Chapter 5: Stratification and Class Notes

Chapter Aims

Explore contemporary patterns of stratification, including wealth and poverty, at both the local and global levels.
Review sociological debates about class and its significance in contemporary society.
Discuss the nature of poverty and economic marginalization, examining the groups most affected in recent decades.

Introduction

Sociology has traditionally regarded class as a significant element of inequality, especially in industrial-capitalist societies.
The chapter questions the relevance of 'class' as a concept due to changes in production and ownership locally and globally.
Stratification related to gender or ethnicity has intensified, alongside general inequality, requiring analysis of these forms of stratification.
Stratification is defined as the hierarchical divisions of a society based on socially determined criteria or characteristics.

Characteristics of Stratification

People classify others using markers or characteristics, leading to assessments of status with varying implications.
Stratification involves ranking individuals within groups and groups within a hierarchy, prevalent in any community or society.
Societies are universally stratified by age, gender, economic background, ethnicity, family lineage, or achievements.
Sociologists debate the nature, causes, desirability, and solutions to stratification.
Nearly all stratification is socially determined, a product of community beliefs reflected in social relationships and structures.
Beliefs about inequality are translated into practice, structuring major institutions like families, workplaces, political groups, education, and health.
Stratification significantly impacts opportunities, resources, and status.
Group members face similar expectations, opportunities, and barriers based on group membership.
In societies like Aotearoa New Zealand, gender or ethnicity are key markers for stratification, empowering some and dispossessing others, leading to inequality.

The Importance of Inequality

Inequality has been a central focus since the Industrial Revolution.
Inequality implies disapproval and concern due to the marginalization of significant populations, resulting from unfair discrimination.
Inequality leads to poverty, ill-health, poor education, and inadequate housing and has been a major political and theoretical focus of sociology.
Anthony Giddens argued that expanding inequality, along with ecological risk, is a critical issue facing world society, with growing polarization among ethnic groups, young and old, rich and poor, within and between nations.
Gains in reducing inequality in the mid-20th century were being reversed by the end of the century, with new forms of inequality emerging.
Some view inequality as desirable for encouraging individual responsibility and economic competitiveness, while most sociologists disagree.

Class and Inequality

Class has been a major form of inequality in sociology.
Karl Marx argued that capitalism creates class relations with conflict between the working class and the ruling class.
This remains a central theme in sociology, although there are competing approaches and radical alterations of classical Marxism.
The significance of class is questioned due to changes in capitalist production, work, ownership, and production locally and globally.
Sociology has developed understandings of inequality, focusing on gender and ethnicity-based inequalities as distinct from class stratification.
Stratification and inequality remain central to sociological theory and research.

Differences and Divisions: The Significance of Class

Class is a significant concept contributed by sociology to debates about capitalist societies, derived from Karl Marx and Max Weber.
Their arguments about class are updated to address recent concerns, questioning the continued significance of class as a central theoretical focus.

Marxism and Class

Marx focused on how different modes of production operate, organizing the production and reproduction of material basis in societies.
Class inequalities and conflict existed in all human societies.
The nature of production relations changed with different modes, leading to different forms of exploitation and contradictions between social relations (class/ownership) and productive forces (science/technology).
Under capitalism, workers sell labor and experience alienation, reinforced by the need to intensify production for accumulation by the ruling class.
Capitalism is characterized by the impoverishment of the working class in terms of labor return and job satisfaction.
Class consciousness leads to conflict with those in power (bourgeoisie), who own and manage the means of production, and the middle class aligned with them.

Europe vs. The New World

Arguments about capitalism and class influenced sociological understanding of social stratification, especially in Europe.
Industrialization and urbanization created class distinctions in community and work.
In Germany and Britain, the working class lived in distinct communities, experienced work as described by Marx, and believed in working-class organizations, until changes in work and organizations in the late 20th century.
Sociologists described the reality of life and contributed to working-class resistance.
Marxist class analysis was less persuasive in settler societies like the USA, Australia, and New Zealand, where the ambition was to escape class societies and emphasize the 'classlessness' of their new home.
These 'frontier societies' provided opportunities not available in densely populated Europe.
In Europe, feudal ruling class merged with the capitalist ruling class, but societies like New Zealand experimented with democratic changes.
Differences arose from the lack of class-based traditions and the ideological belief that class was not relevant in new settler societies.
Classlessness is the ideological position that class does not exist or is not important in a given society.

