Take your mid-term exam- Social Class and Inequality

Course Learning Goals:

1. Describe how sociologists and other social scientists measure social class;

Social class measures

Objective:

• Variables like education, income, and/or occupation

• Determined by the researcher

Subjective:

• GSS:

• “If you were asked to use one of four names for your social class,

which would you say you belong in: the lower class, the working class,

the middle class, or the upper class?”

This philosopher viewed social class in terms of the oppression of the proletariat by the

bourgeoisie:

A. Max Weber

B. Emile Durkheim

C. Auguste Comte

D. Karl Marx

Karl Marx

Qu.: This sociologist and political economist viewed social class stratification in terms of

income, occupation, and power and prestige. Sociologists who measure social class as

socio-economic status today derive their perspective on social class from his paradigm

A. Max Weber

B. Emile Durkheim

C. Auguste Comte

D. Karl Marx

Max Weber

U.S. Census statistics show that these demographic groups are overrepresented among

people living in poverty:

A. People born outside the United States

B. Indigenous people

C. Hispanics

D. People with a disability

E. All of these

E. All of these

Social Class: Definitions, Measures, and Theories

Chetty, Freedman, Saez, Krugman, Piketty, Bourdieu, Lareau, Jack, slide deck Week

1.1 and Week 2

-Resources

Opportunity Insights

„Big data“:

• Anonymized large-scale administrative records:

• Federal tax records and census data

• Social media network data

Marx vs. Weber

Focuses on power and resources

Key groups:

Bourgeoisie: Own the means of production

Proletariat: Sell their labor

Uses the language of:

Capitalism

Exploitation

Ideology

Oppression

Power

Marx vs. Weber

Takes a three-part approach:

Income

Education

Power & Prestige (type of job and authority)

Uses the language of:

Opportunities

Social stratification

Social status

Origin of the idea of Socio-Economic Status (SES)

Marx vs. Weber

Marx

Focuses on power and resources

Key groups:

Bourgeoisie: Own the means of production

Proletariat: Sell their labor

Uses the language of:

Capitalism

Exploitation

Ideology

Oppression

Power

---

Weber

Takes a three-part approach:

Income

Education

Power & Prestige (type of job and authority)

Uses the language of:

Opportunities

Social stratification

Social status

Origin of the idea of Socio-Economic Status (SES)

1. Understand social science theories about social class, the causes of inequality, and mobility;

Intergenerational social mobility = individuals’ ability to

move up or down the social and economic ladder.

• Some places offer more opportunities than others — but

why?

• Topic: How is social mobility produced at the community

level?

Let’s explore how where you live can shape your chances of

moving up in life.

Social Class: Definitions, Measures, and Theories

Chetty, Freedman, Saez, Krugman, Piketty, Bourdieu, Lareau, Jack, slide deck Week

1.1 and Week 2

Class Measure

• A household’s rank in the national income distribution

• Their total pre-tax income, divided into percentiles from 0

(the poorest) to 100 (the richest)

• Every household is ranked relative to the entire country

• 0%, 25%, 50%, 75%, 100%

·      Power/resources vs. income, education & cultural prestige  

Factor 1. Racial Segregation

Areas with larger African-American populations tend to

have lower upward mobility — for everyone, not just Black

residents.

This suggests that community-level racial makeup affects

opportunity.

Source: Chetty et al., “Where is the Land of Opportunity?”

·      Power/resources vs. income, education & cultural prestige  

Factor 2. Income Inequality

When the middle class shrinks, it becomes harder for people

to move up.

“The factors that erode the middle class hamper

intergenerational mobility more than the factors that lead to

income growth in the upper tail.”

      Power/resources vs. income, education & cultural prestige

Factor 3. K–12 School System

Communities with:

Higher test scores (even when income is controlled)

Lower dropout rates

Smaller class sizes

→ tend to have higher mobility.

Bonus: Places with higher local taxes (which fund schools)

show better outcomes.

  Power/resources vs. income, education & cultural prestige

Factor 4. Social Capital

What is social capital?

→ Strong social networks, community involvement, and civic

engagement.

Areas with:

More religious participation

More local organizations

→ tend to support upward mobility.

Putnam, 1995

Power/resources vs. income, education & cultural prestige

Factor 5. Family Structure

The strongest predictor of mobility.

Kids do better in communities with fewer single-parent

households, even if their own parents are married.

“As with race, parents’ marital status does not matter purely through its effects at the individual level. Children of married parents also have higher rates of upward mobility if they live in communities with fewer single parents.”

• Chetty, Freedman, Saez, Krugman, Piketty, Bourdieu, Lareau, Jack, slide deck Week 1.1 and Week 2

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• Marx vs. Weber

• How do Karl Marx and Max Weber define social class?

Video

The Bourgeoise- Who own the means of production.

The Proletariat- Who do the labor

The Bourgeoise- You own a business and hire workers

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• How many social classes are there, and what makes them different?

Upper Class- Video

Consists essentially of the capitalists in Marx’s system. -The top of the income and wealth distribution. -Those who earn at least 250,000 a year and control much of the country’s wealth.

-This group tend to wield a lot of political and social power.

-Old money and new money

-Old Money- Derive their wealth from inheritance rather than work -People in this class may have jobs but usally take up more honorary positions such as board members.

-New Money- Wealth came from work.

• Marx vs. Weber

• How do Karl Marx and Max Weber define social class?

-His theories were more about what kinds of opportunities a persons class gives them.

-The owner of a big company has different opportunities than the owner of a small shop.

-But they will both have different resources available to them than someone who manages an office or somebody who works in a factory.

• Power/resources vs. income, education & cultural prestige

Social Class -Video

A group that’s fairly similar in terms of income, education, power, and prestige in society.

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• How many social classes are there, and what makes them different?

Upper Middle Class- Video

Typically have incomes between 115,000 and 250,000 per year and make up about 15% of income earners.

