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3/7/2021 Week 5 reading response Stratification I: capitalism and class inequality

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Week 5 reading response Stratification I: capitalism and
class inequality

Due Mar 15 by 11:59pm Points 6 Submitting an external tool
Available until Mar 20 at 11:59pm

Directions:
Answer each question below based on your understanding of the assigned readings.
Each response should be approximately 250 words, which is roughly one page double-
spaced, so your completed assignment with both responses should be about 2 pages
double-spaced every week. Ignoring these length requirements is the easiest way to lose
points.
Questions are worth 3 points each, for a total of 6 points.
Please NUMBER each response.

Readings: Khan textbook, Chapter 4

Questions:

1) Explain how the data presented in Figures 5, 6 and 7 (on pages 16, 17, and 18 respectively)
relate to the trend we see in Figure 4 on page 13. What do these findings suggest about the
prospects for upward socio-economic mobility in the US today?

2) Class is both an ascribed status and an achieved status, and class position is also influenced
by other statuses. Explain your understanding of this in reference to two patterns you can
identify in Table 4 on page 20.

Grading Rubric
These are analytical reading questions – I am asking you to complete the reading, to think about
its meaning and significance, and to begin to apply key concepts from this reading. These are
NOT opinion questions, and they are not questions that Google can answer. To earn full credit,
be sure to demonstrate a real engagement with the ideas from the assigned reading.
Please do not quote from the readings – translate everything into your own words.

If your discussion of the ideas is lacking – i.e. it is superficial or vague, and/or shorter than the
required length – I will deduct a portion of the points and explain this deduction in the
Comments section of the assignment. If it is clear to me that you did not complete the reading,
your response will earn zero points. As always, any submissions containing plagiarism will
receive zero points.

3/7/2021 Week 5 reading response Stratification I: capitalism and class inequality

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Social Class,

Inequality, &

Poverty

Peter Kaufman, State University of New York at New Paltz

Todd Schoepflin, Niagara University

Social Class, Inequality, & Poverty

Page 2

Social Class, Inequality, &

Poverty

P E T E R K A U F M A N , S T A T E U N I V E R S I T Y O F N E W Y O R K A T N E W

P A L T Z T O D D S C H O E P F L I N , N I A G A R A U N I V E R S I T Y

SOCIAL CLASS

The social class structure of the United States

Is social class ascribed or achieved?

Social mobility

INEQUALITY

The grow ing gap betw een the poor and t he rich

United States ine quality in global c ontext

POVERTY

What is poverty?

Characteristics of the poor

The w or king poor and t he jobless poor

Homelessness

The i mportance o f affordable hous ing

Social Class, Inequality, & Poverty

Page 3

INTRODUCTION

 Why do sociologists study social class inequality?

I was raised in a poor household. My mom is a Hispanic single mother on welfare who lacks

formal education. My father was an Italian immigrant who died of alcoholism. I grew up with

my mom’s side of the family. Among most of my family tobacco and alcohol use were

prominent. Marijuana and cocaine were also used frequently. The most successful thing I

ever witnessed anyone in my family do was join the army or graduate high school. Working

was hardly the trend in my family. My diet consisted of mostly unhealthy foods: fried meats,

sauces loaded with salt, pork fat, greasy snacks, lots of soda, and microwaveable food items.

If I saw anything green on my plate I thought, “eww disgusting” and I wouldn’t touch it. Not

surprisingly, I was overweight for much of my childhood and adolescence. And with all of the

second-hand smoke I breathed in I also developed asthma.

When I was 18, my mother kicked me out of the house and I moved in with the family of a

rich, white, friend of mine. This family had a different position in life on so many levels. They

had different interests, concerns, and ways of doing things. It all seemed so foreign to me.

For example, they were very health conscious. They had foods and products in their home

that I had never seen or heard of before. The parents even took time to exercise daily. And

they had lots of books in the home which they actually read. Although the way they lived

seemed strange to me I also knew that the lifestyle of this family allowed them to have many

more possibilities than I could ever imagine in my upbringing.

This excerpt comes from an essay written by Alejandro (Alex) Russo, a student in one of our

sociology classes.1 This brief autobiographical sketch captures many of the themes that we discuss in this

chapter. It also offers a snapshot of how social class has a significant impact on our lives. As Alex suggests,

social class influences our goals and aspirations, our potential and possibilities, our lifestyle choices and

habits, and even our health and well-being.

Despite its significance, social class often goes unacknowledged. We often don’t recognize the

effect of social class until we interact with people who have different economic resources—much like Alex

didn’t recognize the influence social class had on his life until he moved in with his wealthy friend. In this

way, we may say that social class is invisible in plain sight. Unlike characteristics such as race and gender,

which are more obvious and easier to see and define, we can’t always figure out someone’s social class just

by looking at them. But if we are seeing the world sociologically, indicators of social class quickly come

into focus.

Social Class, Inequality, & Poverty

Page 4

Some of us, like Alex, grow up in poverty while others, like Cher from MTV’s My Super Sweet 16

(Season 4), get a Jaguar XK (valued at $96,000) for their birthday.

Some students attend rat- and cockroach-infested schools with outdated and insufficient textbooks

while others attend schools with state-of-the-art facilities and computers for every student.

Some adults work three jobs and over 80 hours a week just to support their families while others

enjoy paid vacations, health insurance, and employer contributions to a retirement account.

And some of us live in cities like Flint, Michigan, while others live in cities like Bloomfield Hills,

also in Michigan. Although these two communities are separated by only 45 miles, the life experiences of

the people who live there are worlds apart. In Flint, the median household income is $25,000, 40% of

residents live in poverty, the unemployment rate is nearly twice the national average, and the city is famous

for its lead-contaminated drinking water, its abandoned and boarded-up homes, and its rising homicide

rate.2 In contrast, Bloomfield Hills is one of the richest cities in America. The median household income is

$179,000, the assessed value of most homes is close to $1 million, and the community is known for its

quiet, rural residential properties, its exclusive country clubs, and its world-renowned educational

institutions.

In this chapter we take a journey through the landscape of social class. We meet other individuals

and consider how their lives have been shaped and guided by their social class position. Some individuals

are greatly supported and enabled by their social class position while others, like Alex, face many obstacles

and constraints. Before examining how social class contributes to some of these inequalities, we begin with

a solid understanding of what exactly we mean when we use the term social class.

SOCIAL CLASS

 How do sociologists make sense of social class?

 What is the social class structure of the United States?

 Are we assigned a social class at birth or is it something we accomplish?

 Is the American Dream alive and well or is it just a myth?

Consider this list of Hollywood films: Pretty Woman, Boyz n the Hood, 8 Mile, Titanic, Dreamgirls,

Pursuit of Happyness, Annie, Slumdog Millionaire, The Hunger Games, Snowpiercer, The Great Gatsby,

and The Wolf of Wall Street. They all have one thing in common: they revolve around social class.

Social Class, Inequality, & Poverty

Page 5

Social class is one of the central concepts in sociology. As you learned in the first chapter, sociology

began when scholars started investigating the economic inequality they witnessed, particularly during the

late 1800s and early 1900s. One of these early sociologists was Karl Marx. One of Marx’s central concerns

is no different than what many sociologists still study today: the growing economic gap between the haves

and the have-nots.

Social class is just one form of stratification, or a system that puts categories of people into a

hierarchy. All societies have stratification systems, but they vary in what categories are used to sort people

and how unequal those categories of people are. Religion, gender, wealth, and race are common foundations

for stratification, leading to unequal access to resources, political rights, and other benefits. In other

chapters, you’ll learn about how the U.S. is stratified according to race, ethnicity, and gender. In this

chapter, we’re focusing on economic stratification, and we analyze social class inequality in the U.S. as a

structural problem, not as something that results from personal failing.

A social class is generally defined as a group of individuals who share a similar economic position

based on income, wealth, education, and occupation. When referring to social class, most people rely on a

simple system consisting of the upper, middle, and lower (or working) classes. This model is quick and

convenient; however, as we will see, social class is much more complicated than this.

Most definitions of social class are based on income, the total amount of money someone earns each

year. Income is a convenient indicator of social class, and it’s commonly used to identify a person’s class

standing.

