Chapter 7
Social Stratification:
United States and Global
Perspectives
Melanie Hatfield
Soc 100
Wealth
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Your wealth is what you own.
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A house (minus the mortgage), a car (minus the car
loan), and some appliances, furniture, and savings
(minus the credit card debt).
Bill Gates
Wealth
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In the mid-1990s:
The richest 1% of American households owned
nearly 39% of all national wealth.
The richest 10% owned almost 72%.
The poorest 40% of American households
owned .2% of all national wealth.
The bottom 20% had negative net worth.
Patterns of Wealth Inequality
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Wealth inequality has been increasing since the early
1980s.
62% of the increase in national wealth in the 1990s
went to the richest 20%.
The US has surpassed all other highly industrialized
countries in wealth inequality.
Between 50 and 80% of the net worth of American
families now comes from transfers and inheritances.
Policies that seek to redistribute income from the
wealthy to the poor may not get at the root of
economic inequality.
The Distribution of National Income
among Households, US
Global Inequality
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Almost 20% of the world’s population lacks
adequate shelter.
Over 20% lacks safe water.
About 1/3 of the world’s population are without
electricity.
Over 40% lack adequate sanitation.
In the US, there are 626 phone lines for every
1,000 people, but in Cambodia, Congo, and
Afghanistan there is only 1 line per 1,000
people.
Global Inequality
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Annual health expenditures in the US is $2,765 per
person, whereas in Vietnam it’s $3 per person.
The average education expenditure for an American
child is $11,329 per year, compared with $57 in China.
The richest 10% of Americans earn 10,000 times more
than the poorest 10% of Ethiopians.
There are still about 27 million slaves in Mozambique,
Sudan and other African countries.
Inequality
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Global Inequality: Differences in the economic
ranking of countries.
Crossnational variations in internal stratification:
Differences between countries in their
stratification systems.
Measuring Internal Stratification
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The Gini index is the measure of income
inequality. Its value ranges from zero (which
means that every household earn exactly the
same amount of money) to one (which means
that all income is earned by a single household).
Household Income Inequality
Inequality and Development
Foraging Societies
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Societies in which people live by searching for
wild plants and hunting wild animals.
Predominated until about 10,000 years ago.
Inequality, the division of labor, productivity,
and settlement size are very low in such
societies.
Horticultural and Pastoral Societies
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About 12,000 years ago, people established
agricultural settlements based on horticulture
and pastoralism.
These innovations enabled people to produce a
surplus above what they needed for subsistence.
A small number of villagers controlled the
surplus and significant social stratification
emerged.
Agrarian Societies
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People developed plow agriculture about 5,000
years ago and were able to increase production
and surpluses.
Agrarian societies developed religious beliefs
justifying steeper inequality.
People viewed large landowners as “lords.”
If you were born a peasant, you and your
children were likely to remain peasants.
Industrial Societies
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Emerged in Great Britain in the 1780s.
Productivity, the division of labor, and
settlement size increased substantially.
Social inequality was substantial during early
industrialism and declined as the industrial
system matured.
Postindustrial Societies
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Societies in which most workers are employed in the
service sector and computers spur increases in the
division of labor and productivity.
Shortly after World War II, the U.S. became the first
postindustrial society and led the world into an era of
prosperity social equality under the liberal
“Development Project” up to early 1970s
In most of the world, social inequality has been
increasing - and accelerating - since early 1970s., under
the neoliberal “Globalization Project
Marx’s Theory of Stratification
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During the Industrial Revolution industrial owners were eager to
produce more efficiently to earn higher profits, their competition
drove them to ceaseless innovations, higher concentration, and
increasing the absolute & relative exploitation of their labor.
Thus, as the ownership class (bourgeoisie) grew richer and
smaller, the working class (proletariat) grew larger and more
impoverished: modernity led to exponential social inequality.
Marx believed that capitalist growth would inevitably convulse in
national proletarian revolutions, but also would lay, through
“socialized production” the groundwork for a multistate world
“socialist” society, which would eventually lead to no more
classes (or states) and therefore no more class/international
conflict: “communism” - no more social inequalities!