About 2/3 of the adults here have college degrees -and many have post graduate degrees.

Its almost a given that their kids will attend college when they grow up.

Adults in this sector tend to have jobs that are considered prestigious- Doctors, lawyers, engineers, and the like.

Their families typically own homes in good school districts, and are able to afford luxuries like travel and multiple vehicles.

They are wealthy at least compared to most Americans.

This group is likely to have wealth from their home, strong 401ks, and finical investments.

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• How many social classes are there, and what makes them different?

Average Middle Class- Video

Make between 50,000 and 115,000 and make up 35% of income earners

The Median family income in the US is 70,700.

Families in this group still tend to own their home, but the mortgages might be more cumbersome. They have some wealth usally tied up in their home or a modest retiernment savings account.

About half of this group is college educated though they are more likley to have attend public universities than private schools.

Average middle class jobs are typically called white collar jobs think office workers, teachers, middle managers.

In Contrast most blue-collar workers or those whose work is primarly based in manuel labor fall into the lower middle class

About 30% of Americans are in this category. with incomes ranging from about 25 to 30 thousand dollars a year

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• How many social classes are there, and what makes them different?

• Lower Middle Class/Working Class- Video

Lower middle class families are less likely to own their homes and typically hold little to no wealth.

-Defining feature is the jobs associated with it.

-Mainly manual labor, which is why its called the working class.

-Facotry work consturction, manufactoring maintaince work- All these jobs genrally fall under working-class occupations.

• While some require technical skills they usally don’t require a college education.

• Jobs are more senstive to how the economy is doing because these jobs tend to be built around making stuff.

• When a ressesion hits, factories need fewer workers to meet demands. Or the plant owners might decide its cheaper to use machines rather than workers to produce their goods.

-Just as vunerable to economic downturns is not more so is the lower class.

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• How many social classes are there, and what makes them different?

Lower Class- Video

Blue Collar workers at the bottom of the income distribution. -They make less than 25,000 a year and tend to work hourly jobs that are part time and unpredictable scheuldes and no benefits like health insurance or pensions

-About 20% of americans or the buttom quintle fall into this group.

-The majority of these families don’t own their own homes and are more likely to live in neighborhoods with higher rates of poverty, lower quality school districts, and higher crime rates.

In contrast to an upper middle class family whose children are more likely to go to college only 9% of the children born in the buttom income quartile complete a 4 year college degree.

-Lower class includes a lot of Americans who are living in poverty

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• The Working Poor

-You can see how its possible to work full time and still live in poverty when you do the math.

• Chetty, Freedman, Saez, Krugman, Piketty, Bourdieu, Lareau, Jack, slide deck Week 1.1 and Week 2

How does Raj Chetty measure social class and mobility?

Measure social mobility in many different ways like your probability of moving from the bottom to the middle class. All those different measures give you similar results

-Social Mobility is much lower both today and in the past than most other developed countries

-Regional Variation in Social Mobility

• Chetty, Freedman, Saez, Krugman, Piketty, Bourdieu, Lareau, Jack, slide deck Week 1.1 and Week 2

What five key factors help explain these differences?

1. Level of segregation- Segregated like Atlanta

2. Income Inequality

3. Quality of schools in an area

4. Strengths of Social networks- Bring people together

5. Family Structure-

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• The Upper Class

The upper class is considered the top, and only the powerful elite get to see the view from there. In the United States, people with extreme wealth make up 1 percent of the population, and they own one-third of the country’s wealth.

Money provides not just access to material goods, but also access to a lot of power. As corporate leaders, members of the upper class make decisions that affect the job status of millions of people. As media owners, they influence the collective identity of the nation. They run the ma-jor network television stations, radio broadcasts, newspapers, magazines, publishing houses, and sports franchises. As board members of the most influential colleges and universities, they influence cultural attitudes and values. As philanthropists, they establish foundations to support social causes they believe in. As campaign contributors, they sway politicians and fund campaigns, sometimes to protect their own economic interests. U.S. society has historically distinguished between “old money” (inherited wealth passed from one generation to the next) and “new money” (wealth you have earned and built yourself). While both types may have equal net worth, they have traditionally held different social standings. People of old money, firmly situated in the upper class for generations, have held high prestige. Their families have socialized them to know the customs, norms, and expectations that come with wealth. Often, the very wealthy don’t work for wages. Some study business or become lawyers in order to manage the family fortune. Others, such as Paris Hilton and Kim Kardashian, capitalize on being a rich socialite and transform that into celebrity status, flaunting a wealthy lifestyle. However, new-money members of the upper class are not oriented to the customs and mores of the elite. They haven’t gone to the most exclusive schools. They have not established old- money social ties. People with new money might flaunt their wealth, buying sports cars and mansions, but they might still exhibit behaviors attributed to the middle and lower classes.

The upper class in the United States consists of about 1% of all households and possesses much wealth, power, and influence.

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• The Middle Class

Many people consider themselves middle class, but there are differing ideas about what that means. People with annual incomes of $150,000 call themselves middle class, as do people who annually earn $30,000. That helps explain why, in the United States, the middle class is broken into upper and lower subcategories. Upper-middle-class people tend to hold bachelor’s and postgraduate degrees. They’ve studied subjects such as business, management, law, or medicine. Lower-middle-class members hold bachelor’s degrees from four-year colleges or associate’s degrees from two-year community or technical colleges.

Comfort is a key concept to the middle class. Middle-class people work hard and live fairly comfortable lives. Upper-middle-class people tend to pursue careers that earn comfortable incomes. They provide their families with large homes and nice cars. They may go skiing or boating on vacation. Their children receive high-quality education and healthcare. In the lower middle class, people hold jobs supervised by members of the upper middle class. They fill technical, lower-level management or administrative support positions. Compared to lower-class work, lower-middle-class jobs carry more prestige and come with slightly higher paychecks. With these incomes, people can afford a decent, mainstream lifestyle, but they struggle to maintain it. They generally don’t have enough income to build significant savings. In addition, their grip on class status is more precarious than in the upper tiers of the class system. When budgets are tight, lower-middle-class people are often the ones to lose their jobs.