Another common indicator of

social class is wealth—the total

amount of money that an individual

possesses or could possess if she sold

off all her assets. If you take all the

money in your bank and retirement

accounts, and add the value of

everything you own—cars, a home,

property, anything you have invested

in the stock market, and anything else

you that you could sell—the resulting

total amount is your wealth. Although

there is often a strong connection

between income and wealth (that is,

people who earn high salaries also often

own a lot of wealth), this is not always the case. You could have wealth from sources such as savings,

investments, real estate, and inheritance, even if you don’t earn a high income, or any income at all.

Factory workers in South Carolina, a typical working-class job. (Source:

Wikimedia Commons)

https://commons.wikimedia.org/wiki/File:Defense.gov_photo_essay_080118-D-7203T-043 )

Social Class, Inequality, & Poverty

Page 6

The amount of money we make or have is not the only factor that may determine our social class.

Education and occupation are also often included in the mix. Both characteristics—how far we went in

school and what kind of job we have—are linked with income and with each other.

The social class structure of the United States

Over 30 years ago, an undergraduate student at Harvard University walked into a public housing

project outside of Boston and began research for his senior thesis. Little did he know that he was laying the

groundwork for what was to become one of the most well-known sociological studies of social class in the

United States. Jay MacLeod’s Ain’t No Makin’ It is a story of two groups of teenagers who lived in the

housing project: The Brothers, a predominantly Black peer group, and the Hallway Hangers, who were

predominantly White.3

MacLeod followed the Brothers and the Hallway Hangers from their teenage years into young

adulthood and then into middle age. He documents their dreams, aspirations, successes, and failures. Ain’t

No Makin’ It demonstrates that social class can be a complicated concept to understand. In fact, it’s often

ignored and unacknowledged. Even though it had a significant impact on the life choices and chances of the

Brothers and Hallway Hangers, social class was not part of their vocabulary. This is true for the majority of

Americans today: Most of us do not speak about social class regularly. In the rare instances when we do talk

about social class or are asked to identify our own social class position, Americans almost always say we

are middle class.4

If we want to understand the important impact that social class has on our lives, we can’t rely on the

simplistic model of lower, middle, and upper classes. We need to account for multiple factors such as

income, wealth, education, and occupation. To accomplish this, we use Dennis Gilbert’s model of the class

structure that relies primarily on income, occupation, and education.5 Although Gilbert does not factor in

wealth, since it is often difficult to measure, we can see how wealth is connected to these other three factors

and how it might influence our social-class standing.

Gilbert’s model of the class structure includes six social classes that are situated within three broad

categories. At the top is the first category, the privileged classes, made up of what he calls the capitalist

class and the upper-middle class.

The capitalist class (commonly known as the top 1%) makes money from the things they own:

businesses, real estate, stocks, and bonds. Although the 1% may work, they usually do not gain their

tremendous wealth from their annual salary. Instead, they are part of the super-rich because the things they

own (their wealth) bring them a continual stream of lucrative profits.

Social Class, Inequality, & Poverty

Page 7

The second group in the

privileged class category is the upper-

middle class. Comprising about 14% of

the population, these well-educated

individuals rely on their high incomes

from jobs to catapult them into this

category. Typical jobs among this group

include business managers, doctors,

lawyers, accountants, and some small

business owners. Gilbert includes a sub-

category at the top of the upper-middle

class called the working rich. Although

relatively small in size, this group

includes individuals whose annual incomes are well into the six-figure range. One of the main features that

distinguishes this group from the capitalist class is that the working rich still rely on their salaries to

maintain their class position.

The second category in Gilbert’s social-class model is called the majority classes. Here we have

about 60% of the population, evenly split between the middle class and the working class. People in the

middle class are likely to have a high school diploma and some college experience (an increasing number

even have a bachelor’s degree). They work as teachers, nurses, master craftspeople (plumbers, electricians,

carpenters), and lower-level managers. Just below them is the working class. These individuals have

probably only completed high school or a trade school; they typically work as office support (secretaries

and administrative assistants), retail sales workers, factory workers, or low-paid craftspeople.

As you consider the distinctions between the middle class and the working class, you may be

thinking of examples of people you know who don’t quite fit into this model. That’s not surprising. As

Gilbert points out, the distinction between the middle class and the working class can be fuzzy. You may

know someone who has only a high school education but works in an occupation and earns a yearly salary

that puts them in the middle class. On the other hand, some people may have a higher level of education

(such as a college degree) but work in jobs that place them in the working class, either by choice or because

they can’t find a better job. Determining social class is not an exact science. Instead of relying on just one or

two factors such as income or education, we need to consider the interplay between these factors.

The third and final category in Gilbert’s model is the lower classes. Making up about one-quarter of

the U. S. population, this group contains the working poor (15%) and the underclass (10%). Both have some

education, but most do not have more than a high school diploma.

The working poor are typically employed in insecure and low-wage jobs such as janitorial and

cleaning services, manual labor, landscaping, restaurant support (including fast food, wait staff, line cooks),

Eye surgeon, an example of an upper-middle-class job. (Source)

https://pixabay.com/en/eye-surgery-female-medical-young-766166/)

Social Class, Inequality, & Poverty

Page 8

and

other service industries.

Because the jobs held by the working poor do not generally provide much in

the way of benefits (medical, dental, or vision care; paid vacations; retirement accounts), the working poor

are more likely than social classes

above them to face financial insecurity

and instability. Many workers in these

jobs also encounter unpredictable and

inflexible work schedules, putting them

in even more stressful and precarious

situations since their income may vary

from week to week.

Author Barbara Ehrenreich tried

to survive on these types of low-wage

jobs in order to understand the daily

struggles of the working poor, an

experience described in her book Nickel

and Dimed: On (Not) Getting By in

America. She worked as a diner

waitress, motel maid, housecleaner, and Walmart salesperson and found it nearly impossible to cover the

cost of rent, gas, and meals. Benefits that the middle and upper classes may take for granted, such as paid

sick leave, didn’t exist at these jobs; when Ehrenreich was sick, she had to go to work anyway because she

couldn’t afford to lose a day’s wages. As she pointed out, long days on the job, sometimes followed by a

shift at a second job just to make ends meet, leaves low-wage workers with little energy or spare time to

look for better jobs or to attend college.

At the bottom of Gilbert’s model is the underclass. They may be part-time workers, unemployed, or

may have inconsistent and unreliable work opportunities (such as seasonal work that is only available for

part of the year). Many of these individuals rely on public assistance benefits, which have been shrinking

over the past twenty years. Although their financial insecurity forces this group to rely on public assistance

to help pay for food, shelter, and clothing, they actually receive less in government benefits than the

majority and privileged classes.6 While the lower classes may receive limited benefits in the way of food,

housing, and tax subsidies, the wealthier classes gain significantly more valuable benefits through

government policies that allow them to drastically lower the amount they owe in taxes. The ability to write

off expenses such as part of their mortgage interest payments (which is most valuable for those with the

most expensive homes), deposits into retirement accounts (which low-income workers are often unable to

afford), and profits from certain types of stock trading or capital gains are all tax benefits provided to more

privileged individuals.7

Fast-food workers on strike for higher pay. (Source)

Social Class, Inequality, & Poverty

Page 9

Table 2: Gilbert’s Model of the Social-Class Structure in the United States8

C l a s s , % o f

H o u s e h o l d s

S o u r c e o f I n c o m e ,

O c c u p a t i o n o f M a i n

E a r n e r

T y p i c a l E d u c a t i o n T y p i c a l H o u s e h o l d

I n c o m e , 2 0 1 2

Privileged Classes

Capitalists, 1% Investors, executives,

heirs

Selective college or

university, often graduate

or professional school

$1 million

Upper middle, 14% Upper management and

professionals, successful

small business owners,

including the working

rich

College, often graduate

or professional study

$150,000

(working rich: $500,000)

Majority Classes

Middle, 30% Lower-level managers,

semiprofessionals,

nonretail sales workers,

craftsmen

At least high school,

often some college

$70,000

Working, 30% Machine operators, low-

paid craftsmen, clerical

workers, retail sales

workers

High school $40,000

Lower Classes

Working poor, 15% Most service workers,

laborers, low-paid

machine operators, and

clerical workers

At least some high school $25,000

Underclass, 10% Unemployed or part-time

work; many depend on

public assistance and

other government

programs

Some high school $15,000

Is social class ascribed or a chieved?