Marx (cont.)
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Marx felt that industrial workers would ultimately
become aware of their exploitation: “class
consciousness”
This would encourage class organizastion and
mobilization in all “advanced” capitalist countries: the
growth of unions & workers’ political parties.
These “vanguard” organizations would eventually win
state power and implement the socialist program: “From
each according to their ability, to each according to their work”
usher a new “communist” world in which there would
be no private wealth: “From each according to their ability, to
each according to their needs.”
Critical Evaluation of Marx’s Conflict Theory
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Why didn’t things work out the way Marx predicted?
They did, up to WWII!
After WWII industrial societies did not polarize into 2
opposed classes engaged in bitter conflict.
While Marx correctly argued that investment in
technology makes it possible for capitalists to earn
high profits, he did not expect investment in
technology to also make it possible for rich country
workers to earn higher wages in the era of imperialism:
The New Deal!
Socialism took root not where industry was most
highly developed, as Marx predicted, but in semiindustrialized countries such as Russia in 1917 and in
the colonial world (after China in 1948)
Functionalist theories of inequality:
The Davis-Moore Thesis
This theory argues that inequality is necessary and desirable:
 Jobs in modern society differ in importance.
 How can the limited number of talented people be
motivated to undergo the long training they need to serve?
 The incentives are money and prestige.
 Social stratification is necessary (or “functional”) because
the prospect of high rewards motivates people to undergo
the sacrifices needed to obtain higher education, etc., in a
meritocratic society.
Critical Evaluation of Functionalism
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3.
The question of which occupations are most
important is not clear-cut. Also, what kind of
“job” is being rich by inheritance?
It stresses how inequality helps society
discover talent, but it ignores the pool of talent
lying undiscovered because of inequality.
It fails to examine how advantages are passed
from generation to generation.
Weber’s Theory of Stratification
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Like the functionalists, Max Weber argued that
the emergence of a classless society is highly
unlikely.
Like Marx, he recognized that under some
circumstances people can act to lower the level
of inequality in society.
Weber recognized that 2 types of groups other
than classes – status groups and parties – have a
bearing on the way society is stratified.
Weber’s Stratification Scheme
Social Mobility
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Peter Blau and Otis Dudley Duncan did work on social
mobility – The American Occupational Structure (1967).
They took on the task of figuring out the relative
importance of inheritance vs. individual merit in
determining one’s place in the stratification system.
Blau and Duncan’s answer was that America is based
mainly on individual achievement heavily influenced by
family & educational factors.
Blau and Duncan’s Model of
Occupational Achievement
Social Mobility
Other research has shown that from WWII-1960s:
 The rate of social mobility for men in the US was high
and that most mobility was upward.
 Mobility within a single generation (intragenerational
mobility) was generally modest.
 Mobility over more than one generation
(intergenerational mobility) could be substantial.
 Most social mobility was the result of change in the
occupational structure (known as structural mobility).
 There was only small differences in rates of social
mobility among the highly industrialized countries.
Group Barriers to Upward Social Mob.
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If you compare people with the same level of
education and similar family backgrounds,
women and members of racial/ethnic minority
groups tend to attain lower status than white
men.
The existence of such group disadvantages
suggests that American society is not as open as
Blau and Duncan made it out to be.
Prestige and Power
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Inequality is not based on money alone but also
on prestige and power.
Members of status groups tend to signal their
rank by means of material and symbolic culture.
They seek to distinguish themselves from others
by taste in fashion, food, music, literature,
manners, and travel, all of which is subject of
mass marketing: cat & mouse
Power
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Power is a second non-economic dimension of
stratification: the ability to have commands obeyed.
Power has a profound impact on the distribution of
opportunities and rewards in society.
Power is exercised formally in politics, and politics can
reshape the class structure by changing laws governing
people’s rights to own property, have access to
opportunities & benefits, etc.
U.S. Politics and the Plight of the Poor
since 1980
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Broadly speaking, most Democrats want government to
play an important role in helping to solve the problem
of poverty.
