LET’S TALK ABOUT MONEY!
WEALTH, INCOME, &
CONSTRUCTING SOCIAL CLASS
SOC 3300 – Social Inequality
Dr. M. C. Sengstock
Professor of Sociology
http://users.wowway.com/~marycay910
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ISSUES FOR DISCUSSION:
WHAT IS INCOME? … WEALTH?
HOW DO THEY DIFFER?
• What Do We Mean By Income?
– What Does Thomas Shapiro (#5) Mean by
Income?
• What Do We Mean By Wealth?
– What Does Shapiro Mean By Wealth?
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INCOME
• Earnings From Work:
– Salaries or Wages
• Substitutions for Earnings:
– Pensions, Social Security
– Disability Payments, Unemployment Insurance,
Other Social Assistance
• Resources Obtained Over a Specific Period
(Annually, Monthly, etc.)
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WEALTH
• Total Value of a Family’s Financial Resources –
Minus All Debts
• Includes: Stocks, Money in Banks, Other
Investments
• Business(es)
• Property Owned: Home(s), Cars, Planes
• Debts Are Subtracted from Above
• Remainder Are the Family’s “ASSETS”
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COMPARING INCOME & WEALTH
• How Much INCOME Do YOU (Personally) Have?
– Regular, Full-time Job?
– Part-time Job?
– Salary? Or Wages? What’s the Difference?
• Salary: Known Amount Per Month/Week
• Wages: Amount Per Hour – Changes With Number of Hours
– Regular Income from Social Security or Pension?
– Irregular Income from Day Jobs?
– No Regular Income?
• How Much WEALTH Do YOU Personally Have? Your FAMILY?
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Own a Home or Condominium? A Business? Or Several?
Own a Vacation Home? Own Any Other Real Estate (Rentals)?
Have a Bank Account? How Much Is In It?
Own Stocks, Bonds, Other Investments?
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IMPORTANCE OF WEALTH
What Does Wealth Do? … Allow People to Do?
• Tide You Over for a “Rainy Day”
• Save for the Future – Plan for Retirement
• Save for the Future: Children, Grandchildren
• Build Up FAMILY Resources For Posterity
• Ethnic Community Goals: “He Has PROPERTY!”
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The Hidden Cost of Being African American:
How Wealth Perpetuates Inequality
(Thomas Shapiro, 2004 – #5)
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Interviewed Nearly 200 Families
Asked About Their “Wealth” – Their “Assets”
How They Plan to & Actually Acquire Wealth
How They Use Their Assets
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WHAT PEOPLE SAID ABOUT “WEALTH”
“Wealth”: Treated Differently from “Income”
• People SPEND Income – They PRESERVE Assets
• Wealth There for Emergencies: Personal Safety Net,
Cushion Against Unexpected Job Loss, Health Crisis
• Quotes:
“Income Supplies Life Support; Assets Provide Opportunities.”
• “Income is Limited. Assets You Hold Onto For the Future.”
• “Wealth is Definitely Long Term. We Act As If It’s Not Even
There.”
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CORRELATING WEALTH & INCOME
• Wealth in America (Lisa Keister, 2000)
• Finds Little Correlation Between Wealth & Income
• What Does This Mean?
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People Who Have Wealth Primarily Have It From the PAST
It Was INHERITED
They Keep It In Reserve for Unexpected Expenses
It Helps Them Get a Good Education, Perhaps Good Jobs
But They Don’t Necessarily Make the Largest Salaries
They Live a Life Style Which Those With ONLY Income:
• Cannot Afford – Cannot Understand!
• They Always Have a “Back-Up”
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People Confuse Wealth & Income
• True of General Public
• Also True of Many Social Scientists & Research
Studies
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Research Almost Always Focuses on INCOME!
Rarely Uses Wealth As a Variable!
We Compare High – Middle – Low Income People
We Do Not Look At How Much Wealth People Have –
Or How “Wealthy” Differ From Those Without Wealth
• Perpetuated By the American Media
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EXAMPLES OF WHAT WEALTH CAN DO
• Assets to:
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Send Kids to Private Schools “Good Contacts”
Support Children in College  No School Loans
“Legacy” Admission to College (vs. Affirmative Action)
Provide Down Payments for Children’s Homes 
Larger Homes, Better Neighborhoods, Better Schools
– Provide Jobs/resources in Family Businesses
• EX: Republican Nat’l Committeewoman: “Get a Job!”
• Ann Romney: “Had To Get Use Daddy’s Stocks & Loans To
Get Through College!