As you think about the descriptions and characteristics of these various social classes, you are

probably locating yourself somewhere in Gilbert’s model. You may even realize that you’re in a different

social class than the one you thought you were in. Maybe you grew up assuming you were in the middle

class (as many people do), but according to Gilbert you fit into a different category. But as you ponder

where you fall on this social class spectrum you might also consider how you actually ended up in that

particular social class location. Did you use your own income, education, and occupation or did you use

your parents’? Did you receive your social class through birth or is it something you accomplished through

your own efforts?

Social Class, Inequality, & Poverty

Page 10

These questions reflect an important distinction discussed in the chapter on Social Structure and the

Individual: the difference between ascribed and achieved statuses. As you’ll recall, an ascribed status is one

you acquired when you were born or that you take on involuntarily later in life. In contrast, you gain an

achieved status at least in part through your achievements, abilities, or efforts.

Children born into poverty. (Source)

When you were born, you automatically entered into the social class of your parents or guardians.

You did not get to choose if you were born into the capitalist class or the working poor. But the social class

ascribed to us at birth is not necessarily the social class we achieve when we become adults. For example,

nearly 30% of students entering four-year colleges and more than 50% of students who enter two-year

colleges are first-generation students—neither of their parents attended college.9 Most of these students are

probably in college because they view education as a way to achieve a higher-paying job and a higher social

class than their parents.

The distinction between ascribed and achieved social class status is particularly relevant when we

try to understand social inequality. There is a long-standing assumption, particularly in the United States,

that social class is largely an achieved status. Most people believe that your position in the social class

structure is dependent mostly on your own individual efforts: are you motivated, do you work hard, do you

make sound financial decisions, and are you willing to go the extra mile?

But the idea that our social class standing is based our own merit is not altogether accurate.

Consider the demographics of the CEOs of the Fortune 500—a list of the 500 largest and most profitable

https://pixabay.com/en/children-poor-mud-village-kids-60654/

Social Class, Inequality, & Poverty

Page 11

companies in the U.S. In 2018, this list contained only 24 women CEOs (4.8%) and just 3 African

American CEOs (less than 1%).10 Given that women make up nearly 51% of the U.S. population and

Africans Americans comprise a little over 13%, we might ask why CEOs of Fortune 500 companies are

overwhelmingly White men. Are women and African Americans just not working hard enough or not

motivated enough to lead the biggest companies in America? Or is something about their race and gender

(both ascribed characteristics) holding them back from making it to the top?

Another example might hit closer to home. You may have taken the SAT, ACT, or another

standardized test at some point. Did you know that the best way to predict a student’s performance on these

college entrance exams is to measure their family income? As Table 3 shows, if you want to do well on the

SAT, your best strategy is to be born into a wealthy family.

Table 3: SAT Scores and Family Income

Family Income Critical Reading Mathematics Writing

$0-$20,000 435 462 429

$20,000-40,000 465 482 455

$40,000-60,000 487 500 474

$60,000-80,000 500 511 486

$80,000-100,000 512 524 499

$100,000-120,000 522 536 511

$120,000-140,000 526 540 515

$140,000-160,000 533 548 523

$160,000-200,000 539 555 531

More than $200,000 563 565 586

Source: College Board11

One reason for this relationship between social class and educational achievement is that parents

with higher incomes have more resources to help their children succeed academically. As Annette Lareau

demonstrates in her book, Home Advantage, although parents from all social classes have similar aspirations

for their children, those with greater financial means can significantly boost their kids’ learning by stocking

their house with lots of books to read, sending their children to higher-quality daycares and schools, and

paying for tutors and test preparation courses.12 You’ll read more about Lareau’s work in the chapter on

Education. And as we will see in the next section, these advantages (or disadvantages) help explain why

many people reproduce their ascribed social class position.

Social Class, Inequality, & Poverty

Page 12

Social mobility

“Don’t let somebody ever tell you, you can’t do something. If you want something, go get it.

Period.” These lines are from the movie The Pursuit of Happyness, based on the actual life of Chris

Gardner. Gardner went from being homeless to working in the finance industry and later became an

inspirational speaker. In moving from a life of poverty to an achieved social class of wealth and comfort,

Chris Gardner’s story exemplifies the rags-to-riches narrative of the American Dream.

The American Dream is a strongly-

held and much-cherished belief in the

United States. We are told that with hard

work, determination, and a “can do” spirit,

it’s possible to be born into a working poor

or even an underclass family and eventually

make it into the more privileged classes. The

American Dream suggests that an ascribed

social class should not hold you back from

becoming who or what you want to be. As

long as you work hard, have a good attitude,

and don’t give up, you can live your dreams.

When people like Chris Gardner

move from an ascribed social class position

to a new achieved social class position, they have experienced social mobility. Upward mobility, which is

most often discussed in the context of the American Dream, occurs when someone moves from a lower

social class position to a higher one. This form of mobility is obviously the one most of us would prefer.

But we can also experience downward mobility—dropping into a lower social class. The decline in social

class standing may occur due to factors such as being laid off, choosing to pursue a less lucrative career path

than your parents, making bad financial decisions, or getting divorced (a common cause of downward

mobility for women).13

The idea of the American Dream is regularly invoked by politicians, educators, religious leaders,

and media pundits. We also have shining models of the American Dream like Oprah Winfrey, Jay-Z, and

Arnold Schwarzenegger. The idea that the American Dream is alive and well is so pervasive that most

people don’t even question it. Many of us just assume that upward social mobility is the norm. “The sky’s

the limit,” to borrow a song title from the late Notorious B.I.G.

Chris Gardner. (Source: Wikimedia Commons)

https://commons.wikimedia.org/wiki/File:Chrisgardner

Social Class, Inequality, & Poverty

Page 13

But sociologists often refer to the American Dream as a myth—and with good reason. As you can

see from Figure 4, the likelihood that individuals will earn higher incomes than their parents has been in

steady decline since the 1940s. Currently, only about 50% of children will experience upward mobility. And

for African-Americans who want to live the American Dream like Chris Gardner, Oprah, and Jay-Z, the

odds of doing so are even lower. Compared to their White counterparts, Blacks are not only more likely to

be born into poverty but also much more likely to stay in poverty throughout their lives. They are also more

likely to experience downward mobility—the reverse of the American Dream.14

The American Dream is such a powerful idea that it can feel unpatriotic to challenge it. However,

inspirational examples of individuals from humble origins who battle through adversity and eventually

triumph do not accurately reflect reality for most Americans. These stories of shining stars make it seem as

if achieving the American Dream is equally available to everyone. But thinking back to the story of Alex

that began this chapter, it should be obvious that individuals like him face many more obstacles and

disadvantages in their pursuit of the American Dream than more privileged individuals do. As a result,

social-class inequality is not only widespread but is also increasing at a rapid pace—both in the United

States and around the globe.

Figure 4: Upward Mobility by Year of Birth

Source: The Equality of Opportunity Project15

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60%

70%

80%

90%

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The Fading American Dream

Social Class, Inequality, & Poverty

Page 14

Review Sheet: Social class

Key Points

 Social class is a central concept in sociology.

 Social class is often defined by a combination of income, wealth, education, and occupation.

 When most people think of social class in the United States they think of a simple, three-tiered model of
upper, middle, and lower (or working) classes; however, the structure of social class in the U.S. is more

complicated.

 The six social classes in Dennis Gilbert’s model of the class structure are the capitalist class (1%),
upper-middle class (14%), middle class (30%), working class (30%), working poor (15%), and

underclass (10%).

 Research suggests that the American Dream is fading for many young people today; instead of enjoying
social mobility, they will more than likely reproduce the social class position of their parents.

 Currently, only about 50% of children will earn higher incomes than their parents.

 The idea that social class is achieved based on our own merit can be called into question when we
consider the demographics of Fortune 500 CEOs.

 There were 24 women (4.8%) and 3 African Americans (less than 1%) on the 2018 list of Fortune 500
CEOs.

Key People

 Karl Marx

 Jay Macleod

 Annette Lareau

 Dennis Gilbert

Key Terms

 Social class – Group of individuals who share a similar socio-economic position based on income,
wealth, education, and occupation.

 Stratification – A system that puts categories of people into a hierarchy.

 Income – Amount of money an individual earns from employment or investments.

 Wealth – Total amount of money that you possess, or would possess if you sold off your assets.

