ċ People who work but whose tion are considered (Elwell, 2014b). earnings are not enough to lift them above the In 2015, there were 8.6 million individuals poverty line. among the working poor. The working poor are Research on Social Stratification Today237 disproportionately nonwhite and immigrant; feminization of poverty Ċ An increase in the Hispanics and blacks are twice as likely as proportion of the poor who are female. whites and Asian Americans to fall into this category. Education can make a signiﬁcant difference in this regard: 16 percent of high school dropouts ﬁnd themselves among the working poor compared to 8 percent of workers with a high school diploma, 4 percent with an associate’s degree, and only 1.7 with a bachelor’s degree or higher (BLS, 2017b). Most poor people, contrary to popular belief, do not receive welfare payments; they earn too much to qualify for welfare. Only 5 percent of all low-income families with a full-time, full-year worker receive welfare beneﬁts, and over half rely on public health insurance rather than employer-sponsored insurance. Research on low-wage, fast-food workers further reveals that many working poor lack adequate education, do not have health insurance to cover medical costs, and are trying to support families on poverty- level wages (Newman, 2000). POVERTY, RACE, AND ETHNICITY Poverty rates in the United States are much higher among most minority groups than among non-Hispanic whites, even though more than 40 percent of the poor are white. As Figure 8.3 shows, blacks and Latinos experience more than double the poverty rate of whites. Median household income among Hispanics was 80 percent of whites’ in 2015; among blacks, it was only 65 percent (Proctor, Semega, and Kollar, 2016). This discrepancy is because they often work at the lowest-paying jobs and because of racial discrimination. Asian Americans have the highest income of any group, but their pov- erty rate is also slightly more than that of whites, reﬂecting the inﬂux of relatively poor Asian immigrant groups. The number of blacks living in poverty has declined considerably in recent years. In 1959, 55 percent of blacks were living in poverty; by 2015, that ﬁgure had dropped to 24 percent. A similar pattern holds for Hispanics: Poverty grew steadily between 1972 and 1994, Figure 8.3 peaking at 31 percent of the His- Americans Living in Poverty, 2015 panic population. By 2015, however, the poverty rate for Hispanics had 30 fallen to 21 percent, including a decline of 2 percent from 2014 to Percentage in poverty 24.1 21.4 2015 alone. This decline is possibly 20 19.7 because the unemployment rate has also dropped signiﬁcantly for 13.5 Hispanics in recent years, although 9.1 8.8 it remains higher than that of whites 10 (Proctor, Semega, and Kollar, 2016; Krogstad, 2014). 0 All Non-

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