Most Republicans want to reduce government
involvement with the poor so people can solve their
problems themselves through markets.
We can see the effect on government policy on poverty
by examining fluctuations in the poverty rate over
time.
The poverty rate is the percentage of Americans who
fall below the “poverty threshold.”
The Poverty Threshold
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To establish the “poverty threshold” the US
Department of Agriculture first determines the cost of
an economy food budget.
The poverty threshold is set at three times that budget.
It is adjusted for the number of people in the
household, the annual inflation rate, whether the
individual adult householders are younger than 65 years
of age, whether they live in Hawaii or Alaska (where the
cost of living is relatively high) or in the rest of the US.
Poverty Rate
The 1930s: The Great Depression
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During the Great Depression (1929-39), 30% of
Americans were unemployed, and many of the people
who had jobs were barely able to make ends meet.
In response to the suffering of the American people
and the large, violent labor strikes of the era, President
Franklin Roosevelt introduced such programs as Social
Security, Unemployment Insurance, and Aid to
Families with Dependent Children (FDC).
The Great Depression (Cont.)
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For the first time, the federal government took
responsibility for providing basic provisions to
citizens who were unable to do so themselves.
Because of Roosevelt’s “New Deal” policies,
and rapidly increasing prosperity in the decades
after WWII, the poverty rate fell dramatically,
reaching 19% in 1964.
The 1960s: War on Poverty
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In 1964, President Lyndon Johnson declared a “war on
Poverty.”
Millions of southern blacks who migrated to northern
and western cities in the 1940s and 1950s were unable
to find jobs.
Many African Americans demanded at least enough
money from the government to allow them to survive.
President Johnson soon broadened access to AFDC
and other welfare programs.
In 1973 the poverty rate dropped to 11.1%.
The 1980s: “War against the Poor”
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Reagan explained the tough economic times the nation
was having was the result of too much government.
He argued that cutting government services and the
taxes that fund those services supposedly stimulates
economic growth and reduce relief to the poor.
Many saw this as a “war against the poor.”
Because a large proportion of welfare recipients were
African Americans and Hispanics, some analysts
believed that this move was fed by racist sentiment.
Poverty rates rose.
Myths about the Poor
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Myth 1: The majority of poor people are African- or
Hispanic-American single mothers with children.
In 2006, fully 44% of the poor were non-Hispanic
whites
 Female-headed families represented 53% of the
poor, 38% lived in married-couple families.
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Myths about the Poor
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Myth 2: People are poor because they don’t want to
work.
More than 37% of the poor over age 15 worked in
2006, nearly 12% full time.
 44% of poor people are under age 18 or over 65.
 Many of the poor are unable to work due to health
or disability issues.
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Myths about the Poor
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Myth 3: Poor people are trapped in poverty.
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Only about 12% of the poor remain poor 5 or more
years in a row
Myths about the Poor
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Myth 4: Welfare encourages married women with
children to divorce so they can collect welfare, and it
encourages single women on welfare to have more children.
Women on welfare have a lower birthrate than
women in the general population.
 Welfare payments are very low and recipients suffer
severe economic hardship.
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Myths about the Poor
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Myth 5: Welfare is a strain on the federal budget.
“Means-tested” welfare programs require recipients
to meet an income test to qualify.
 Such programs accounted for only 6% percent of
the federal budget in 2001.
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Perception of Class Inequality
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Research shows that we know we live a class-divided
society.
Why then do we think inequality continues to exist?
Most Americans agree with the statement, “inequality
continues because it benefits the rich and powerful.”
Most Americans also agree with the statement,
“inequality continues because ordinary people don’t
join together to get rid of it.”
Government’s Role in Reducing
Poverty
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Despite widespread awareness of inequality and
considerable dissatisfaction with it, most Americans are
opposed to the government playing an active role in
reducing inequality.
Most Americans remain individualistic and self-reliant.
On the whole, we persist in the belief that opportunities
for mobility are abundant and that it is up to the
individual to make something of those opportunities by
means of talent and effort.