 Capitalists – Commonly known as the 1%; class that makes money from things they own such as
businesses, real estate, stocks, and bonds.

 Upper middle class – Well-educated individuals who typically have jobs as business managers,
doctors, lawyers, accountants, and some small business owners.

 Middle class – Likely to have a high school diploma as well as some college experience; typically
work as teachers, nurses, master craftspeople (plumbers, electricians, carpenters), and lower-level

managers.

 Working class – Have probably only completed high school or a trade school; typically work as office
support (secretaries and administrative assistants), retail sales workers, factory workers, and low-paid

craftspeople.

 Working poor – Typically employed in insecure and low-wage jobs such as janitorial and cleaning
staff, manual labor, landscaping, restaurant support (including fast food, wait staff, line cooks), and

other service industries.

Social Class, Inequality, & Poverty

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 Underclass – Work part-time, unemployed, or have inconsistent and unreliable work opportunities;
often rely on public assistance to meet basic needs for food, shelter, and clothing.

 Social mobility – Movement from an ascribed social class position to a new achieved social class
position.

 Upward mobility – Movement from a lower social class position to a higher one.

 Downward mobility – Movement from a higher social class position to a lower one.

INEQUALITY

 What are some indicators of inequality in the U.S.?

 How is inequality related to ascribed characteristics like race and gender?

 To what extent is inequality increasing in the U.S. and across the globe?

In 2017, Yahoo announced that Marissa Mayer, the CEO, would leave the company once its

acquisition by Verizon was finalized. Mayer received a $23 million severance payment; the full value of her

severance pay and stock options was nearly $260 million. That’s not a bad sum of money for being fired.

While the amount of money Mayer received

for leaving the company may seem startling, it’s not

even close to the highest severance payments in

recent history. Consider some of these final paydays:

Jack Welch, CEO of General Electric, received over

$400 million; Lee Raymond, CEO of Exxon Mobile,

received over $300 million; William McGuire, CEO

of UnitedHealth Group, received nearly $300

million; and Edward Whitacre, CEO of AT&T,

received well over $200 million.

And consider the more recent case of Robert Marcus. He became CEO of Time Warner at the

beginning of 2014. A few months later he negotiated himself out of a job by agreeing to sell the company to

Charter Communications. For those few months he worked as CEO of Time Warner, Marcus walked away

with a severance package of over $90 million.

It might be hard to grasp what these figures actually mean. Most of us are probably more

comfortable talking about hundreds of dollars than hundreds of millions of dollars. Here’s a little context:

The median household income in the United States in 2015 was $56,516.16 To make as much money as

Robert Marcus made in just few months as CEO of Time Warner, a typical household in the U.S. would

Marissa Mayer, former CEO of Yahoo. (Source)

Social Class, Inequality, & Poverty

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have to work about 1,600 years. It would take over 7,000 years for the typical household to earn the

severance payment given to former General Electric CEO Jack Welch.

What do you think of these numbers? They’re just one measure of the very large and increasing

class inequality in the United States. In this section we consider some common indicators of social class

inequality as a way to more fully understand the growing gap between the poor and the rich. The disparities

between CEO pay and the incomes of average workers are a good place to begin because they highlight how

large the gulf has gotten between those at the top of the economic ladder and the rest of us.

Figure 5: CEO Pay and Worker Pay, 1978-2014

Source: Economic Policy Institute
17

Consider Figure 5, which shows how much CEO pay has increased in the past thirty years compared

to the increase in average worker salaries. Since 1987, the average CEO has seen his (and the CEO is

usually a he) compensation increase 1,000%. The compensation of an average worker has barely increased

at all. In 1987, the average yearly salary was a little more than $18,000.18 If a worker making that salary in

1987 enjoyed the 1,000% increase that the typical CEO has enjoyed, the worker would make $1.8 million

dollars a year now. Instead, the typical worker today makes just under $50,000, the equivalent of about

$24,000 in 1987. When you adjust for inflation, there has been hardly any growth in worker pay.

0.00%

200.00%

400.00%

600.00%

800.00%

1000.00%

1200.00%

1400.00%

1
9

7
8

1
9

8
1

1
9

8
4

1
9

8
7

1
9

9
0

1
9

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1

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0

1
4

Percent change in
CEO compensation,

stock prices, and
typical worker
compensation

Year

CEO Pay v. Worker Pay

CEO pay

Typical worker pay

Social Class, Inequality, & Poverty

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The grow ing gap betw een the poor and t he rich

Comparing the compensation of CEOs to typical workers highlights some of the extreme levels of

inequality that exist in the United States. We can gain further insight into the drastic levels of inequality if

we refer to some other patterns.

Let’s begin with income inequality. We often hear that the gap between the rich and the poor is

growing every year. This becomes readily apparent when we look at the change in income levels over time.

As Figure 6 suggests, for the overwhelming majority of Americans income has been more or less stagnant

for nearly forty years. While the top 1% of the population has enjoyed a huge increase in their incomes, and

the top 5% to 20% have seen modest income gains, the income of the bottom 80% of the population has

remained virtually the same. Since about 1979, only the privileged classes in the United States (like the

CEOs in Figure 5) have experienced income growth. For the majority classes and lower classes, wages

today are more or less equal to what they were forty years ago.19

Figure 6: Average Pretax U.S. Income, 1979-2007

Source: Wikimedia Commons

Do you think this income inequality translates into increased wealth inequality as well? If you

recall, wealth is a measure of the total worth of everything someone owns. When we talk about the rich

getting richer and everyone else getting poorer, we’re not only talking about income inequality; wealth

inequality is just as important.

https://commons.wikimedia.org/wiki/File:USPretaxIncomeByIncomeLevel.PNG

Social Class, Inequality, & Poverty

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It’s probably not too surprising to learn that wealth inequality is closely associated with income

inequality, as Figure 7 suggests. Although the graph only dates back 30 years, it depicts the enormous gap

between the rich and rest of society. Notice how the shapes of the lines in this graph mirror the lines in the

income graph (Figure 6). Once again, we see that the privileged classes are accumulating most of the wealth

in the country while the financial gains for those in the majority and lower classes are modest at best.

Figure 7: Family Wealth in the United States, 1989-2013

Source: Congressional Budget Office

The gap between the rich and the rest of us, or the haves and have-nots, is even more evident when

we also consider race. As Figure 8 illustrates, the amount of accumulated wealth we have is strongly

correlated with race and ethnicity. The wealth of Whites dwarfs the wealth of Blacks and Hispanics.

Remember, when we discuss wealth we’re not focusing on income earned from employment or investments.

We’re talking about the amount of money that someone has accumulated over time from various sources.

Two individuals can have the same yearly income but drastically different levels of wealth. The more

wealth you have, the more opportunities you have to increase wealth, pass that wealth on to your children,

and be protected against life events that might create enduring financial hardships. This is a crucial point to

recognize when we are trying to understand how social inequality continues to rise: having some wealth

makes it easier to get more of it.

https://www.cbo.gov/publication/51846

Social Class, Inequality, & Poverty

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Figure 8: Average Family Wealth by Race/Ethnicity, 2016

Source: Urban Institute, Survey of Consumer Finances 1983–2016

Many social scientists argue that inequalities in wealth are the most significant factor in the

reproduction of inequality, particularly in regard to race and ethnicity.20 Sociologist Thomas Shapiro spent

the past two decades documenting the wealth gap between Blacks and Whites. His research demonstrates

quite clearly that many of the problems that Blacks face—high rates of poverty, mass incarceration, and

joblessness—can be directly connected to the great wealth gaps between Black and White individuals. 21

Shapiro details the cumulative

advantages—built up benefits and resources—

that allow people to increase their wealth. On

average, White individuals have been able to

pass much more money to their children than

Blacks have because they have not been saddled

with the various types of discrimination,

particularly in federal housing policies, that

have severely hampered Blacks’ opportunities to

build wealth. Without being systematically

oppressed by slavery, Jim Crow segregation,

and institutional discrimination, Whites have

been able to increase their family wealth generation after generation, whereas most Black families have

never been able to anchor themselves financially or have done so only very recently.