Classical Marxism in Aotearoa New Zealand

Despite British-trained sociologists, few in Aotearoa New Zealand were classical Marxists.
David Bedggood maintained a traditional Marxist analysis.
His 1980 book, Rich and Poor in New Zealand, provided a standard Marxist 'science of society', examining the colonial class structure and capitalist manufacturing established through intense exploitation.
Bedggood adapted Marxism to explain the colonization of New Zealand, the incorporation of Māori into the working class, and the welfare state.
He argued the welfare state was not a victory for the working class but a means for the capitalist state to administer exploitation by redistributing taxation to the capitalist class.
This 'vulgar' Marxism was not convincing in the New Zealand context.

Neo-Marxism in Aotearoa New Zealand

Erik Wright's neo-Marxist approach focuses on exploitation and domination.
His methodology identifies four classes: owners, self-employed, middle class, and workers.
Wilkes (1994) stressed the political and economic importance of the middle class, domestic labor, class fractions, and ideological relations.
Four questions identify class: Owns a business? Purchases others' labor? Holds a managerial role? Receives wages or salary?
Wilkes acknowledged the shift from Fordism to post-Fordism and the absence of class analysis in the post-WWII intellectual agenda.
Despite being a more persuasive account, it has not created a strong tradition of class analysis in New Zealand.
There remains a reluctance among sociologists and the public to see class as a central characteristic of Aotearoa New Zealand, despite escalating inequality since the 1980s and 1990s economic reforms.
In 2017, the Labour Government campaigned on growing inequality.
Fordism involves large-scale, mechanized assembly-line production, breaking work into unskilled tasks.
Post-Fordism is a shift from mass production to flexible manufacturing units.

The Weberian Approach

There has been a resurgence of interest in class and inequality analysis in New Zealand.
This draws from Weber's alternative approach, which was unconvinced by Marx's analysis of class.
Weber provided a diffuse definition of class, adding party and status as co-equal characteristics.
Class was only one basis for inequality and was determined by market processes and position in the mode of production.
Weber agreed class was economically determined but status or party could be equally important and reflect non-economic factors, such as ethnicity affecting life chances.
Neo-Weberians like David Thorns, Peter Davis, and David Pearson contributed to the study of inequality in New Zealand.
Peter Davis discussed life chances and lifestyles, indicating interest in non-economic class characteristics, demonstrating health status is a function of class and ethnicity.
David Thorns showed neo-Weberian interest in the middle class and consumption, looking at homeownership as a dimension of wealth distribution and inequality.

Class (and Classlessness) in Aotearoa New Zealand

Class is an enduring theme in sociology but has not always been important in analyzing particular societies like Aotearoa New Zealand because there are beliefs about its classlessness.
There is a political and sociological significance of non-class inequalities, notably gender and ethnicity.
Post-war feminism, a powerful force in New Zealand, distrusted class analysis that reduces gender issues to economic arguments.
The convincing case involves a model of household composition (male breadwinner), inadequate acknowledgment of gendered work, and an assumption of the same class position for both partners.
Gender and ethnic inequality have displaced class analyses, playing a major role in sociological practice.

The Social and the Personal: Wealth and Poverty

The enduring social policy concern has been poverty.
Sociology has contributed to the debate on poverty, agreeing to needing some form of welfare state.
Economic reforms in the 1980s redefined poverty as individual inadequacy but contributed to growing poverty levels.
The questions of who is likely to be poor and who is likely to be wealthy are back on the research and policy agenda.
These are key questions for sociologists, with a wide range of answers regarding appropriate policy responses.