The upper-middle class in the United States consists of about 4.4% of all households, with incomes ranging from $150,000 to $199,000.

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• The Working Class

Working-class households generally work in blue-collar jobs such as factory work, construction, restaurant serving, and less skilled clerical positions. People in the working class typically do not have 4-year college degrees, and some do not have high school degrees. Although most are not living in official poverty, their financial situation is very uncomfortable. A single large medical bill or expensive car repair would be almost impossible to pay without going into considerable debt. Working-class families are far less likely than their wealthier counterparts to own their own homes or to send their children to college. Many of them live at risk for unemployment as their companies downsize by laying off workers even in good times, and hundreds of thousands began to be laid off when the U.S. recession began in 2008.

The working class in the United States consists of about 25% of all households, whose members work in blue-collar jobs and less skilled clerical positions.

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• The Lower Class

Although lower class is a common term, many observers prefer a less-negative sounding term like the poor, which is used here. Just like the middle and upper classes, the lower class can be divided into subsets: the working class, the working poor, and the underclass. Compared to the lower middle class, lower-class people have less of an educational background and earn smaller incomes. They work jobs that require little prior skill or experience and often do routine tasks under close supervision. The working poor have unskilled, low-paying employment. However, their jobs rarely offer benefits such as healthcare or retirement planning, and their positions are often seasonal or temporary. They work as sharecroppers, migrant farm workers, house cleaners, and day laborers. Some are high school dropouts. Some are illiterate, unable to read job ads. How can people work full-time and still be poor? Even working full-time, millions of the working poor earn incomes too meager to support a family. Minimum wage varies from state to state, but in many states it is approaching $8.00 per hour. At that rate, working 40 hours a week earns $320. That comes to $16,640 a year, before tax and deductions. Even for a single person, the pay is low. A married couple with children will have a hard time covering expenses. The underclass is the United States’ lowest tier. Members of the underclass live mainly in inner cities. Many are unemployed or underemployed. Those who do hold jobs typically perform menial tasks for little pay. Some of the underclass are homeless. For many, welfare systems provide a much-needed support through food assistance, medical care, housing, and the like. We will discuss the poor further when we focus later in this chapter on inequality and poverty in the United States.

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• The poor

• Lowest levels of income, wealth, and educational attainment

• Low-paying, low-skill, temporary, or part-time jobs with few benefits

• Struggle to meet basic needs despite working full-time

• Higher rates of unemployment and underemployment

• Public assistance

• Homelessness

• Extreme poverty, deep poverty, absolute poverty

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• The working class

• Employed in blue-collar, service, and lower-skilled clerical jobs

• Less formal education

• Live paycheck to paycheck

• Struggle to cover unexpected expenses

• Less likely to own homes or send children to college

• Higher risks of layoffs, unemployment, and economic insecurity

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• The middle class

• Relative financial comfort and economic stability

• Upper-middle-class professionals: doctors, lawyers, managers

• Lower-middle-class: technical, administrative, and support workers

• Typically college education or specialized training

• A comfortable lifestyle, incl. homeownership, healthcare, and

education for children

• Lower-middle-class families:

• Greater financial vulnerability and limited savings

• Differences between people in poverty/ the working poor, the working class, the lower-middle class, the upper-middle class, and the wealthy

• The upper class/ the wealthy

• About 1% of households

• Disproportionate share of the nation's wealth

• Significant power and influence in business, politics, media,

education, & philanthropy

• Both old money (inherited wealth) and new money (self-made

wealth)

• Access to elite social networks, prestigious schools, and high-status

opportunities

• Rely more on investments and inherited wealth than on wages

• Competitive vs. non-competitive economy

• Explanations for inequality

• Income Inequality in the U.S.: Extent & Causes

• Competitive economy theory

• A natural result of a market-driven economy

People earn different incomes based on their skills, education, and effort.

Those who succeed in competitive markets earn more >>> income gaps

Explanations for inequality

• Income Inequality in the U.S.: Extent & Causes

• Rent theory

• Rents, bottlenecks, monopolies

• Economic “rents”—extra income gained through power or privilege, not

productivity.

Examples:

CEOs earning far more than average workers

Tech companies dominating markets

Real estate owners benefiting from rising property values

Often protected by laws, monopolies, or political influence

• Income Inequality in the U.S.: Extent & Causes

• Competitive vs. non-competitive economy

Competitive economy explanation

• In a competitive economy, people earn different incomes based on

their skills and abilities.

• People with lower skill levels tend to earn less.

• People with higher skill levels (like advanced education or specialized

training) tend to earn more.

• Technological changes have increased demand for high-skilled workers

(like engineers or data scientists).

• At the same time, many low-skilled jobs have been automated or

outsourced—leading to lower wages and fewer opportunities.

• Income Inequality in the U.S.: Extent & Causes

• Competitive vs. non-competitive economy

• Non-competitive economy & rents

• Some people earn more than they should

• Not because of skill or effort, but because of advantages like power,

connections, or control over resources.

• What are “rents”?

Extra earnings that come from privilege, not productivity. Examples:

• CEO pay that’s far beyond what their work justifies

• Union wages (when unions are strong enough to negotiate better pay)

• Sweetheart deals, corruption, or economic bottlenecks

Income Inequality in the U.S.: Extent & Causes

• Rents, bottlenecks, monopolies

Rents over time

What’s changed?

• The top earners’ rents have increased

• Gaining more power and income

• The bottom earners’ rents have declined

• Especially as unions lose power and can’t bargain for better wages

• Bottom line:

Inequality results from an economy that is not competitive.

