1. Copyright © Allyn & Bacon 2007 Chapter 2 Wealth and Poverty: U.S. and Global Economic Inequalities This multimedia product and its contents are protected under copyright law. The following are prohibited by law: Any public performance or display, including transmission of any image over a network; Preparation of any derivative work, including the extraction, in whole or in part, of any images; Any rental, lease, or lending of the program.

2. Copyright © Allyn & Bacon 2007 The “American Dream” Each generation can have a higher standard of living  Regardless of race, national origin, sexual orientation, religion, etc. Class system  System of inequality based on ownership and control over resources and the type of work  Social mobility

3. Copyright © Allyn & Bacon 2007 Wealth and Poverty Globally High-income nations: Highly industrialized (e.g., U.S., Australia) Middle-income nations: Transforming from agrarian to industrial (e.g., Panama, Romania) Low-income nations: Primarily agrarian (e.g., sub- Saharan Africa, Afghanistan) The most rapid population growth is occurring primarily in low- income nations that can least afford to take care of greater numbers of people. Source: U.S. Census Bureau, 2004c.

4. Copyright © Allyn & Bacon 2007 Social Stratification Hierarchy of social groups Based on control over basic resources Widens gap between rich and poor  Individually and nationally Reduces life chances for poor

5. Copyright © Allyn & Bacon 2007 Figure 2.2: Median U.S. Household Income by Race and Hispanic Origin, 1990-2002 (Median Income in 2002 Dollars) Source: U.S. Census Bureau, 2004c.

6. Copyright © Allyn & Bacon 2007 Karl Marx (1818-1883) Capitalism  Bourgeoisie Owners of the means of production  Proletariat Workers of the means of production Exploitation of workers by capitalists leads to inequality and poverty

7. Copyright © Allyn & Bacon 2007 Max Weber (1864-1920) Multidimensional model Wealth  Value of all economic assets Power  Achieve goals despite opposition Prestige  Respect and esteem from others

8. Copyright © Allyn & Bacon 2007 Recent Theory of Class Structure: Erik O. Wright (1997) Four classes in US Capitalist economy: Ownership of means of production  Capitalist Purchase of labor of others  Managerial class Supervision of labor of others  Small-business class Sale of one’s own labor  Working class

9. Copyright © Allyn & Bacon 2007 Poverty in the US Poverty line  Established in 1965 by Social Security Admin.  Contains minimum level of nutrition Low cost food budget (“market basket”)  Multiplied by three (non-food costs)  Adjusted for size of family Out-dated standards

10. Copyright © Allyn & Bacon 2007 Who are the Poor? Age: 40% of the poor are children under 18  Fastest growing segment of children who are poor come from working poor households Gender & Household Composition: Two-thirds of all adults living in poverty are women  Feminization of Poverty Figure 2.4: People Below the Poverty Level, 2003, by Race Note: Data on Native Americans are based on 2001-2003 average. Source: DeNavas-Walt, Proctor, and Mills, 2004.

11. Copyright © Allyn & Bacon 2007 Consequences of Poverty Reduced access to health care and nutrition Lack of affordable housing Inadequate education

12. Copyright © Allyn & Bacon 2007 Social Welfare in the U.S. Welfare State (New Deal, 1930s)  Government takes responsibility of people who need help  Employment, housing, health, education, and income Economic Opportunity Act of 1964  “War on Poverty”  Head Start, Job Corps, Manpower Development Welfare Reform (1996)  Time-limited assistance for work

13. Copyright © Allyn & Bacon 2007 Individual Explanations for Poverty Blaming the victim Attitudinal problems Lack of motivation Lack of Human Capital  Personal assets, like education and skills, that people bring with them to the labor market

14. Copyright © Allyn & Bacon 2007 Cultural Explanations for Poverty Blames cultural deficiency Culture of poverty (Oscar Lewis, 1966)  Inability to delay gratification  Hostility  Deficient communication patterns Lack of Cultural Capital  Cultural assets acquired from the family, like values, language, and beliefs, that are necessary for social advancement

15. Copyright © Allyn & Bacon 2007 Structural Explanations for Poverty Focus on macro level changes  Economical changes and industrialization Wage squeeze & high rates of underemployment & unemployment  Taking home less money Corporate quest for profits  Technologies take place of workers

16. Copyright © Allyn & Bacon 2007 Solutions for Poverty Individual solutions: People should work harder Cultural solutions: Enhancing people’s cultural capital Structural solutions: Job and training programs, providing child care, providing healthcare, affordable housing