Module 28 “Poverty and Social Mobility”

Overview of Poverty and Social Mobility

• In 2019, 11% of the U.S. population, equating to roughly 34 million people, lived below the federal poverty line.

• Despite low unemployment rates, many individuals were left behind as the economy progressed.

• Federal Census shows one in six households struggles to meet fundamental needs, highlighting the prevalence of poverty.

Understanding Poverty Risk

• It’s common for individuals, including policymakers, to view poverty as an issue affecting others.

• A significant number of people may experience poverty at some point in their lifetime; nearly 60% of Americans between ages 20-75 will encounter at least one year of poverty below the official poverty line.

• Factors influencing poverty risk include:

  • Age

  • Gender

  • Race and Ethnicity

  • Marital Status

  • Geographic Location (urban vs. rural)

  • Disability Status

• The Poverty Risk Calculator, developed by Mark Rank and Thomas Hirski, illustrates the probability of experiencing poverty based on personal demographics.

Example Statistics on Poverty Risk

• For a single white individual aged 20-24:

  • 20.4% chance of falling below the poverty line in five years if they have a high school diploma and continue education.

  • 24.5% chance for males with no further schooling.

• For non-white individuals:

  • Males without higher education face a 53.9% chance of falling into poverty.

  • Non-white females show even higher risks, with 69.9% for those with no schooling beyond high school.

Economic Context of Poverty

• The U.S. government increased the minimum wage from 75 cents in 1950 to $7.25 in 2009, failing to keep pace with inflation.

• This discrepancy has resulted in many low-wage workers struggling to meet living expenses.

• The pandemic raised unemployment rates dramatically, revealing systemic inequalities based on race, particularly in employment levels between whites and minorities.

Definitions of Poverty

• Absolute Poverty: A set income level determined by the government, adjusting annually to reflect survival needs.

  • For a family of four, the poverty line was set at $26,200 in 2020.

• Relative Poverty: A standards-based concept where individuals are deemed poor based on their societal standing rather than only survival needs.

  • Necessitates special assistance despite literal improvements in living standards compared to previous decades.

Dynamics of Poverty in the U.S.

• A notable term, Feminization of Poverty, emerged post-WWII; by 2019, 50% of the U.S. poor were women, often single mothers.

• Increasing numbers of single-parent households contribute significantly to the rise in female poverty, compounded by systemic issues like childcare availability and workplace discrimination.

Sociological Perspectives on Poverty

• The concept of underclass describes the long-term poor with limited skills, often trapped in a cycle due to systemic issues, particularly affecting racial minorities.

• Urban poverty persists despite extensive government initiatives, revealing the deep-rooted socioeconomic issues requiring attention.

Social Mobility

• Social Mobility: Movement of individuals between socio-economic statuses (upward or downward).

• Vertical Mobility: Transitioning between different ranks of socio-economic status.

  • Example: A teacher becoming a lawyer (upward) or a banker becoming a taxi driver (downward).

• Horizontal Mobility: Movement within the same rank of social status (e.g., two teachers with identical positions).

Intergenerational Mobility

• Intergenerational mobility describes the social status changes of children compared to their parents.

  • Downward mobility occurs when a child attains a lower status than their parents (e.g., a plumber's child becoming a factory worker).

  • Upward mobility occurs when the child achieves a higher status than their parents.

• Studies reveal a significant stickiness in income quintiles, showing limited upward mobility particularly for children from lower socio-economic backgrounds.

  • For millennials (born 1980-1994), evidence suggests increased challenges and potentially experiencing downward mobility similar to their parents.

Impact of Education on Mobility

• Education plays a critical role in enhancing life chances and social mobility.

  • A college graduate has exponentially higher chances of accessing better income and living conditions compared to high school graduates.

• The increasing norm of higher degrees dilutes the value of a college degree, making it more challenging for new graduates to secure upward mobility.

Societal Inequalities

• Various studies highlight disparities due to race, gender, and ethnicity, strongly affecting social mobility opportunities and labor market outcomes.

• For example, Black and Latino households face considerable challenges in accumulating wealth compared to white families.

Gender Considerations

• Women's employment, often in precarious roles, limits upward mobility opportunities.

• Societal expectations and the need for family care responsibilities impact women's ability to rise economically.

Economic Policy and Social Stratification

• CEO compensation has grown disproportionately compared to average worker pay, causing a widening income inequality gap.

• Discussions on executive pay have become prevalent, reflecting public concern about equity and fair practices in corporate governance.

Conclusion

• Poverty remains a pervasive issue in the U.S., influenced by multiple factors including economic conditions, social policies, and systemic inequalities.

• Understanding the dynamics of poverty and social mobility is crucial in addressing these challenges.