Chapter 8 Global Stratification

Wealth and Poverty in Global Perspective Problems in Studying Global Inequality Classification of Economies by Income Measuring Global Wealth and Poverty Global Poverty and Human Development Theories of Global Inequality Global Inequality in the Future

What Is Global Stratification?

Unequal distribution of wealth, power, and prestige on a global basis.

Between 1960 and 1990, the gap in global income between the rich and poor countries continued to widen.

Studying Global Inequality

The “Three Worlds” Approach– Distinguishes nations based on economic

development and standard of living. Levels of Development Approach

– Most controversial terminology used to describe global stratification.

Economic Categories Used by the World Bank

Low Income - nations with a GNP per capita of $785 or less, in 1998 dollars.

Middle-income - nations with a GNP per capita of more than $785 but less than $9,655 in 1998 dollars.

High-income Economies (25 nations)- nations with a per capita income of $9,655 or more in 1998 dollars.

Poverty

Absolute poverty- people do not have the means to secure the necessities of life.

Relative poverty- people can afford necessities but are unable to maintain an average standard of living.

Subjective poverty- actual income compared with income earner's expectations.

The Gini Coefficient

A measure of income inequality ranging from 0 (everyone has the same income) to 100 (one person receives all the income).

Indicates that global inequality between the rich and poor countries continues to exist.

Shows that similar disparities exist within nations in the world.

Human Development Index (HDI)

Criteria for measuring a country’s level of

development: life expectancy education living standards

Theories of Global Inequality

Development and Modernization Theory Dependency Theory World System Theory

Development and Modernization Theory

Four Stages of Economic Development:

1. Traditional stage -very little social change takes place and people do not think of changing their present circumstances.

2. Take-off stage - period of economic growth accompanied by a growing belief in individualism, competition, and achievement.

Development and Modernization Theory

Four Stages of Economic Development:

3. Technological maturity- the country improves in technology, reinvests in new industries, and embraces the values and institutions of high-income developed nations.

4. High mass consumption - a high standard of living that encourages consumption.

Dependency Theory

Disputes that economic growth is the key to meeting important human needs in societies.

Argues that the poor nations are caught in a cycle of structured dependency on the richer nations.

Most often applied to the newly industrializing countries.

World System Theory

Three types of nations: Core nations- possess most of the world's

capital and technology. Semiperipheral nations- a midpoint between

the core and peripheral. Peripheral nations- dependent on core

nations.

New International Division of Labor

Production is fragmented and assigned to whichever part of the world can provide the most profitable combination of capital and labor.

High-income countries have become dependent on low-income countries for labor.

 Global Inequality In The Future

In some regions, poverty continues to undermine human development.

Modern technology and economic growth could reduce poverty and increase opportunities.

Health and education may continue to improve in lower-income countries, resulting in more advances.