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