Chapter 2- Wealth and Poverty
1- Economic inequality and poverty is a characteristic of stratified societies in the past (China,
Rome, Greece, Egypt, etc.) and the present (U.S., Spain, UK, Mexico, etc.). In the U.S.
economic inequality is due to social stratification.
a) Social stratification- The hierarchical arrangement of groups in society on the basis of their
control and access to economic resources.
b) Affluent people have better opportunities in life- quality education, safe neighborhoods,
quality health care, police and often private security.
2- Social class position (Upper, Middle, Working) is shaped by the interplay of wealth, power,
and prestige.
a) The Pyramid- the capitalist class, the managerial class, the small business class, and the
working class.
b) The universities and professors are situated in the middle of the pyramid. Universities rely
on funding from the private sector, the government, and students’ tuition. Many university
professors are able to get promotions and maintain their middle class status by doing
research and publishing on poor people.
3- Income/wealth ratios in the U.S. (average income, 2015).
a) Top 1%- $1,363,977
b) Top 5%- $477,293
c) Top 10%- 312,536
d) Bottom 90%- $34,074
4- Median household income by race/ethnicity (2017).
a) Asian- $81,331. This is a very diverse group for it includes refugees (Hmong, Vietnamese,
etc.) to highly educated people from China, India, etc. These groups have different histories
and cultures but are grouped together for the census.
b) White- $68,145.
c) Hispanic- $50,486. This is another varied group with roots in the U.S. Southwest and
different countries in Latin America.
d) Black- $40,258.
5- Poverty rate by race/ethnicity (a family of four $25,094) in 2017.
a) U.S. total- 39.7 million people (12.3%).
b) White- 8%
c) Asian- 9%
d) Hispanic- 16%
e) Black- 20%
6- Consequences of poverty.
a) 27.3 million people (12.2%) without health insurance or limited Medicaid in 2016.
b) Malnutrition- rickets, scurvy, worms, mental problems, etc.
c) Inadequate housing and homelessness.
d) Inadequate educational opportunities and lower levels of education.
7- Welfare State- The government provides services and benefits to the population like
employment, housing, health, education, or guaranteed income. Government support varies
through time at the federal level and across states. This is a complex situation for the state or
country may expand services provided but at the same time may have to raise taxes or raise
revenue in other ways (toll booths, gas tax, license fees, etc.).
8- Explanations for poverty.
a) Individualistic- attitudinal and motivational problems (laziness and other flaws) and/or
human capital (person does not have the knowledge and skills required by employers).
b) Cultural- no planning for the future, apathy, hostility, suspicion toward others, and deficient
communication and other behavioral patterns. Low income people do not have the cultural
capital (education, knowledge/skills) to function in a competitive global economy.
c) Structural- poverty is an intrinsic consequence of the stratification in society which rewards
the people at the top of the pyramid at the expense of those at the bottom.
9- Poverty is a very complex phenomenom in the U.S. in a globalized economy.
a) While the culture of poverty (b above) has been discredited in many ways, the symbolic
interactionist perspective (discussed in chapter 1) may bring attention to a person’s lack of
desire to look for employment or behaving in ways that may result in job termination (as
discussed in the conflict perspective, chapter 2, the person’s behavior may be due to
mistreatment at work, etc.). Also, some individuals may have a very high level of education
but society is not creating sufficient jobs. For example, there is an over supply of attorneys
nationwide and many lawyers (with large student loans) may end up working in jobs that
pay low salaries and may not provide health insurance. Nevertheless, law schools continue
to admit and produce more law graduates.