Update: Income v. Wealth Distribution

1. Update: Income v. Wealth Distribution Top 1% has 57.5% of wealth, up from 49.1% in 2000, as estimated from taxes paid on dividends, interest, rent, and capital gains. (Problem: tax-exempt retirement accounts are not counted.) http://www.cbpp.org/1-29-06tax2.htm, January 29, 2006 NEW, UNNOTICED CBO DATA SHOW CAPITAL INCOME HAS BECOME MUCH MORE CONCENTRATED AT THE TOP Data Indicate that Cutting Taxes on Capital Gains and Dividend Income is Likely Even More Regressive than in the Past. By Isaac Shapiro and Joel FriedmanTop 1% has 57.5% of wealth, up from 49.1% in 2000, as estimated from taxes paid on dividends, interest, rent, and capital gains. (Problem: tax-exempt retirement accounts are not counted.) http://www.cbpp.org/1-29-06tax2.htm, January 29, 2006 NEW, UNNOTICED CBO DATA SHOW CAPITAL INCOME HAS BECOME MUCH MORE CONCENTRATED AT THE TOP Data Indicate that Cutting Taxes on Capital Gains and Dividend Income is Likely Even More Regressive than in the Past. By Isaac Shapiro and Joel Friedman

2. Liberal capitalism Liberty is the most important right Individual pursuit of self-interest is best for society as a whole Adam Smith and the invisible hand: the free market Sounds like Social Darwinism

3. Classical liberalism �We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men�� --The Declaration of Independence It doesn�t say the government will give anyone anything � just not take it away. So existing inequality is not challenged by the liberal ideal.It doesn�t say the government will give anyone anything � just not take it away. So existing inequality is not challenged by the liberal ideal.

4. Bill Gates, self-made billionaire? �Whatever else you feel about him, Bill Gates has the virtue of being a self-made man. He invested in his own brilliance. You may not like some of his tactics and he probably didn�t play fair all of the time, but he doesn�t whine.� -- Cleveland Plain-Dealer, 3/14/98

5. Self-made mythology? Gates Father: Corporate lawyer Mother: Daughter of bankers High school: Lakeside prep College: Harvard At Lakeside Prep, Gates and Microsoft cofounder Paul Allen had a computer lab in the late 1960s! Now it�s a school with 99% college-bound students, a 9:1 student/teacher ratio, a $50 million endowment, and tuition/fees of about $22,000 for high school (includes mandatory laptop). www.lakesideschool.orgAt Lakeside Prep, Gates and Microsoft cofounder Paul Allen had a computer lab in the late 1960s! Now it�s a school with 99% college-bound students, a 9:1 student/teacher ratio, a $50 million endowment, and tuition/fees of about $22,000 for high school (includes mandatory laptop). www.lakesideschool.org

6. Concentration and hegemony

7. Marx: ideological hegemony Masses give consent to the ruling class Antonio Gramsci Material dominance leads to cultural dominance

8. The corporate media: News Two examples of how the concentration of wealth leads to the concentration of ideas. News and movies. Board members: Disney: George Mitchell (chairman, former senate majority leader) Viacom: William Cohen (BOD, former Sec. Defense, Senator) GE: Sam Nunn (BOD, former Senator and chairman of Armed Services Committee) AOL: Carla Hills (BOD, former U.S. Trade Representative)Two examples of how the concentration of wealth leads to the concentration of ideas. News and movies. Board members: Disney: George Mitchell (chairman, former senate majority leader) Viacom: William Cohen (BOD, former Sec. Defense, Senator) GE: Sam Nunn (BOD, former Senator and chairman of Armed Services Committee) AOL: Carla Hills (BOD, former U.S. Trade Representative)

9. The corporate media: Movies Warner Brothers, Universal Studios, Fox, Dreamworks, and Buena Vista (Disney) control 73% of the market with 33 movies.Warner Brothers, Universal Studios, Fox, Dreamworks, and Buena Vista (Disney) control 73% of the market with 33 movies.

11. You could just ask people� Now, how do we measure inequality, if we wanted to study it? Or, as we call it in social science, how do we �operationalize� it? This is the subjective class (for the U.S. population), and it�s not that informative for us. Except for the extremes, it just shows what class people think they should belong in. We have more scientific ways of identifying class positions.Now, how do we measure inequality, if we wanted to study it? Or, as we call it in social science, how do we �operationalize� it? This is the subjective class (for the U.S. population), and it�s not that informative for us. Except for the extremes, it just shows what class people think they should belong in. We have more scientific ways of identifying class positions.