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IMPACT ON AFRICAN-AMERICANS
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“Wealth Dearth” Main Impact: African-Americans
Not Been In a Position to Accumulate Wealth
Wealth Is Accumulated Over GENERATIONS
Wealth Is Not the Work of 1 Individual
Getting A Good Education & Good Job:
– Provides a Good INCOME
– It Does Not Produce WEALTH
• That Requires Several Generations!
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APPLICATION TO WHITE ETHNICS
• Similar Impact on Other American Ethnic Groups
– Jews Have Done Fairly Well in Getting Ahead
– How Jews Came to Be Seen as “White” (Karen Bodkin)
– Irish, Italian, Greek, Jewish Became Doctors, Judges,
etc. (Mary Waters #2)
– May Be Over-Stated Re Wealth
– Many Italian & Polish & Some Irish Still Have Little
Wealth
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WHY MAJOR IMPACT ON BLACKS?
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Impact of Government Policies
Other Institutional Policies
AFTER Civil War & Reconstruction
Blacks Ineligible for Government Programs:
– 1935: Roosevelt – Social Security Act: Passed By
Deals With Southern States: STATE Administration
– Post WW II Benefits: FHA, VA, GI: Blacks Ineligible
– Restrictive Covenants in Housing
– Home Ownership: MAJOR Mechanism  Wealth
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Home Ownership As Major
Component of Wealth
• For Most People – “The Home” Is the Main
(Only ?) Component of Wealth
• Minorities – esp. African-Americans – Missed
Out on Many Early Aids to Home Ownership
• Recent Drop in Real Estate Values  Left
Many Families’ Home Investment in Shambles
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CONSEQUENTLY:
• White English: Start Accumulating Wealth
With a Major Asset – Began Pre-1900
• Other White Ethnic Groups: Began Around
1920 or Later – Had WW II Advantage
• African-Americans: Only Begin With the Civil
Rights Movement of the 1960s
• Consequently: Still Far Behind in Wealth
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GOVERNMENT IMPACT ON OPINION:
ASSET POVERTY LINE (APL)
Tool To Examine Resource Condition (“Wealth”)
of American Families
• Ability to Survive for 3 Months Without Income
(Conservative Assumption – Most Need More)
• 1999: Monthly Poverty Line (Family of 4) = $1,392
• 3 x $1,392 = $4,175 – How Many Families Have It?
• “Asset Poor” Families Have < $4,175 – Cannot
Survive for 3 Months Without Help
• What If We Used a 6 or 9 Month Assumption?
– Gap Would Be Even Greater
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EXAMPLES OF ASSET POVERTY
• Typical African-American: <$3,000 Assets
• “Asset-Poor” Families:
– 25% of African-American & Hispanic Families
– 13% of White Families
• 2001 Recession Particularly Hard on Middle
Class – Had Been Accumulating Some Assets
• Comparisons:
– Whites (BASE):
$1.00 Assets
– Hispanics:
$0.11 Assets
– African-Americans: $0.07 Assets
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IMPACT OF ASSET POVERTY
Inability to Survive Through Minor Emergency:
• Unemployment, No Unemployment Benefits
• What Happens If They Lose a Job?
• … If Someone Gets Sick?
• If There Is a Recession (EX: 2001)
• Conservative Answer: “They Should Have
Planned Better!”
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IS EDUCATION THE ANSWER?
• Impact of Education on Assets
– Prior to 2001 Recession – Middle Class Families
• Middle Class Defined By Education:
• If White Middle Class Owns $1 of Wealth
– …Black Middle Class Owns $0.25
– …Up From $0.10 Earlier
• Wealth Is NOT Accumulated By Individuals …
• But By Families – OVER TIME
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SIGNIFICANCE OF WEALTH ISSUE
• Illustrates the Interaction of Social Class & Its
Dimensions With Race & Ethnic Characteristics
• Social Class Is Determined By Income, Wealth
• Racial Characteristics Determine Social Class
Membership To a Considerable Extent
• Ethnic Characteristics Determine Social Class
To a Lesser Extent
• Social Institutions Influence These Patterns In
Major Ways
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NEXT TOPIC:
INFLUENCE OF THE MEDIA
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The Media: Creating the Middle Class
Defining the Middle Class
Defining Who Belongs To the Middle Class
Defining the “Others”
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THE MEDIA ROLE IN
SOCIAL CLASS DEFINITION
U.S. Most Stratified Industrial Society
The Poor Are “Invisible,” Demeaned
Concerns of “Wealthy Class” Emphasized
Wealthy Not Viewed as a “Class”
“Middle Class” Defined As Major Focus
Middle Class Is NOT a “Working Class”
(Gregory Mantsios #6)
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U.S. Most Stratified Industrial Society
• Socio-Economic Class Influences Everything:
– Jobs & Income
– Quality of Education
– Health & Safety
– Social Contacts
• YET – Maintain an Illusion of “Egalitarianism”
– “Horatio Alger” Myth
• Mass Media Influential in Defining Class
• Decreasing Number of Media Outlets
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Media: Poor – Invisible, Demeaned
• 40 M Poor in U.S. (ME, NH, VT, RI, CN, NY, NJ)
– Poor Are Increasing – 2x as Fast as Genl. Pop.