Income Inequality in the U.S.: Extent & Causes

• Rents, bottlenecks, monopolies

• Bottlenecks & inequality 1

• A bottleneck:

• When the supply of goods or services can’t keep up with demand.

• Leads to shortages and rising prices.

• What causes bottlenecks?

• Business monopolies that control supply and limit competition

• Industries like energy, technology, and food are restricting access or raising

prices

• Companies are asking for more money than the products are worth

Income Inequality in the U.S.: Extent & Causes

• Rents, bottlenecks, monopolies

• Bottlenecks & inequality 2

Who benefits?

Top earners in corporations

• Profit from high prices and limited supply

• Consumers and the middle class lose out

• Pay more while earning less

• Bottom line:

Bottlenecks can worsen inequality

• Enrich the powerful and squeeze everyone else

Income Inequality in the U.S.: Extent & Causes

• Taxation

The government & inequality 1

Why taxation matters:

• Strong link between how much top earners are taxed and the level of income inequality.

Progressive taxation means:

Higher earners pay more taxes than lower earners.

The government can redistribute money to support lower-income groups

Income Inequality in the U.S.: Extent & Causes

• Taxation

• The government & inequality 2

Redistribution:

Taxes collected from the wealthy help fund:

Education

Healthcare

Retirement programs

• These services help lift up those at the bottom.

Reduced progressive taxation (lower taxes for the rich) >>> more inequality

• Redistributive policies help but have limits

Income Inequality in the U.S.: Extent & Causes

• Reagan-era policies

Key changes:

Deregulation of the financial sector

• Banks and financial institutions faced fewer rules.

• Allowed for riskier behavior and greater profits at the top.

Elimination of progressive taxation

• Rollback of many tax policies from the New Deal era (1933–1937)

>>> Top earners paid less in taxes, reducing redistribution to lower-

income groups

Eroded the federal minimum wage

The minimum wage didn’t keep up with inflation, meaning lower-income workers

earned less in real terms.

>>> Weakened the economic floor for the working class

Helped increase inequality by:

• Boosting income and wealth at the top

• Reducing support and protections for those at the bottom

Income Inequality in the U.S.: Extent & Causes

Competitive vs. non-competitive economy

Competitive

Those with lower skills get paid less. Technological changes resulted in those with higher skill levels getting paid more.

Income Inequality in the U.S.: Extent & Causes

Competitive vs. non-competitive economy

Opportunities for some to get paid more than what they should get paid in a competitive economy because of corruption, economic bottlenecks, and sweetheart deals

Income Inequality in the U.S.: Extent & Causes

• Rents, bottlenecks, monopolies

Rents such as astronomic CEO pay and union wages.

Causes of rising income inequality: The rents of the top income earners have increased while the rents of the buttom income earners have declined because of the decline power of unions to bargin for higher wages for their workers.

Income Inequality in the U.S.: Extent & Causes

• Taxation

Taxation Matters: Very strong Link between taxation of the top income earners and income inequality.

Reduced progressive taxation has increased inequality

Progessive Taxiation: Taxing the top earners higher than the bottom income earners to have money to redistrubte across income groups through redistribution policies.

Sending on education, health, and retirement matters, but redistribution matters, but redistributive policies (Moving spending from the top towards the bottom to lift up the bottom) has had limits

Income Inequality in the U.S.: Extent & Causes

• Reagan-era policies

-Reagens polices of deregulation of the finical sector (banks) and elimination of progressive taxation put into place during the new deal. -Erosion of federal minimum wage.

Income Inequality in the U.S.: Extent & Causes

Grusky & Owens, Saez, slide deck Week 2, interview with Chetty and video clips on racial wealth gap and housing segregation & redlining, article on South Boston

Policy Solutions

-Proposed solution for local, state, and federal governments.

-Make distribution of human capital (skills, knowledge, and experience of a worker acquired through education and training). Finical capital (income and assets) and bargaining power (of workers for higher wages) more equal.

How to equalize the distribution of primary assets, including human capital, fincial capital, and bargining power?

-Improved education and access to skills which may require major changes in the system of education finance and admission

-Reforms of labour market instituitons to workers bargianing power and including a higher minium wage

-Corporate governments reforms and worker co-determination of distribution of profits: and

-Steeply progressive taxation that affects the determination of pay and salaries and the pre-tax distribution of income, particularly at the top end.

Income Inequality in the U.S.: Extent & Causes

Rents, bottlenecks, monopolies

Rent

Economic returns in excess of what is needed to keep an asset in production in a competitive market.

Others view the economy rife with corruption, bottlenecks, and sweatheart deals that allow Ceos and others with power and connections to extract returns that exceed their marginal product.

Why would CEOs be overpaid? -Insituitons cater to those in power.

Income Inequality in the U.S.: Extent & Causes

Rents, bottlenecks, monopolies

Income Inequality Factor #2

Far from being a highly competitive economy we have an economy that Is increasingly rife with opportunities for those at the top to secure rent for themselves.

-Those who are already powerful in our economy have advantages in securing RENT

-Its not the unfortunate result of running a competive economy. Rather its a sign we are running a grossly uncompetitive economy.

Theres a lot of rent being collected at the buttom too.

Workers at lower end have less opperunity to secure RENT.

Union Wage- a rent thats collected because those outside the unions cant compete for union jobs and therefore undercut the union wage.

Union Wage- a form of rent that accures only to union members

Union wage is a classic form of rent. Its also a declining form of rent. The number of union workers is rapidly shrinking.

Rising rents at the top and declining rents at the bottom. -Prescription for rising income inequality.

Income Inequality in the U.S.: Extent & Causes

Ideal extent

Favor of policy that extends this principle that everybody should be an owner, part owner, of what happens from their work. And they shouldn’t just be getting an hourly pay regardless of how they perform. Share the profits among the whole workforce. So they get profit shares of profits of their companies. Hopefully they have some stocks that they may own in the companies. Spreading the virtues of capatalism to more people giving the incentives to capatlism to normal workers not just the billionaires at the top.