Class, Colonialism, and Māori

Class does not exist in isolation; ethnicity, nationality, gender, and sexual orientation intersect and shape class experiences.
Class and class struggles are experienced through inherited cultural values and social expectations.
The intersections of class, gender, racism, and oppression have been scholarly debates.
Ethnic and class inequalities are not reducible to each other, class inequalities have structured indigenous communities globally.
The historical development of settler societies like Aotearoa New Zealand has been structured by class conflict.
The establishment of a British settler colony brought capitalism into contact with a pre-capitalist Māori society.
Capitalism involves the exclusive ownership of the means of production by a capitalist class, preventing workers from maintaining an independent livelihood and forcing them to sell their labor for survival.
Settler colonialism (alienation of indigenous land and resources) and Māori labor migration were interlocked.
Land alienation forced Māori to rely on wage labor, and creating capitalism involved destroying communal property rights and establishing capitalist private property.
Economic expansion after WWII centralized industrial production in larger cities, leading to Māori migration to urban centers.
Māori were incorporated into the working class, concentrated in blue-collar occupations with long hours, low pay, and poor conditions.
They faced inadequate housing, discrimination, and racism and the collapse of the post-war boom exacerbated social, economic, and political inequalities.
Māori households have been disproportionately represented in the lower income quintiles and under-represented in higher income quintiles.
Growing inequality in the 1980s and 1990s affected Māori more, with social polarization within Māori communities.
A minority of Māori have benefited from the pro-business, neo-liberal agenda since 1984.
Class antagonisms within Māori communities have shaped politics, with militant Māori protests in the 1990s challenging the Treaty of Waitangi settlement framework and the narrow commercial interests of tribal authorities.
It includes discontent with corporate models for managing settlement assets and the failure of free-market strategies to solve historical grievances and Māori inequality.

Defining and Measuring Poverty

Absolute poverty: The absence of basic necessities like food and shelter, threatening survival.
Relative poverty: Measured against an acceptable standard of living in a society; lacking essential resources for participation.
In Aotearoa New Zealand, relative poverty is mainly used.
'Poverty' is a charged term used by agencies and parties to argue for or against measures to address the needs of the poor.
Questions arise about how best to identify and measure poverty and who the poor are.
Townsend (1979) explored relative deprivation in the UK, noting up to half the population experienced it, lacking access to 'customary' things.
Criticism of this approach exists for defining 'poverty' as arbitrary or generous.
Sociologists use income as a benchmark, defining those below a level who cannot afford basic needs as below the poverty line.
Easton (1995) discussed drawing the poverty line in New Zealand (the 1972 Royal Commission suggested the income set for a couple on 'the pension' as a minimum level) and the number of people below it (485,000–593,000 in 1991/92).
Easton developed the 'benefit datum line' (BDL).
The Poverty Measurement Project used income and deprivation measures in the 1990s, and the Ministry of Social Development used 60% of median income as a measure of the economic standard of living after 2002 (Economic Living Standards Index).
Since 2001, the Ministry of Social Development has published an annual 'Social Report' using social wellbeing indicators and the Survey of Family, Income and Employment (SoFIE) in 2003/4.
In 2006, the top 10% of individuals owned 51.8% of total net worth, while the bottom 50% owned 4.2%.
Relative deprivation is establishing essential living standards to determine who is deprived.

Trends in Levels of Poverty

The number of people living below or just on the poverty line is increasing.
Wealth distribution studies confirm this trend.
In the USA, 80% of working Americans' incomes fell by 18% between 1973 and 1995, transferring US200 billion from the bottom three-fifths to the top one-fifth.
In Aotearoa New Zealand, the top 5% of households increased their share of national wealth after the 1984 economic reforms, the next 15% held their own, and the bottom 80% became worse off.
The richest individuals (top 10%) held 60% of all wealth by July 2015, up from 55% between 2003 and 2010.
The distribution of wealth is becoming more unequal, and poverty is growing.

Who is Most Likely to Be Poor?