• Poor Are Ignored in Media – Do Not Exist
• “Faceless” – Just a Number
– Undeserving, At Fault: Cheats, Addicts, Lazy
– Eyesore, an “Irritation” as Opposed to Maltreated
– Occasional Attention – Affluent Christmas Gifts
• HHs < $10K – Give 5.5% to Charity
• HHs >$100K – Give 2.9% to Charity
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Poverty: Individual or Systemic?
2 Views of Poverty:
• Individual: The Media’s View
– If You’re Poor, It’s Your Fault
• Systemic: The Reality:
– Direct Result of Economic & Political Policies
• Favor the Rich with Tax Cuts, Corp. Aid;
• Deprive Poor of Jobs, Adequate Wages, Right to
Unionize
• Produce a Society in Which General Wages Decrease
– “Blaming the Victim” (Wm. Ryan)
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Focus on Issues of “Wealthy Class”
• Great Attention to Stock Market – Though Few
People Own Stock
• Attention to Taxes & Need to Decrease Them
– Though Most Tax Decreases Favor Very Rich
– Even the Poor Convinced Taxes Are Bad!
• Media Concern With “Extreme” Union Power
• Little Attention to Corporate Political Influence
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Wealthy Not Defined as a Class
• Wealthy Behavior as a “Class” Ignored
• Wealthy Influence in Society Ignored
– Supreme Court: Corporate Right to Fund Lobbyists
• Most Political Power in Hands of Millionaires!
• Wealthy Use Their Influence
• Wealthy Image as “Benevolent”
– Usually Donate to Arts, Wealthy Causes
– Generally Do Not Give to Agencies Helping Poor
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Middle Class As Major Focus
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If the Poor Are Demeaned …
& Rich Are Not Defined As Rich …
What’s Left?
Emphasis on “Middle Class” – Everyone Not
“Poor” Defined as “Middle Class”
• Leaves Viewers, Readers Believing:
– “We” (Rich & Working People) Are All the Same …
– Except for Those Lazy, Good-for-Nothing Poor!
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Evidence for Huge “Middle Class”
• Surveys: Most People (75%-90%) Identify
Themselves as “Middle Class”
• Upper & Lower Class ID Is Rare (5%-10% Each)
• Give Option of “Working Class”:
– Divide “Middle Class” in Half
– Even Objectively Poor Often ID As Middle Class
– Impact of the Media’s Image of “the Poor”?
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Middle Class NOT a Working Class
• How Did “Middle Class” Become “Middle”?
• Most Started “Poor” – Worked Hard
• Assisted By Government Programs:
– Home Ownership Assistance
– Educational Programs
– Social Security, Unemployment, etc.
• Assistance from Labor Unions! (Our Parents?)
• Today: Middle Class People Dissociate
Themselves from Working Class!
– Business Students Believe in Trusting Employers
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Reality of the Upper Class
• Very Wealthy Control U.S. Society
– Disproportionate Share of “Wealth” (vs. “Income”)
– Have a Distinct Life Style
– Interact Primarily Among Wealthy (Schools, Clubs)
– Are a “Governing” Class
– Run for Office, Get Elected, Get into Power
– Ensure That Political & Economic Policies Favor
Their Own Interests (Taxes, Environment, Trade)
– Avoid Societal Problems Through Private Programs
• Private Police, Schools, Clubs, etc.
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Summary
• U.S. Has Highly Structured Class System
• Mass Media Influence Public Opinion re Economy &
Social Class System
• Wealthy Control Society’s Economy, Politics
– But Not Viewed as “Wealthy” by Society
• Most People ID as “Middle Class”
• Middle Class Dissociate Themselves from “Working
Class”
• Poor Are Demeaned & Blamed for Their Victimization
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