• Economic: progressive taxation, inheritance tax, creating a competitive economy (cease rents, bottlenecks, and monopolies)

The New Deal 1933-1937- Finical regulations progressive income tax

The development of extremely progressive taxation preventing those fortunes from recovering from the shocks of the Great Depression and World War 2. -Post war have low level of inequality

Income Inequality in the U.S.: Extent & Causes

• Reagan-era policies

Video

With the election of Ronald Reagan the new deal polices start being reversed with deregulation and a sharp drastic lowering of the top income tax rate down to 28%.

• Social mobility & Opportunity Atlas

-Lighter colored areas correspond to areas with greater Social Mobility. -Places like Iowa are at 16% are very close to a perfect Mobile Society

Red- So essentially if your born to a low income family in these darkests red areas you have very low odds of escaping poverty.

Very large regional variation. -The southeast of the United States has very low levels of Social Mobility compared to parts of the Great Plains, parts of the West Coast, and Northeast.

-Urban areas have lower rates of Social Mobility than Rural areas.

-Low income Kids growing up in places like Iowa or South Dakota North Dakota they seem to do extremely well. But importanlty the really successful kids they are not staying in Iowa or North Dakota. They are moving to big cities to get high paying jobs as adults.

So its something about these rural areas thats helping low income kids from diadvantage backgrounds move up and succed in other labor markets.

Solutions to Reduce Inequality and Increase Opportunity

• Economic: progressive taxation, inheritance tax, creating a competitive economy (cease rents, bottlenecks, and monopolies)

There is a very strong link between the shape of income concentration over time in the U.S. and the shape of top tax rate over time.

Taxing top incomes more does not reduce economic growth and could actually be beneficial for the bottom 99% because rich countries today tax a very substantial share of income to fund a number of programs including health benefits, retirement benefits, education.

Ultimately reproduce a trickle down phenonomen where the income would flow down to the bottom 99%

• Family influence, cultural knowledge, cultural guides, & reproduction of inequality

Social Mobility

Social mobility refers to the ability to change positions within a social stratification system. When people improve or diminish their economic status in a way that affects social class, they experience social mobility.

Individuals can experience upward or downward social mobility for a variety of reasons. Upward mobility refers to an increase—or upward shift—in social class. In the United States, people applaud the rags-to-riches achievements of celebrities like Oprah Winfrey or LeBron James. But the truth is that relative to the overall population, the number of people who rise from poverty to wealth is very small. Still, upward mobility is not only about becoming rich and famous. In the United States, people who earn a college degree, get a job promotion, or marry someone with a good income may move up socially. In contrast, downward mobility indicates a lowering of one’s social class. Some people move downward because of business setbacks, unemployment, or illness. Dropping out of school, losing a job, or getting a divorce may result in a loss of income or status and, therefore, downward social mobility. famous. In the United States, people who earn a college degree, get a job promotion, or marry someone with a good income may move up socially. In contrast, downward mobility indicates a lowering of one’s social class. Some people move downward because of business setbacks, unemployment, or illness. Dropping out of school, losing a job, or getting a divorce may result in a loss of income or status and, therefore, downward social mobility. A key vehicle for upward mobility is formal education. Regardless of the socioeconomic status of our parents, we are much more likely to end up in a high-paying job if we attain a college degree or, increasingly, a graduate or professional degree. Figure 8.4 “Education and Median Earnings of Year-Round, Full-Time Workers, 2007” vividly shows the difference that education makes for Americans’ median annual incomes. Notice, however, that for a given level of education, men’s incomes are greater than women’s. Figure 8.4 “Education and Median Earnings of Year-Round, Full-Time Workers, 2007” thus suggests that the payoff of education is higher for men than for women, and many studies support this conclusion. The reasons for this gender difference are complex and will be discussed further in Chapter 11 “Gender and Gender Inequality”. To the extent vertical social mobility exists in the United States, then, it is higher for men than for women and higher for whites than for people of color. It is not uncommon for different generations of a family to belong to varying social classes. This is known as intergenerational mobility. For example, an upper-class executive may have parents who belonged to the middle class. In turn, those parents may have been raised in the lower class. Patterns of intergenerational mobility can reflect long-term societal changes. Similarly, intragenerational mobility refers to changes in a person’s social mobility over the course of his or her lifetime. For example, the wealth and prestige experienced by one person may be quite different from that of his or her siblings. Structural mobility happens when societal changes enable a whole group of people to move up or down the social class ladder. Structural mobility is attributable to changes in society as a whole, not individual changes. In the first half of the twentieth century, industrialization ex-panded the U.S. economy, raising the standard of living and leading to upward structural mobility. In today’s work economy, the recent recession and the outsourcing of jobs overseas have contributed to high unemployment rates. Many people have experienced economic setbacks, creating a wave of downward structural mobility. When analyzing the trends and movements in social mobility, sociologists consider all modes of mobility. Scholars recognize that mobility is not as common or easy to achieve as many people think. In fact, some consider social mobility a myth. The American Dream does exist, but it is much more likely to remain only a dream unless we come from advantaged backgrounds. In fact, there is less vertical mobility in the United States than in other Western democracies. As a recent analysis summarized the evidence, “There is considerably more mobility in most of the other developed economies of Europe and Scandinavia than in the United States”

Causes of inequality

1. The Economy

• Non-competitive economy

• Business monopolies, bottlenecks, and rents

2. Government & Politics

• Policies that shape income inequality

• Taxation, regulation of financial & business sectors, rents

3. Structural Racism

• Systemic barriers based on race

• Unequal outcomes built into institutions

Income Inequality in the U.S.: Extent & Causes

Rent theory

• Economic “rents”

• Extra income gained through power or privilege, not productivity.

