copyright © allyn & bacon 2007 chapter 2 wealth and poverty: u.s. and global economic...
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Copyright © Allyn & Bacon 2007
Chapter 2
Wealth and Poverty: U.S. and Global Economic Inequalities
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The “American Dream”
Each generation can have a higher standard of livingRegardless 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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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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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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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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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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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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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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Poverty in the US
Poverty lineEstablished 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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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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Consequences of Poverty
Reduced access to health care and nutrition
Lack of affordable housing
Inadequate education
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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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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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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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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 profitsTechnologies take place of workers
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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