$919,336

$191,727
$139,523

White (Not of Hispanic
Origin)

Hispanic Origin Black

Wealth Inequality by Race/Ethnicity, 2016

Shoe-shine worker and client in Washington, D.C. (Source)

http://apps.urban.org/features/wealth-inequality-charts/

Social Class, Inequality, & Poverty

Page 20

This whole process of cumulative advantages is largely invisible to Whites who benefit from it.

Most Whites cling to the notion of the American Dream and see their success as largely the product of their

own doing. Even those who have undeniably benefited financially from their relatives (or from their

ascribed social position) remain convinced that their social-class status is wholly achieved. This belief that

personal effort and sound individual choices can overcome generations of structural inequality further

contributes to the racial wealth gap, the difference in accumulated wealth between different races and

ethnicities. As long as policymakers embrace the idea that social class is achieved, they will enact policies

that reflect this belief and ignore the external factors that produce and perpetuate social inequality.

Proposals to slash federal housing vouchers, food assistance and Medicaid for low-income individuals are

indicative of this type of thinking.22

This inability to see, much less recognize, the existence and persistence of structural inequalities can

also be demonstrated when we add more characteristics to the mix. For example, when we look at the

intersecting effects of race, gender, education, and income, we see quite clearly that not everyone enjoys the

same path to financial success. As much as we may want to tout our own individual efforts and

accomplishments, there is no denying that some individuals are hampered by the persistence of racism and

sexism in American society.

Table 4: Median Earnings (in 2015 Dollars) of Full-Time, Year-Round Workers Ages 25-34, by

Race/Ethnicity, Gender, and Education Level, 2013-2015

Race/Ethnicity Gender Less

than HS

Diploma

High

School

Diploma

Some

College,

No

Degree

Associate

Degree

Bachelor’s

Degree

Advanced

Degree

Asian Female $21,900 $25,900 $32,800 $32,200 $52,500 $66,400

Male $26,500 $30,500 $35,600 $36,200 $61,900 $80,200

Black Female $21,100 $25,400 $27,500 $31,200 $41,200 $50,900

Male $26,700 $27,800 $35,300 $36,500 $48,500 $52,600

Hispanic Female $21,000 $26,400 $30,100 $29,500 $44,800 $53,700

Male $25,200 $31,100 $36,300 $41,400 $50,500 $61,700

White Female $21,300 $27,400 $31,100 $33,200 $46,000 $55,500

Male $31,900 $36,700 $40,800 $45,000 $56,500 $66,900

All Female $21,100 $26,900 $30,500 $32,000 $45,800 $55,800

Male $26,400 $33,400 $38,400 $42,600 $55,600 $67,400
Source: Education Pays 2016: The Benefits of Higher Education for Individuals and Society23

Table 4 should hit close to home for many of you reading this chapter. Focusing on those aged 25-

34, this table shows how income is affected by gender, race, and education. You don’t have to study the

table very long to see some telling trends. In every category of educational attainment, men make

significantly more than women. Race also has an effect, with Blacks and Hispanics almost always making

less than Whites and Asians, even when they have the same level of education.

Social Class, Inequality, & Poverty

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Probably the most obvious fact from Table 4 is the importance of education. As someone completes

more education, their income level increases. This correlation is true for every gender and race; however,

access to higher education is not evenly distributed. Race and class play a large role in determining who

attends and who graduates from college, as well as the type of college they attend. The higher you are in the

social class structure, the more likely it is that you will attend and graduate from college. When we add race

and ethnicity to the mix, we also see that students of color are more likely than their White peers to attend

community colleges or for-profit colleges.24

You should see a pattern

developing that helps explain the

continuation of inequality. Those of

us who have ascribed characteristics

that are not as advantageous as

others (such as being born into a

lower social class, being a person of

color, or being a woman) are likely

to face more structural obstacles

than those who have more

privileged ascribed characteristics.

Although many of us have faith in

the idea of meritocracy, or a

system where personal

responsibility and individual effort are the sole determinants of success, decades of research make it clear

that some individuals have an easier path to financial success than others. In trying to understand social

class inequality in America, it’s imperative that we consider how ascribed social class, race, and gender

propel some individuals forward while holding others back.

U.S. ine quality in global c ontext

Now that you have a better understanding of inequality in the United States, you may be wondering

how we stack up against other countries. Social scientists use a statistical measure called the GINI index to

compare inequality across countries. The GINI index looks at how family income is distributed in a country.

If everyone in a country had the same income and there was total equality, the GINI score would be 0. If

one person in the country had all of the income, it would cause total inequality and the GINI score would be

1. No country actually has a score of 0 or 1, but countries that have less inequality are closer to 0 and

countries that have a lot of inequality are closer to 1.

Among the 31 most developed nations in the world, the United States has the second-highest GINI

index, behind only Chile. This ranking is based on after-tax income, not before-tax calculations. In most

countries, the tax structure flattens out inequality and brings down the GINI index by taxing affluent

Graduation ceremony, University of Maryland. (Source)

Social Class, Inequality, & Poverty

Page 22

individuals at significantly higher rates than the lower or middle classes. In fact, a number of countries rank

quite a bit higher in inequality than the United States before taxes are taken into account. But because those

countries have tax policies that are more favorable to the poor than the rich, their GINI index is lowered

more significantly by taxes than it is in the U.S.25

As drastic as inequality is in the U.S., it is nothing compared to the inequality that exists in the global

context. According to a report from Oxfam International, global levels of class inequality have reached

astounding levels:26

 The world’s 8 richest men have the same amount of wealth as the bottom 50% of the world’s

population.

 The richest 1% of the world’s population owns more wealth than the rest of the 99%

combined.

 The incomes of the poorest 10% increased by less than $3 a year between 1988 and 2011. During

this same period, the incomes of the richest 1% increased by 182 times.

 7 out of 10 people live in a country that has seen a rise in inequality in the last 30 years.

 Each of the 100 richest CEOs earns as much in a year as 10,000 people working in a garment

factory in Bangladesh.

By all measures, these global

inequalities are increasing every year. In

fact, most estimates suggest that within

the next 25 years, the world may see its

first trillionaire. But as the wealth of the

richest 1% increases to stratospheric

levels, the world’s poor continue to

suffer from malnutrition and starvation,

lack of access to clean water, exposure to

sewage and wastewater, illiteracy, poor

housing, unsafe working conditions, and

shortage of health care providers and

supplies. Poverty is the last topic of this

chapter but in many ways it is the most

important for all of us, no matter our

social class, to acknowledge and address. As former South African prisoner and President Nelson Mandela

once said, “As long as poverty, injustice, and gross inequality exist in our world, none of us can truly rest.”

Dharavi Slum, Mumbai, India. (Source)

https://en.wikipedia.org/wiki/Dharavi#/media/File:Dharavi_Slum_in_Mumbai

Social Class, Inequality, & Poverty

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Review sheet: Inequality

Key Points

 Median household income in the U.S. in 2015 was $56,516.

 The gap between the very wealthy and the rest of the country continues to grow each year.

 The income of most workers has remained relatively stagnant while the pay of CEO and others in the

top 1% has skyrocketed. Since 1987, the average CEO has seen his (the CEO is usually a he)

compensation increase 1,000%.

 The racial wealth gap continues to increase, with Whites on average having much more wealth than

other racial groups.

 White individuals have been able to pass much more money onto their heirs than Black have because

they have not been saddled with various types of discrimination.

 In every category of educational attainment, men make significantly more than women, and Whites
generally make more than people of color.

 Global inequality is also increasing at an alarming rate, as more wealth is in the hands of fewer
individuals. The richest 1% of the world’s population owns more wealth than the rest of the 99%

combined.

 Among the 31 most developed nations in the world, the United States has the second-highest GINI
index, behind only Chile (a high GINI index represents greater inequality).

Key People

 Thomas Shapiro

Key Terms

 Cumulative advantages – Advantages that are built up over generations and contribute to social class
inequality.

 Racial wealth gap – Drastic and growing difference in wealth accumulation between Black and White
individuals.

 Meritocracy – Belief that personal responsibility and individual effort are the sole determinants of
success

 GINI Index – Statistical measure used to compare inequality across countries.

Social Class, Inequality, & Poverty

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POVERTY AND HOMELESSNESS

 What is poverty and how is it measured?

 Who is at risk of poverty?

 Who are the working poor?

 How has the homeless population changed in recent years?

 What factors increase the risk of homelessness?