Examples:

➢ CEOs earning far more than average workers

➢ Tech companies dominating markets

➢ Real estate owners benefiting from rising property values

• Often protected by laws, monopolies, or political influence

Income Inequality in the U.S.: Extent & Causes

Rents over time

What’s changed?

• The top earners’ rents have increased

• Gaining more power and income

• The bottom earners’ rents have declined

• Especially as unions lose power and can’t bargain for better wages

• Bottom line:

Inequality results from an economy that is not competitive.

Income Inequality in the U.S.: Extent & Causes

• Rents, bottlenecks, monopolies

• Bottlenecks & inequality

• Physical bottlenecks, e.g., the Strait of Hormuz oil disruptions

• Increased the cost of basic commodities, fuel, and groceries

• Disproportionately affects lower-income households

• Spend a significantly larger percentage of their income on essentials

• Erodes disposable income and personal savings

• = A regressive tax

Income Inequality in the U.S.: Extent & Causes

Ideology & Patrimonial Capitalism

Narratives & Mobilization:

What does Piketty mean when he talks

about narratives and mobilization as forces that drive social and

political change?

• The Power of Ideas:

What is Piketty’s argument about how ideas can influence society and

policy? Why does he believe ideas matter so much?

• Diffusion of Ideas:

What does this term mean in the context of economic and political

change?

Ideology & Patrimonial Capitalism

• Corporate Governance Models:

What different ways of organizing corporations does Piketty discuss?

How do these models affect inequality and decision-making?

• Government Strategies for Innovation:

According to Piketty, what are the two main approaches

governments use to boost innovation and economic growth?

• Proposed Solutions:

What solutions does Piketty propose to tackle inequality and

promote fairer economic systems?

Class, Race & Gender Intersections

Mineo, Chetty, video clips, article on South Boston

Liz Mineo – Main ideas

• Large Black-white wealth gap

• Reproduced across generations

• Results of legacies of advantages and disadvantages

• Concrete practices, laws, and policies

• Historical and contemporary: housing and labor market discrimination

• Anti-bias education as early as preschool

• Access to education and training to keep up with skills in

demand by the economy

• Invest in (public) higher education infrastructure and

facilitate access to higher education

Khan Academy

Learn the basics of two major economic systems and how they impact inequality.

-A lot of Socialists or communists would claim that extreme forms of capitalism when the wealth disparity becomes too extreme or where you have inherited wealth actually goes against the idea of meritocracy.

Inherited wealth generation after generation. Old money. What fair about that? That people are just randomly born into a situation where they can extract the interest off of their wealth and never have to work. -And other people have to work super hard and they get nothing for it.

-Situation where the rich becomes outright dominant. This person becomes so big that none of the other players can even compete with them. So they all disappear. This person can just undercut everybody. And all the other players disappear. -Monoply and everyone else has died down this is the only player in the economy then all of a sudden he has not incentive to innovate. -Can just keep raising prices. There’s no competition. There’s no-one else to say I can have a better product or I can sell it to you cheaper. Goes against the ideas of innovation.

The control of resources. Use it to influence government when you have excess resources.

Idea of inherited wealth -Do the children deserve the wealth? What did they do to earn the wealth? Maybe there are other kids who are smarter -Children can mismanage the resources. -Inherites enough money has not incentive to work. He gets millions of money just off of interest. I’ll just hire people at the minimum wage to take care of things for me.

Old Money means you did not earn the money yourself and you just happened to be born in this family. You have done nothing

New money maybe it was luck but maybe it was through innovation.

Solutions to Reduce Inequality and Increase Opportunity

• Chetty, Saez, Piketty, Krugman

Wealth is currently concentrated in the hands of a few and that rapid economic growth or government intervention intervention can disperse wealth concentration.

Governments should act now and impose a global tax on wealth to reduce inequality and prevent future political instability.

Productivity growth rate innovation as far as devilers productivy growth rate was higher before 1980 then it has been since then.

Paying a manager 10 million instead of less is not useful. Certain point just dont see the data.

Diffusion of wealth the fact that we have large quantiies of wealth relative to GDP. Want everyone to have a chance to access property.

Start accomumlating wealth people have to start from zero we need to have more balanced tax system taxing labour income less and taxing large accumilated wealth a bit more

Income Inequality in the U.S.: Extent & Causes

Rise of oligarchy

Six of the 10 wealthiests Americans are already heirs rather than self made entrepreneurs and the children of today’s economic elite start form a position of immense privilege. As Mr. Piketty notes “The risk of a drift toward oligarchy is real and gives little reason for optimism.” If you want to feel even less optimistic consider what many U.S. politicians are up to. America’s nascent oligarchy may not yet be fully formed- but one of our two main political parities already seem committed to defending the oligarcy’s interests.

Bear in mind that both Koch brothers are numbered among the 10 wealthiest Americans and so are four Walmart heirs. Great wealth buys great political influence. Think tanks and captive media is ultimately financed by a handful of mega donors. Not surprisingly those in the bubble tend to assume isnstivitely that what is good for oligarchs is good for America.

The results can sometimes seem comical. The important point to remember however is that the people inside the bubble have a lot of power which they wield on behalf of their patrons. And the drift toward oligarchy counties.

Class, Race & Gender Intersections

Mineo, Chetty, video clips, article on South Boston

The wealth gap between Black and Whire Americans has been persistent and extreme. Disparities in income, health, education, and opportunity.

The net wealth of a typical Black family in America is around one tenth that of a white family.

Jim Crow laws, which existed till the late 1960s virtually ensured that Black Americans in the South would not be able to accumulate or to pass on wealth.

Lenders often unfairly turned down black applicants shutting them out of benefits. -Redlining.

-Deeply systemic the problem had become. -Better enforce anti-discrimation laws and invest in schools in low-income neighborhoods.

-Wealth is discintive because it can be used as a cushion and it can be directly passed down across generations.

-If you have wealth it can protect you if you lose your job or your house. Wealth is discintitive because it can be used as a cushion and it can be passed along generations. -Providing families more choices and greater opportunity in the present and the future.

