Lecture Five

Poverty and Inequality in the US: The Working Poor

Increasing Inequality

Between 1979 and 2005, the top 5% of American families saw their real incomes increase by 81%, while the net worth of the bottom 40% of American households fell by half

Ratio of CEO-worker pay: 2005 was 262 to 1 1965 it was 24 to 1

We are all richer…

Share of the Income 2006

Stratification

Social Stratification: hierarchical classification of society’s members based on Resources Power Authority Prestige

Important to understand stratification because: Determines access to resources and rewards in society Life experiences and opportunities

US: Mixed-class System

Even though we believe that we are pure class system, we are a mixed class system both ascribed and achieved characteristics

determine class position

Ascribed: race, gender, immigrant status, geography, sexual orientation

Achieved: education, initiative, determination, intelligence

Opportunity Structure

WealthHigh Income

Good Neighborhood Good Schools

Good JobsAccess to Health Care

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→ → → →

→ → → →

What does social mobility look like? http://www.nytimes.com/packages/html/natio

nal/20050515_CLASS_GRAPHIC/index_01.html

Barriers to Mobility?

Social Exclusion: cut off from mechanisms that allow social mobility in a society Neighborhood/Residential Education Occupation Culture

Poverty: How do we explain it? “As a culture, the United States is not quite sure

about the causes of poverty, and therefore is uncertain about the solutions”

“Culture of Poverty” Individuals are responsible for their own culture and

socializing their children into poverty

“American Anti-Myth” (macro-structural) Poverty is produced by the unequal structures in society Inequalities in opportunity

Poverty

Poverty: Official definition of poverty was developed in 1964 and is based on food consumption as 1/3 of household costs Absolute – physical deprivation Relative – deficiency relative to the population as

a whole

What are the main expenditures for households today?

Who is most likely to be in Poverty? 58% of Americans will live poverty for at least 1 year

1 in 3 will experience extreme poverty for at least one year 27% will experience poverty before age 30

What creates this high risk for Americans? Time – life stages, such as divorce and other unanticipated

events Safety Net – very few social services to help people

through rough stages and Labor Market – not enough good paying jobs

Feminization of Poverty Women are disproportionately represented

among the poor More likely to be in low-pay service jobs Women still make $0.76 for every man’s dollar

42% of female-headed households are in poverty, compared to 9% of two-parent families Children are more likely to live in poverty than

adults – 35% of US poor are children

The Color of Poverty Higher rates of poverty among non-whites

White- 8% Black – 25% Hispanic – 22% American Indian – 25%

Highest rate of poverty is among children in single-parent households headed by Hispanic women – 48% are in poverty

Black/White Wealth Gap

Wealth is the engine of social mobility Location, education, employment

Average white family has a net worth 7 times that of the average Black family This gap has grown since the 1960’s

The wealth gap accounts for many of the racial inequities Racial disparities almost disappear when economic

resources are equal

Working Poor or the Nearly Poor Working Poor: workers in jobs at 27 weeks

of the year that are less secure, low-paying, and deskilled In 2005, 36.8% of the poor worked and 11.4%

worked full-time

Over 5% of the population are ‘working poor,’ but majority are non-white, female, and immigrant

Why so many working poor?

Economic restructuring in the post-industrial society High skill, high tech, high wage jobs

versus Low skill, low tech, low wage jobs

Increasing gap between the rich and poor and growing economic inequality Zero-sum

Welfare to work (1996) pushed many poor (primarily women) into low paying, dead-end jobs