Desmond Spencer is a 39-year-old resident of Beaverton, Alabama. He dropped out of school at 14

and eventually completed his GED. Before age 20, Desmond went to prison for burglary. When he was

released from prison his life improved somewhat when he found a steady job as a roofer. But he suffered a

knee injury when he fell off a roof on a job. He never got medical attention for his injury because he didn’t

have health insurance. He eventually lost his job during a difficult period in the economy. Desperate and

unable to find steady work, Desmond struggled with the decision to apply for federal disability benefits.

Several people close to him collect disability benefits, including his stepfather (who broke his back in a car

accident) and a cousin (who has bipolar disorder and receives $701 per month). Desmond would prefer to

work but was turned down for jobs at an upholstery factory and a horse-trailer shop. He failed a math exam

that would have allowed him to enroll at a community college to take a welding class. Desmond makes

$425 a month from a friend who pays him to take care of his horses. Other than that, he relies on money

from his parents and their disability support checks. His mother finally convinced him to call the Social

Security office and apply for disability benefits. The question “Is this a permanent disability?” used to

screen applicants stung him, but he answered yes.

The Washington Post article featuring Desmond reports that 13 million working-age adults receive

federal disability payments, an increase from 7.7 million in 1996. Rural America, including where Desmond

lives, has experienced the fastest increase in disability rates.27

Desmond’s story is about poverty in America. Many of us have a specific image in mind when we

think of people who are poor, but the lives of poor people are remarkably diverse. In the final section of the

chapter we explore the persistent social problem of poverty and one of its most visible forms: homelessness.

What is p overty?

There are various ways to define, and to think about, poverty.28 One is to consider the basic

necessities of life, such as food, shelter, and clothing. People without these necessities would be considered

poor. This is absolute poverty. The U.S. Census Bureau takes an absolute approach to measuring poverty.

The Census uses poverty thresholds to estimate the number of Americans in poverty each year. For

Social Class, Inequality, & Poverty

Page 25

example, the official poverty threshold in 2018 was $25,100 for a family of two adults and two

children.29 This poverty threshold (also known as the poverty line) establishes the minimum income level

that the federal government says is required to buy the basic necessities of life. According to the Census

Bureau, in 2017 there were 39.7 million people in poverty, which amounts to an official poverty rate of

12.3%.30

Another way to calculate poverty is to look at relative poverty. This measure takes into account the

relative economic status of people in a society by looking at how income is distributed; those in the lowest

income brackets would be considered poor in comparison to others in their society. Mark Rank and Thomas

Hirschl focus on the likelihood of experiencing relative poverty between the ages of 25 and 60.31 They find

that those who are younger (ages 25-34), non-White, female, not married, with 12 years or less of education,

or who have a work disability are significantly more likely to encounter poverty.

What does poverty mean to those who experience it? Being poor means having to compromise and

make difficult choices about food, shelter, clothing, health care, transportation, and other needs. It means

sometimes choosing between putting food on the table and paying the heating bill to stay warm. It can mean

being stuck in a high-crime neighborhood with low-quality schools. It often results in poor physical and

mental health outcomes. “Poverty,” according to the writer J. K. Rowling, “entails fear and stress and

sometimes depression; it means a thousand petty humiliations and hardships.”32

Figure 9: U.S. Poverty Levels, 1959-2013

Source: Wikimedia Commons

https://commons.wikimedia.org/wiki/File:US_poverty_rate_timeline.gif

Social Class, Inequality, & Poverty

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Characteristics of the poor

Poverty is not an equally shared experience. In the U.S., several characteristics place some groups at

more risk of poverty than others:

1. Household type – If you are in a household headed by a single mother, you are much more likely to be

poor than those in married-couple or single-father families.

2. Education – There is a high rate of poverty among adults who have not completed high school. People

without high school degrees are more than six times as likely to be poor as those who have completed

college.

3. Paid work – Those with no income are substantially more likely to be poor than are those who earn even

low incomes. The risk of poverty falls as someone’s attachment to the labor market increases. Put simply,

working for pay (especially high pay) is a poverty-prevention tool.33

4. Disability status – For people aged 18 to 64 with a disability, the 2017 poverty rate was 24.9%, which

amounted to 3.8 million people living in poverty.34 The unemployment rate is high for individuals with

disabilities. Even if their disabilities don’t prevent them from working, they may face transportation

challenges in getting to work or encounter employers who are hesitant to hire people with disabilities.35

5. Race – The poverty rate is approximately two times higher for African-Americans, Hispanics, and Native

Americans than it is for Whites and Asian-Americans.36 One factor in the racial poverty gap is

unemployment; the groups with higher poverty rates all have higher unemployment rates than Whites and

Asian-Americans as well.

6. Region – The South has the highest poverty rate, while the Northeast has the lowest. However,

differences in poverty rates between regions are narrowing.37

7. Concentrated neighborhood poverty – High-poverty neighborhoods are Census tracts where at least

40% of the population is poor. This concentration of poverty is significant in light of the various social

problems that exist in high-poverty areas (for instance, crime, underfunded public schools with high dropout

rates, social networks that lack connections to good jobs). Growing income inequality, and the income

segregation in neighborhoods that accompanies it as people of different classes are less likely to live in the

same neighborhood, has exacerbated concentrated poverty.38 Research shows that when White families live

in a poor neighborhood, it is typically for a single generation; their children are able to move to a higher-

income area. In contrast, neighborhood poverty is most commonly multigenerational for African-American

families.39

Social Class, Inequality, & Poverty

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8. Child poverty – In 2017, 12.8 million children (those under 18 years old) lived in poverty; children

represented 32.3% of all people in poverty.40 Poverty levels among children have remained high since the

early 1970s. There has been a racial disparity in child poverty rates for decades, with much higher poverty

rates among African-American and Hispanic children than for White and Asian-American children.41

Figure 10: U.S. Poverty Rates by County

(Source: Wikimedia Commons)

The w or king poor and t he jobless poor

Maya Warren is one of millions of Americans who are working poor. She works for a company

named Maxim as a home health aide providing care to the elderly, earning about $300 a week. Late in her

first pregnancy, she took a second job as an Uber driver. The baby’s father does not have steady income.

When she went into labor the doctor recommended a Caesarean section. This is major surgery that calls for

12 weeks of rest. However, six days after giving birth, she had no choice but to go back to work driving for

Uber.

Maya lives with her mother and is grateful for her support. Without her mother’s help, she thinks

she would be homeless. Maxim doesn’t provide paid family leave to home health aides. The federal Family

and Medical Leave Act (FMLA) allows workers to take up to 12 weeks of leave after a birth, but it is unpaid

leave. And FMLA only applies to employees who have worked at least one full year for their employer, and

only if their employer has more than 50 employees. “You don’t work, you don’t get paid,” Warren says,

summing up her situation and the reality of many low-income parents who don’t have the kinds of jobs that

come with paid family leave.42

https://commons.wikimedia.org/wiki/File:US_Poverty_Rates-legend.svg

Social Class, Inequality, & Poverty

Page 28

Stereotypical conceptions of poor people are that they are lazy and don’t want to work. But millions

of poor people do work. Approximately 10.5 million individuals can be categorized as working poor,

defined by the Bureau of Labor Statistics (BLS) as people who spent at least 27 weeks (half of the last year)

in the labor force but whose incomes still fell below the official poverty level.43 A BLS report reveals the

following demographic characteristics of the working poor:

 More women than men are classified as working poor.

 Blacks and Hispanics are more than twice as likely as Whites and Asians to be working poor.

 Families headed by women are more likely to be poor than those headed by men.

 Families with children under 18 are more likely to be working poor than those without children.

 Married-couple families are less likely than families headed by a single parent to be living

below the poverty level.

 Full-time workers are less likely than part-time workers to be working poor.

 People with higher levels of education are less likely to be working poor. More education means

better access to higher-paying jobs.

 Low earnings and periods of unemployment are key factors in falling below the poverty line.

Service occupations account for nearly 40% of the working poor. Fast-food employees are a good

example of workers who struggle in low-wage service jobs. They are featured in Katherine Newman’s book

No Shame in My Game: The Working Poor in the Inner City:44

Nadine comes from a poor family and has not yet finished high school. Her father died

during her childhood and her mother relies on public assistance. She dreams of leaving her

neighborhood and describes the building where she lives as disgusting and roach-infested.