-Ability to accumulate wealth “Todays African American adults and children are living with the legacy of discrimination, inequality, and exclusion from slavery to redlining and other discriminatory practices.

Typical white American family has roughly 10 times as much wealth as the typical African American family and typical Latino Family.

Black parents tend to have much lower wealth than white parents and that black and white children tend to follow the wealth postions of their parents, reproducing inequality across generations. Institutionalized discrimination.

Consider education to be the key to narrowing the gap. Rising inequality has led to growing gaps in education resources and learning oppertunites between high and low income families. Residental and educational segergation by income. Expanding access to higher education could actually help reduce inequality.

The legaices of the JIm Crow era and racism agianst Blacks are expressed today in residential segregation, housing discrimination, and discrimination in the labor market.

When low income families move to lower poverty neighorhooods, with help of housing votchers and assistance its likely to reduce the persistence of poverty across generations.

Education means more than just extra dollars in the bank. Its also the constellation of things that come along with it.

We must pay attenention to what happens once those low income students move into campus because its where inequality gets reproduced in ways that are sometimes invisible but no less insidious.

Education actually would make a difference in terms of ingenerational mobilty.

investing in higher public education wont solve all the myriad problems that effect inequality such as declining minium wage and discrimination in the labor market among others. But it would be a good first step.

Class, Race & Gender Intersections

Housing policies, redlining, housing segregation, white flight. -Video

Residential Security Maps- Redlining. Landlords abandon their properties, city services become unreliable, crime increases, property values drop.

White people flee to suburbs have convents that especially forbid selling homes to black people.

Fair housing act of 1968. -Its meant to encourage equal housing opportunities. Offers protection for future homeowners and renters. The fair housing act is rarely enforced.

Homeownership is the major ways Americans create wealth.

Discrimination in housing is the major reason that black families up and down the income scale have a tiny fraction of the family wealth compared to white families even white families with less education and Lower incomes.

Still much harder for a black person to get a mortgage or home loan than it is for a white person.

People who live in more valuable homes have better funded schools, better paid teachers, better school facilities, and more resources.

The better the schools in the neighborhood the more those homes in the neighborhood are worth. And higher the property values of those homes.

People of color are more likely to live near industrial plants that spew toxic fumes. Live far away from grocery stores with fresh produce and water is less drinkable. More likely to live in neighborhoods with crumbling infrastructure and toxic paint. Lead, rats, roaches. Higher cancer, asthma, and heart disease.

Policing- Housing segregation means we are having vastly different experiences with crime and policing. Because our neighborhoods are so segregated sometimes racial profiling can be camouflaged as spatial profiling. Where living in certain areas where living in certain areas can make you more likely to be stopped by the police. Means that people have a lot of unnecessary contact with the criminal justice system just because of where they live.

Housing segregation and discrimination fundamentally shape the lives of people in nearly every major American city.

Why is education not currently a great equalizer?

2. Education is currently not a great equalizer because people have better educational opportunities depending on their wealth. Raj Chetty explained that academics have less of an impact on where a person attends college than it should. If two students have the same SAT score, but one of the students is wealthy while the other is middle class or low income. The wealthier student is more likely to attend an Ivy League college than the middle or low income student, regardless of academics. College education has an impact on a person's future wealth, but the education system makes it harder for middle or lower-income individuals to receive better-quality education to increase their wealth. The education system, by favoring wealthy individuals, helps to preserve generational wealth regardless of a person's academic abilities. 

What caused inequalities in South Boston and the Boston suburbs?

3. What causes inequalities in South Boston and the Boston suburbs is that people of different incomes do not live in the same neighborhoods, causing a divide between people of different incomes. This is especially harmful for low income individuals because people not living or interacting with people of different incomes makes it very difficult for people to grow their wealth. Income segregation helps to keep the rich wealthy and reduces the possibility of the poor gaining wealth. Income-segregated neighborhoods are especially harmful for children because where a child lives impacts the resources they receive, the schools they attend, their safety, and their role models. Role models are important for children because if they are in contact with adults who attended college, they are more likely to attend college and get a higher-income job because of the role models in their lives who inspire them. Since low-income neighborhoods are more likely to have fewer resources, higher-income individuals are more likely going to move to better neighborhoods. However, instead of making all neighborhoods equal regardless of residents' income to attract higher-income individuals, more resources are put into higher-income neighborhoods, which in turn keeps residents separated by income. Neighborhoods in America and Massachusetts, with its higher cost of living, are prone to being separated by income. However, it has been shown that less income separation can help low-income individuals, especially children, build their wealth and help higher-income children develop empathy towards others not like themselves. 

Class, Race & Gender Intersections

• Mineo, Chetty, video clips, article on South Boston

Black people even today their chances of upward mobility is dramatically lower than they are for white Americans. Gaps relative to Americans are large.

More concentrated poverty where you're not mixed in with higher income folks, you tend to have lower rates of upward mobility. 2. Family structure is a very strong predictor of upward mobility across areas. 3. Places with better schools both at the k through 12 level and in terms of access to higher education have higher levels of upward mobility. 4. Places with greater social capital in particular greater degrees of connection and interaction between low and high income people tend to have higher levels of upward mobility. Job referral. Aspirations change when you are living in a community where they have gone to college or pursed certain career paths.

Education is seen as the great equalizer. Is it the answer to bring people out of poverty and increasing social mobility? At present education is not functioning at a level playing field and creating more social mobility. Kids from high income families are much more likely to attend top colleges. Much more likely to attend even if they have the same academic qualifications at the point of application. Perpetuating privilege across generations. Propel you to the top. Tremendous potential to create more mobility. But at present it’s not leading to a way that is leading to that outcome.

Higher-performing schools are located in wealthier neighborhoods.

Better you do in these environments, the better your outcomes.

