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 Wealth High Income Good Neighborhood Good Schools Good Jobs Access to Health Care ↑ ↓ → →

What does social mobility look like? nal/ _CLASS_GRAPHIC/index_01.h tml nal/ _CLASS_GRAPHIC/index_01.h tml

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