Larry struggles to finish high school while he works, but is determined to do so. He can’t

remember a time when his mother worked. He hopes that one day he will be able to attend

college: “The only way you’ll be able to survive life is to get a good education.”

Roberta is a manager with a steady salary. She can make ends meet but still lives paycheck to

paycheck. She knows that an emergency or an unexpected bill will put her immediately into

major financial distress. She doesn’t make enough to save and wonders if she’ll ever be able

to retire.

Newman describes working poor people like Nadine, Larry, and Roberta as one paycheck away from

welfare. The working poor are constantly on the edge of getting fired (often due to unreliable transportation

or childcare for their children) or evicted. Many suffer from inadequate housing, poor diet, bad schools, and

lack of medical attention. It is a life of being insecure and vulnerable.

Social Class, Inequality, & Poverty

Page 29

As Newman points out, the U.S. economy has drastically changed over the past several decades,

with a sharp decline in high-paying jobs and a simultaneous surge in low-paying jobs. The economy now

favors the well-educated, and high-paying jobs are especially hard for those with lower levels of education

to get.

The transformation of the economy has hurt people in a variety of places. William Julius Wilson

addresses the decrease in job opportunities for people in urban areas, especially in the Northeast and

Midwest.45 Think of Philadelphia, Chicago, and Detroit. A shift away from manufacturing in these and

other cites resulted in a decline in high-paying jobs for people with less education. New jobs were more

often located in suburban locations, creating a challenge for city residents who do not own cars and rely on

public transportation. The decline of manufacturing, plus lack of access to employment in the suburbs, led

to more joblessness. These changes were especially damaging for African-Americans in urban areas, since

they often found it difficult to move to the suburbs and lacked college degrees that might allow them to

pursue high-skilled jobs in cities. The rise of joblessness was also a factor in the deterioration of

neighborhoods: Families with more resources were able to move, leaving behind poor families who often

struggled to maintain their homes and yards.

In $2.00 a Day: Living on Almost

Nothing in America, Kathryn Edin and H.

Luke Shaefer shed light on the hardships of

living in poverty in places such as

Mississippi and Kentucky.46 The decline of

coal mining in eastern Kentucky and the

mechanization of farming in the Mississippi

Delta are part of the reason for high rates of

joblessness in these places. Imagine poverty

so extreme that you would sell your

children’s Social Security numbers for cash

(so people can use those numbers for tax

benefits). Or consider Jessica Compton,

who sells her plasma several times a month

to cover rent. The $30 she receives each

time is the only money to count on now that her husband, Travis, no longer gets shifts to work at

McDonald’s. They are three months behind on rent and worried they may be evicted. Jessica and Travis are

barely able to support themselves and their two children.

Homelessness

Dasani spent three years of her life at a homeless shelter in Brooklyn. The shelter’s problems

included spoiled food, mold, lead paint, bedbugs, roaches, discarded crack pipes, and sexual misconduct by

There’s some protection from the rain but little from wind and cold,

making for a difficult wait for transportation to work or school.

Source: Photo provided by the authors

Social Class, Inequality, & Poverty

Page 30

employees. This 11-year-old is one of more than 20,000 homeless children in New York City. One room

was the main living space for Dasani, her parents, and seven siblings, including a baby sister for whom she

is often responsible for feeding, changing, and caretaking. Her parents are unemployed and suffer from drug

addiction. She does her best at school, admires her teaches, and made the honor roll, but is occasionally

teased for where she lives and the clothes she wears. A fight with a classmate leads to a week of suspension.

Prior to the shelter, Dasani and her family lived in a duplex and before that, an apartment. They

were dependent on rent subsidies that eventually expired. Rent kept going up; one-bedroom apartments cost

$1,300 a month. The demand for public housing far exceeds the supply. Families like Dasani’s are desperate

for affordable housing at a time when nearby condominiums sell for $1.5 million and brownstone homes for

more than $2 million.

“If I could grant you three wishes, what would they be?” a school counselor asked Dasani. She

wished for a home, a lot of money, and three more wishes. One wish came true when a space finally opened

at another shelter. This shelter offers an apartment with a kitchen, a full bathroom, and two bedrooms. The

mattresses are in good condition, a welcome change from broken mattresses with exposed coils.

Dasani’s experience with homelessness provides

an introduction to one of America’s most devastating

social problems.47 Someone is homeless if they lack a

fixed, regular, and adequate nighttime residence.48 The

homeless population in the United States is established by

what is known as the point-in-time count. In late January,

communities across the country count the number of

homeless people living in emergency shelters, transitional

housing, or on the street. From this data collection, we

know that in 2017, more than 500,000 people experienced

homelessness in the U.S. Over one-fifth (114,829) of

those were children.

Single individuals make up 67% of the homeless

population; the remaining 33% are families. When we

focus on individuals experiencing homelessness on their

own, without a family, approximately 60% are male. But

when we look at the characteristics of homeless families,

approximately 60% are headed by a woman.

In 2017, the sheltered homeless (people staying in emergency shelters, transitional housing

programs, or safe havens) accounted for 65% of the homeless population, with the remaining 35%

Migrant Mother by Dorothea Lange (1936).
Source: Wikipedia Commons

https://commons.wikimedia.org/wiki/File:Lange-MigrantMother02 #/media/File:Lange-MigrantMother02

Social Class, Inequality, & Poverty

Page 31

experiencing unsheltered homelessness (their primary nighttime residence is a public or private place not

designated for, or ordinarily used as, a regular sleeping space, such as the streets, vehicles, or parks).

Approximately 9% (or 40,056) of people experiencing homelessness are military veterans.

Approximately 24% (or 86,962 people) of the homeless population experiences chronic

homelessness. A chronically homeless individual is someone with a disability who has a) been continuously

homeless for a year or more or b) has experienced at least four episodes of homelessness in the past three

years where the combined length of time of the homeless episodes is at least 12 months. Disabilities include

substance use disorders, serious mental illness, developmental disabilities, posttraumatic stress disorder,

cognitive impairments resulting from a brain injury, or chronic physical illness or disability.

Keep in mind the challenging task of counting the homeless population. Suburban and rural areas

are difficult to cover. It’s hard to collect information on people sleeping in makeshift locations, such as

vacant lots and railway yards. These counts leave out people in marginal living situations, such as

prostitutes who stay in hotels paid for by clients.49 Young people may try to hide their homelessness due to

embarrassment, and may be reluctant to report they are homeless when they encounter adults doing

counts.50 For these reasons, point-in-time counts are imprecise and may undercount the homeless

population.51

Figure 11: Number of Homeless Individuals in the U.S., 2007-2017

Source: Data from U.S. Department of Housing and Urban Development 2017

647,258

639,784

630,227

637,077

623,788 621,553

590,364

576,450

564,708

549,928
553,742

500,000

520,000

540,000

560,000

580,000

600,000

620,000

640,000

660,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

People Experiencing Homelessness

Social Class, Inequality, & Poverty

Page 32

The overall homeless population decreased for the past several years as the economy improved after

the Great Recession that began in December 2007 and officially ended in June 2009. In 2007, the homeless

population was 647,258. It wasn’t until 2013, several years after the end of the recession, that the number of

homeless individuals fell below 600,000. We have yet to see if the slight increase between 2016 and 2017 is

part of a longer-term trend.

Martha Burt identifies three types of factors that create the conditions, such as extreme poverty, that

increase the risk of homelessness.52 The first type is structural factors such as changes in the housing

market, employment opportunities, criminal justice policies, and institutional support for poor people and

people with disabilities. The second type is individual characteristics such as disabilities, mental illness,

addiction, and a felony record. The third type involves public policy. Effective policies can prevent

homelessness and reduce the impact of structural and personal factors that place people at risk of

homelessness. “It would not be a bad policy decision to provide every household that has a worst-case

housing need with a rent subsidy for as long as possible,” she says. Recently, policy approaches have shifted

away from emergency services for the homeless to a broader focus on preventing and reducing

homelessness. Strategies increasingly focus on permanent housing solutions.

The i mportance o f affordable h ous ing

Arleen Beale and her family have no stable housing. They have lived in a homeless shelter. They

have lived in an apartment where they couldn’t count on having running water. And they have lived in an

apartment complex described as a haven for drug dealers. They were evicted on multiple occasions.