The profile of the poor does not vary much in the Western world.
Households more likely to be below the poverty line include single-parent families, large families (six or more children), and those dependent on benefits.
Family type and reliance on benefits can lead to intergenerational poverty.
Changes to economies and labor markets have produced work-poor households lacking adequately paid work history.
The poorly paid are an important group whose circumstances are worsened by tighter welfare regulations.
The elderly also constitute a growing proportion of the poor due to early retirement, lack of resources, and the costs of being elderly (medical, mobility, heating, housing).

Poverty and Ethnicity

Poverty is associated with ethnicity; being a migrant or a member of a disadvantaged indigenous or ethnic minority increases levels of poverty.
Gray (1998b) discusses Brazilianization, classes separated by 'race', with emphasis on racial disadvantage.
This is apparent in Aotearoa New Zealand, particularly for Māori and Pacific peoples, with worse outcomes in ill-health, income levels, benefit dependence, educational performance, and access to paid work.
Pākehā earn 7% more than the average New Zealand salary, while Pacific peoples earn 50% and Māori 28% less (Chatterjee, in Campbell G., 1998, p. 18).
In 2016, the median hourly wage for Pākehā was 24.88, for Māori was 20.83, and for Pacific peoples was 19.66 (Statistics New Zealand, 2017b).
More than 40% of Māori households are single-parent ones, and nearly half are benefit-dependent, indicating an ethnic underclass.
Pool (1991) demonstrates this has become embedded in the experience for Māori with non-participation in wealth-creating institutions and substantial intergenerational implications.
Weberians discuss life chances: the opportunity to gain access to institutions that enhance status and quality of life, like education.
In 2006, only 36.7% of Māori had achieved NCEA Level 2 or above when they left school compared with 65.4% of Pākehā and 82.2% of Asians (Ministry of Social Development, 2007).
In 2016, 69.4% of Māori achieved NCEA Level 2 compared with 85% for Pākehā.
Despite gains, the life chances of Māori remain poor as achievement remains lower than average.
Māori represent a group likely to be in poverty and have lost ground since the 1980s.

The Role of Sociology

The claim that there are more poor, a definite poverty line, and certain groups are likely to be found near or below it is contested, representing a failure of political management and social service delivery.
It is seen as an indictment of society and a political intervention that sociology can make when poverty measures are defended as methodologically robust.
Poverty has implications for the quality of life, and sociology provides a human dimension to disadvantage, fulfilling its humanitarian tradition.

The Local and the Global: The Changing Dimensions of Stratification and Class

Changes in the world economy, domestic policy focusing on a reduced welfare state, and increased reliance on individual competitiveness have implications for stratification and class.

Growing Polarisation

Social policy and the economy complemented each other until the 1980s, with mass employment giving security and generating revenue for redistribution.
Economic prosperity, the welfare state, and full employment provided the basis for security and a softening of class distinctions in countries such as Aotearoa New Zealand.
This changed in the last two decades of the 20th century, leading to polarization within and between countries.
The impact on class politics has altered the standard of living of some classes.
Unequal wealth distribution exacerbated in the 1980s and 1990s, with those at the top gaining more and those at the bottom losing their share. Full employment gave way to casualized work and lower pay.
New technologies and a global labor market meant tax resources were 'spent on rescuing growing groups of poor people through cash benefits' (Glennerster, 1998, p. 11).
Services such as healthcare and education were attacked for poor quality of service.
This led to a neo-liberal regulatory and administrative approach to welfare and targeted and strictly administered benefits and services.
There was an emphasis on individuals and households carrying individual provision costs, especially in healthcare and education.
Wealth transfers were discarded, leading to new levels of disparity and poverty, exacerbated by a lack of paid employment.

