1. Chapter 2 Wealth and Poverty U.S. and Global Economic Inequities

2. Wealth and Poverty in Global Perspective High-income nations –Highly industrialized economy –High national and per capita income –Ex: U.S., Canada, Japan Middle-income nations –Transforming from agrarian to industrial economy © 2013 Pearson Education, Inc. All rights reserved.

3. Wealth and Poverty in Global Perspective –National & per capita income is somewhat low –Ex: Colombia, Guatemala, Poland Low-income nations –Primarily agrarian economy –Very low levels of national and per capita income –Ex: Sub-Saharan Africa © 2013 Pearson Education, Inc. All rights reserved.

4. Global Disparity Gap between richest and poorest nations is increasing Quality of Life indicators (life expectancy, health, sanitation) show that there is: –Disparity in life chances of individuals around the world © 2013 Pearson Education, Inc. All rights reserved.

5. Global Disparity –Life chances: having access to important resources Food, shelter, health care, clothing Unequal access to resources leads to 1.3 billion people who live in absolute poverty: –Inability to secure most basic necessities of life © 2013 Pearson Education, Inc. All rights reserved.

6. U.S. Class Inequality U.S. has significant social stratification: –Hierarchy of social groups –Some groups control more resources U.S. stratification system has changed over time: –Gap: “haves” & “have nots” increasing –Life chances for poor in America decreasing © 2013 Pearson Education, Inc. All rights reserved.

7. Measuring Social Class Karl Marx (1818-1883) unidimensional approach Class position determined by relationship to means of production in capitalist society –Bourgeoisie: own means of production –Proletariat: work for those who own means of production © 2013 Pearson Education, Inc. All rights reserved.

8. Measuring Social Class Max Weber (1864–1920) takes a multidimensional approach –Wealth: Value of economic assets –Power: Achievement of goals despite opposition –Prestige: Respect and esteem from others © 2013 Pearson Education, Inc. All rights reserved.

9. Measuring Social Class Erik O. Wright (1997) –Recent theory of class criteria for placement with corresponding class distinctions: Ownership of means of production Purchase of labor of others Control of labor of others Sale of one’s own labor © 2013 Pearson Education, Inc. All rights reserved.

11. Wealth vs. Income Inequality Wealth –Value of all economic assets –Wealth more unevenly distributed than income –Poorest 20% of U.S. families have NO wealth –Minorities have accumulated less wealth than whites © 2013 Pearson Education, Inc. All rights reserved.

12. Wealth vs. Income Inequality Income –Economic gain from salaries and wages –Big gap between highest and lowest income earners in the U.S. –Median income for Blacks and Hispanics remains lower than that of Whites © 2013 Pearson Education, Inc. All rights reserved.

15. Class Divisions in U.S. Upper Class: –Wealthiest and most powerful –Made up of investors and heirs Upper-middle class: –Control production in society –Made up of professionals (doctors, attorneys, stockbrokers) © 2013 Pearson Education, Inc. All rights reserved.

16. Class Divisions in U.S. Middle class: –White collar workers, middle management Working Class: –Semiskilled workers in industry and nonmanual positions –Made up of daycare workers, cashiers Working Poor: © 2013 Pearson Education, Inc. All rights reserved.

17. Class Divisions in U.S. –Work full time –Made up of unskilled and lowest paid service positions –Remain at edge of poverty Chronically Poor: –20% of U.S. population –Negative net worth (owe more than they own) © 2013 Pearson Education, Inc. All rights reserved.

18. Poverty in the U.S. Poverty Rate: –% of population below governmentally defined poverty line; fluctuates from year to year –14.3% (43.6 million people) in 2009 Poverty Line: –Established in 1965 by Social Security Administration © 2013 Pearson Education, Inc. All rights reserved.

19. Poverty in the U.S. –Formula takes market basket (low cost, nutritional food budget) And multiplies by 3 (for non food costs) –Adjusted each year for inflation –Takes into account family size –Some believe it is out of date as formula is based on 1960’s standards. © 2013 Pearson Education, Inc. All rights reserved.

21. Who are the Poor? Characteristics associated with greater poverty risk: –Gender: 2/3 of adults in poverty are women Households headed by women are fastest growing segment of poor Feminization of poverty © 2013 Pearson Education, Inc. All rights reserved.

22. Who are the Poor? –Age: Children under 18 make up 35% of those in poverty (but only 24.3% of overall population) 1 in 5 kids lives in poverty, if under age 6 then 1 in 4 kids live in poverty (2009) Race: –Minorities are very overrepresented in poverty © 2013 Pearson Education, Inc. All rights reserved.

25. Consequences of Poverty Limited access to health care Inadequate nutrition which leads to medical problems Difficulty finding affordable housing Reduced educational opportunities –Fewer years of schooling –Less likely to graduate (high school/college) © 2013 Pearson Education, Inc. All rights reserved.

27. Social Welfare Welfare state: –Assistance programs for housing, health, education, income Several changes made to program over time: –Economic Opportunity Act of 1964 –1996 Welfare Reform © 2013 Pearson Education, Inc. All rights reserved.

28. Explanations of Poverty Individual Explanations: –Laziness; human capital; blaming the victim Cultural Explanations: –Cultural deficiency; culture of poverty theory; cultural capital Structural Explanations: –The economy puts people in poverty © 2013 Pearson Education, Inc. All rights reserved.

29. Solutions to Poverty Functionalist Solutions: –Strengthen social institutions Conflict Solutions: –Reduce gender, racial, and class inequality Symbolic Interactionist Solutions: –Reduce stigma associated with being poor by changing how we view those in poverty. © 2013 Pearson Education, Inc. All rights reserved.