1. Lecture Five Poverty and Inequality in the US: The Working Poor

2. 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

3. We are all richer…

4. Share of the Income 2006

5. 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

6. 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

7. Opportunity Structure Wealth High Income Good Neighborhood Good Schools Good Jobs Access to Health Care → → → → ↑ ↓ → → → →

8. What does social mobility look like? • http://www.nytimes.com/packages/html/national/20050515_CLASS_GRAPHIC/index_01.html

9. Barriers to Mobility? • Social Exclusion: cut off from mechanisms that allow social mobility in a society • Neighborhood/Residential • Education • Occupation • Culture

10. 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

11. 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?

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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