Shifts in Industry Type

De-industrialization and the McDonaldisation of employment contributed to jobs that paid wages below benefit incomes.
In the 1970s, 14,000 Merseyside dockers handled 17 million tonnes of goods, but in the 1990s, 400 dockers handled 30 million tonnes.
Traditional sources of income were replaced by service industries.
Jobs were no longer available for semi-skilled and unskilled workers, involving women entering the labor market.
Glennerster (1998) notes paid employment is the 'essence of social security and dignity'.
Employment in manufacturing and primary production disappeared, and the new weightless economy appeared, including computing, telecommunications, biotechnology, and entertainment.
This forced more people to become active in the informal economy of undeclared earnings and illegal activities.
Emphasis on flexibility and individual competitiveness was supplemented by action zones, clusters, stake-holding, and the creative society.
Economic and social inequality have grown during this period.
New Zealand experienced a radical experiment in economic reform: 'The neo-liberal experiment in New Zealand is the most ambitious attempt at constructing the free market as a social institution. Among the many novel effects of neo-liberal policy in New Zealand has been the creation of an underclass in a country that did not have one before.'

Aotearoa New Zealand’s Experience of Neo-Liberalism

Aotearoa New Zealand experienced the greatest increase in income inequality during this period, the nature of disadvantage is obvious.
Globalisation of production and de-industrialization contributed to the decline of working-class jobs.
Jobless growth has had effects on the semi-skilled and unskilled sectors and the collapse of working-class organizations and a growing distance between working-class communities and traditional political representatives.

The New Underclass

Economies of Eastern and Central Europe have collapsed into anarchic capitalism.
Those excluded from employment and adequate welfare support are the new excluded – from basic requirements, adequate income, and employment.
Classical Marxism does not apply, and understandings dealing with global and local changes are needed to analyze the working class and a new underclass.
Sociologists and economists use the term "precariat," a fusion of precarious and proletariat, to describe these social changes towards a condition of existence without predictability or security and to give a new focal point for political action to manage through the idea of a universal basic income.
Precariat is a fusion of precarious and proletariat and is a condition of existence without predictability or security.

Changes for the Middle Class

There have been shifts impacting the middle class; Gray (1998b) discusses the reversal of embourgeoisement.
The middle classes are rediscovering assetless economic insecurity, resembling the proletariat of nineteenth-century Europe.
Affluence has been eroded by insecurity and middle-class unemployment.
There is some evidence of middle-class poverty in Aotearoa New Zealand, with income earners slipping in the 1980s to one of between 52,085 and 17,777$$ in the 1990s.
Middle classes do not have the same level of state subsidy or support as in earlier decades, with more disposable income going on education and health spending, which was moderated by policies like 'Working for Families'.
Politically powerful middle-class people have been unable to counter global influences or protect their affluent status.

Conclusion

Classical Marxist interest in stratification and class has had to be modified due to the impact of welfare policies and the welfare state, the evolving nature of capitalist-industrial economies, women in wealth generation, the growth of the middle class, and the importance of consumption.
An explanation of the contemporary nature of stratification needs to incorporate these elements; a neo-Weberian approach gives more significance to the cleavages associated with consumption.
Neo-Marxists focus on economic distinctions derived from location in the means of production.

Inequality and Polarisation

Interesting questions have arisen about changes to global and local societies as ownership and production have been transformed.
Inequalities that marked the post-war decades are now intensified.
Inequality is growing in countries like Aotearoa New Zealand, and the degree and nature of polarization has changed.
Age, regional location, ethnicity, gender, and participation in paid employment are defining the new poverty and inequality.
The nature of production, ownership, and control has changed, more so in some industries than in others, along with the nature of labor markets and access to income.
Stratification has never been off the political or sociological agenda, but the intensification of inequality has made it a major policy and humanitarian issue.

The Question of Class

The remaining question is whether class is the most appropriate concept to use in analyzing the stratification that now exists.
Class has a long history in sociology, associated with the emergence of a particular form of industrial capitalism and inequality based around ownership and labor in the means of production.
Are such an approach and the concept of class still useful in describing the different world of the twenty-first century?
Can the notion of class be rescued and modified to adequately address the nature of social relations and economic production?
The answers depend on and sociological inclinations and whether the changes of recent decades as being so fundamental that existing concepts such as class are past their use-by date.