Arleen’s son Jori attended five different schools during seventh and eighth grades. Their most recent home,

the bottom unit of a duplex with a rent of $550 a month, was better than some of the places they lived. But

the rent used up nearly 90% of her welfare check. A long time ago, at age 19, Arleen rented a subsidized

apartment for $137 a month. But she left public housing to move in with a friend. She didn’t realize how

hard it would be to get back into public housing; the waiting list is long and moves slowly. Looking back,

she regrets leaving a place where she imagines she could still be. Unable to keep up with her current rent,

she is a few days away from another eviction.

As Matthew Desmond explains in his award-winning book, Evicted: Poverty and Profit in The

American City, the majority of poor renting families like Arleen’s spend more than half their income on

housing; nevertheless, millions are evicted annually.53 In Milwaukee, where Desmond conducted his

research, landlords legally evict roughly 16,000 adults and children each year. A high percentage of

Milwaukee’s evicted tenants are Black women. As Desmond points out, incarceration is a significant force

in the life of poor Black men, while eviction is a significant factor in the life of poor Black women: “Poor

Black men were locked up. Poor Black women were locked out.”54

Social Class, Inequality, & Poverty

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The importance of having an affordable place to live cannot be overstated. If someone is asked to

identify the main necessities of life, a likely response is food, shelter, and clothing. As Desmond poignantly

explains in Evicted, “Without stable shelter, everything else falls apart.” A stable home supports our

psychological well-being, encourages social relationships, and provides a consistent educational setting for

children. When people are secure in a home, our communities are made stronger.

Desmond believes that housing is not just a need but a right. He recommends expanding the

Housing Choice Voucher Program. This is a federal program for low-income families (and the elderly and

disabled) to afford decent and safe housing in the private market, including single-family homes,

townhouses, and apartments. Too many poor families are forced to spend most of their income on housing.

Desmond calls for a universal housing voucher program for which every family below a certain income

level would be eligible. Millions of poor families would then be able to seek housing in the private market.

More families in stable homes would mean far less government money spent on the costs of homelessness.

Desmond’s arguments reflect

many of the larger themes we have

addressed throughout this chapter. We

have shown how our social class

standing is not just a matter of

individual efforts and initiatives; there

are larger structural and institutional

forces that influence our class

positions and are responsible for the

growing inequality in the U.S. and

around the world. If we address some

of these structural and institutional

forces, we have a greater likelihood of

reducing social class inequality and

poverty.

The popular conception of social class in America is that there is a tried and true formula: hard work

translates to success, which leads to upward mobility. If you work hard and stay on track you can achieve

the American Dream. But the reality of social class is much more complicated. There are drastic levels of

income and wealth inequality in America.

If we think of ourselves as contestants in a race, those who have more wealth have a head start in the

race. We like to think that everyone is running in a fair race, but those with built-in advantages (high

income, better schools, good health care, easy access to nutritional food, secure housing, reliable

transportation) have a significantly better chance of succeeding in the race than those like Alex Russo or

Desmond Spencer or Arleen Beale’s son Jori. It isn’t that those who are disadvantaged shouldn’t bother to

Possessions placed on the sidewalk after an eviction. (Source)

Social Class, Inequality, & Poverty

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compete or that they have no chance to succeed. But we need to be honest about social class and recognize

that it greatly enables some and severely constrains others.

Review Sheet: Poverty

Key Points

 There are different ways to measure poverty; definitions can focus on the necessities of

life, the relative economic status of people in a society, or the essence of being poor

(such as the challenges and outcomes of being poor).

 The official poverty threshold in 2018 was $25,100 for a family of two adults and two

children. According to the Census Bureau, in 2017 there were 39.7 million people in

poverty; 12.8 million children lived in poverty.

 Poverty is not an equally shared experience. Type of household, level of education,

disability status, and race are among the characteristics that put some groups at higher

risk of poverty than others.

 More than 10 million Americans can be categorized as working poor. More women than

men are classified as working poor. Blacks and Hispanics are more than twice as likely

as Whites and Asians to be working poor. Low earnings and periods of unemployment

are key factors in workers falling below the poverty line.

 More than 500,000 people currently experience homelessness in the United States. In

2017, over one-fifth of people experiencing homelessness was children.

 Policy approaches have shifted away from emergency services to a broader focus on

preventing and reducing homelessness. Strategies increasingly focus on permanent

housing solutions.

Key People

 Mark Rank

 Thomas Hirschl

 Katherine Newman

 Kathryn Edin and H. Luke Shaefer

 William Julius Wilson

 Martha Burt

 Matthew Desmond

Key Terms

 Absolute poverty – Poverty measure that considers the basic necessities of life such as

food, shelter, and clothing; those without these necessities are considered

poor.

 Relative poverty – Poverty measure that takes into account the relative economic status

of people in a society by looking at how income is distributed.

 Poverty threshold – Establishes minimum income level required to obtain the

necessities of life.

Social Class, Inequality, & Poverty

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 High-poverty neighborhoods – Census tracts where at least 40% of the population is

poor.

 Working poor – People who spent at least 27 weeks in the labor force but whose

incomes still fell below the official poverty level.

 Homeless – Person who lacks a fixed, regular, and adequate nighttime residence.

 Point-in-time counts – 1-night estimates of sheltered and unsheltered homeless

populations; occur during the last week of January each year.

 Chronically homeless individual – Person with a disability who has been continuously

homeless for 1 year or more or has experienced at least four episodes of homelessness in

the last 3 years where the combined length of homelessness in those occasions is at least

12 months.

 Sheltered homeless – People staying in emergency shelters, transitional housing

programs, or safe havens.

 Unsheltered homeless – People whose primary nighttime residence is a public or

private place not designated for, or ordinarily used as, a regular sleeping accommodation

(for example, the streets, vehicles, or parks).

Social Class, Inequality, & Poverty

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49 Wakin, Michele. 2014. Otherwise Homeless: Vehicle Living and the Culture of Homelessness. Boulder, CO:

FirstForumPress.
50 Watson, Bernadine. 2013. “The number of homeless youth is growing, but funding to help them is not” The Washington

Post. Retrieved at: https://www.washingtonpost.com/blogs/she-the-people/wp/2013/12/20/the-number-of-homeless-youth-

is-growing-but-funding-to-help-them-is-not/?utm_term=.3a407312f6fc See also Fernandes-Alcantara, Adrienne L. 2013.

“Runaway and Homeless Youth: Demographics and Programs” Retrieved at:

http://www.nchcw.org/uploads/7/5/3/3/7533556/crs_2013_rhya_history_and_lit_review
51 Burt, Martha R. 2016. “Three Decades of Homelessness.” Pp. 47-66 in Ending Homelessness: Why We Haven’t, How We

Can, Donald W. Burnes and David L. DiLeo, eds. Boulder, CO: Lynne Rienner.
52 Burt, Martha R. 2016. “Three Decades of Homelessness.” Pp. 47-66 in Ending Homelessness: Why We Haven’t, How We

Can, Donald W. Burnes and David L. DiLeo, eds. Boulder, CO: Lynne Rienner.
53 Desmond, Matthew. 2016. Evicted: Poverty and Profit in The American City. New York: Crown Publishers.
54 Desmond, Matthew. 2016. “Forced Out.” The New Yorker. Retrieved at:

http://www.newyorker.com/magazine/2016/02/08/forced-out

Cover Photo Source: Wikimedia Commons

https://www.census.gov/library/publications/2018/demo/p60-263.html

https://www.census.gov/library/publications/2018/demo/p60-263.html

https://www.bls.gov/opub/reports/working-poor/archive/a-profile-of-the-working-poor-2013

https://www.washingtonpost.com/blogs/she-the-people/wp/2013/12/20/the-number-of-homeless-youth-is-growing-but-funding-to-help-them-is-not/?utm_term=.3a407312f6fc

https://www.washingtonpost.com/blogs/she-the-people/wp/2013/12/20/the-number-of-homeless-youth-is-growing-but-funding-to-help-them-is-not/?utm_term=.3a407312f6fc

http://www.nchcw.org/uploads/7/5/3/3/7533556/crs_2013_rhya_history_and_lit_review

http://www.newyorker.com/magazine/2016/02/08/forced-out

https://commons.wikimedia.org/wiki/File:Pittsburgh_Homeless_(4047892941) ​