Greater economic mobility is also associated with better health. Same factors leading to declines in economic outcomes and lower levels of economic mobility are correlated with the deterioration of health.

Solutions to Reduce Inequality and Increase Opportunity

• Moving to opportunity and bringing opportunity, housing, zoning, mixed-income neighborhoods; higher ed access; stopping affirmative action for the wealthy…

Important changes we can make in the education space

Housing vouchers to move to lower poverty, better neighborhoods and we uniformly find that neighborhood is profoundly important for all these reasons.

Mentors- If you are growing up around folks in certain career pathways that has a tremendous impact on what kids end up doing. Having exposure with mentors.

Mentor, the importance of k through 12 schools, other neighborhood level factors.

Hyperlocal its about where you are growing up within something like a one mile radius around your house and where you are connected to and your childhood environment are playing a key role in your life trajectory.

Help people move to higher opportunity areas, designate cities by class and race. People with housing vouchers still live in low opportunity high poverty areas. No more likely to break the cycle of poverty and rise up in the next generation. Trying to change affordable housing policies, changing zoning laws, create more integration in our cities.

Bring opportunity to people where they live. Improve schools in certain areas, create more social capital, and transform neighborhoods can be very valuable.

Education- Trying to make our higher education system

Race and class are correlated with each other. Race and class are distinct issues. Mobility by race.

Class, Race & Gender Intersections

“Lost Einsteins”: Role of mentors and innovators

Coined a term we call “lost Einsteins” we estimate using that data that we would have four times as many inventors in America. If women, unnderepensted minorities, and kids from low-income families were to become inventors at the same rate as high income white men. Lost Einsteins who I think are lost because of all the factors discussed they don’t have exposure to the same set of factors, don’t have access to the same schools, not attending the same colleges, disconnected socially. Would have more innovation and economic growth.

Class, Race & Gender Intersections

• Mineo, Chetty, video clips, article on South Boston

West Broadway marks the dividing line between the affluent, where the median family income is more than $250,000, and the underprivileged, where it’s just $60,000. It’s one of the starkest contrasts in Greater Boston, which is among the most income-segregated metropolitan areas in the country and has experienced some of the largest increases in income divergence in recent years.

fewer neighborhoods with an array of income levels. The rich are clustered with the rich, the poor with the poor. can limit access to relationships and resources that spur upward mobility, the report states, perpetuating inequities across generations.

Where children grow up can determine what school they go to, which resources are accessible, how much crime they’re exposed to, and whom their role models are.

has a profound impact on how long a person lives. In 2023, the Boston Public Health Commission found a 23-year difference in life expectancy between an area in Roxbury, where the median family income is around $60,000, and one in Back Bay, where it’s more than $250,000.

extremely powerful empirical evidence that neighborhoods matter,’’ Durlauf said. “They mold people.’’ Indeed, low-income people who have contact with well-off residents are more likely to go to college and have higher earnings.

the rich keep getting richer, they’re becoming more isolated. The increase in income segregation in Greater Boston over the past four decades has been driven mainly by the rise of high-income households

Soaring costs make it more challenging for people to work their way out of subsidized housing because they can’t afford to rent nearby.

Sharp income divides aren’t confined to cities. Some affluent suburbs — including Wellesley, Lexington, and Sudbury —contribute greatly to the Boston area’s income segregation. In one census tract in Natick, the median family income is $209,000, according to MassINC data; in an adjacent tract in Framingham, it’s just $49,000.

The high cost of living in Massachusetts, coupled with high rates of income inequity, mean that lower-income households have to grapple with prices shaped by one of the country’s most expensive markets armed with disproportionately low spending power.

Take kids’ sports, she said, where children from well-off families pay to play in club sports year-round and end up dominating school teams that used to be accessible to everyone.

Causes of inequality

Economy, Government & Politics, Structural Racism

1. The Economy

• Non-competitive economy

• Business monopolies, bottlenecks, and rents

2. Government & Politics

• Policies that shape income inequality

• Taxation, regulation of financial & business sectors, rents

3. Structural Racism

• Systemic barriers based on race

• Unequal outcomes built into institutions

Cultural capital

-Culture is the linchpin of class domination

-Cultural economy and material economy are related

-We need economic capital to sustain cultural capital (time and energy)

-Cultural and social capital translate into economic capital

-Continuous reproduction>> very limited avenues for

social change

Cultural capital- Embodied state:

Dispositions, bodily and verbal manners, tastes, the way we speak and write

Cultural capital- Objectified state

Ability to ‘consume’ or use writings, paintings, monuments, instruments, tools, machines, etc.

Cultural capital- Institutionalized state

Institutional recognition through academic qualifications

Cultural stratification

Tastes in painting and music

The kinds of food we eat

The way in which we entertain friends

The furniture we buy

The sports we watch or play

The makeup we wear

The way we speak and dress

The political issues we support and reject

Social capital

Social networks conferring privilege or distinction

The name of a family, school, party, etc.

“Social capital is the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition– or in other words, to membership in a group– which provides each of its members with the backing of the collectivity-owned capital, a ‘credential’ which entitles them to credit, in the various senses of the word”

Symbolic violence

violence inflicted by culture

Formal school system, child-rearing, media, religion, styles

people exhibit in public, etc.

Insidious power of the dominant class–invisible and hidden,

for example, equal opportunity rhetoric re: education.

“Power which manages to impose meanings and to impose them as legitimate by concealing the power relations which are the basis of its force.”

Annette Lareau: concepts

Accomplishment of natural growth, Concerted cultivation, Cultural knowledge, Cultural guides

Argument- Cultural Capital

Economic and cultural resources: important in transmission of

inequality,

-Cultural knowledge, which varies by social class, is salient for children’s life outcomes,

-Cultural knowledge: “facts, information, skills and familiarity with social processes”, Children and young people with greater cultural knowledge and strong social connections are more likely to pursue higher education, earn more income and maintain high socio-economic status.