12. Socioeconomic status as class

13. Marx: Relation to �means of production� Capitalists (bourgeoisie) Middle class (petit bourgeoisie) Self-employed, intellectuals & professionals Labor aristocracy Well-paid, comfortable workers Working class (proletariat) Underclass (lumpen proletariat) Marx wanted to identify classes as part of his political-economic analysis. He saw classes, more than individuals, as potential social actors. * Economic role determined class identity * Class identity determined orientation toward capitalism * Capitalists exploit the labor of others directly * Petit bourgeoisie doesn�t exploit others directly, but they�re not exploited * Labor aristocracy works to make a profit for others, but they�re comfortable - Skilled, though working class. E.g., large machinery specialist - They may not want to join the working class revolution because they�re just comfortable where they are. * Working class are the revolutionary vehicle - They are directly exploited - Their labor makes others rich - They have nothing to lose, live at subsistence The underclass is economically excluded, but helps keep down the price of labor - Capitalists can use them to counter the union efforts to negotiateMarx wanted to identify classes as part of his political-economic analysis. He saw classes, more than individuals, as potential social actors. * Economic role determined class identity * Class identity determined orientation toward capitalism * Capitalists exploit the labor of others directly * Petit bourgeoisie doesn�t exploit others directly, but they�re not exploited * Labor aristocracy works to make a profit for others, but they�re comfortable - Skilled, though working class. E.g., large machinery specialist - They may not want to join the working class revolution because they�re just comfortable where they are. * Working class are the revolutionary vehicle - They are directly exploited - Their labor makes others rich - They have nothing to lose, live at subsistence The underclass is economically excluded, but helps keep down the price of labor - Capitalists can use them to counter the union efforts to negotiate

14. Source: March Current Population Survey, 2000. Groups of occupations Percent Executive, administrative and managerial 14% Professional specialty 15% Sales, support, service 41% Blue collar 26% How about using occupation as a way to capture class? The exec/admin/mgr have the most authority and power - corporate executives and managers The professional specialties have specific high-education training - doctors and lawyers and teachers Sales, support and service are white or pink collar, usually no college. - secretary, customer service, nanny Blue collar occupations range from high to low pay, but usually no college - construction, plumbing, gardening > Above the top and below the bottom are people who don�t work at all. Question to class: Does everyone in society fit into these categories? E.g., students, children, retired people don�t Question: Is class an individual identity, or should we measure that at household level? (meaning it�s at the family level)How about using occupation as a way to capture class? The exec/admin/mgr have the most authority and power - corporate executives and managers The professional specialties have specific high-education training - doctors and lawyers and teachers Sales, support and service are white or pink collar, usually no college. - secretary, customer service, nanny Blue collar occupations range from high to low pay, but usually no college - construction, plumbing, gardening > Above the top and below the bottom are people who don�t work at all. Question to class: Does everyone in society fit into these categories? E.g., students, children, retired people don�t Question: Is class an individual identity, or should we measure that at household level? (meaning it�s at the family level)

15. Source: U.S. Census Bureau, March Current Population Survey. Education level (household?) Let�s think about class differences at the family level. The graph shows the percent of college graduate in a household. - It�s increasing for all groups, and it�s nearly doubled for all groups. - But white families tend to have way more college graduates per family. - What�s important about looking at the family as the unit of analysis is that we�re putting individuals in social context. How many of you knew you�re going to college before high school, middle school, elementary school? - How did you know? - Does that have anything to do with your family? People who�ve been to college are more likely to have some beliefs and practices. - And maybe this kind of thing extends to the whole household Another thing about looking at household as unit of analysis is that it shows how individual income is not always a good indication of one�s income. - e.g., A woman who does not work, but married to a very rich man, is not poor. - What about couples with different occupations? E.g., A secretary married to a doctor. Are they upper class or middle class? Quick summary of what we�ve covered so far is that - individual attributes is not enough to determine one�s class - income is just one aspect of inequality that shows class hierarchy We talked about common interests and behaviors as one of the distinguishing characters of classesLet�s think about class differences at the family level. The graph shows the percent of college graduate in a household. - It�s increasing for all groups, and it�s nearly doubled for all groups. - But white families tend to have way more college graduates per family. - What�s important about looking at the family as the unit of analysis is that we�re putting individuals in social context. How many of you knew you�re going to college before high school, middle school, elementary school? - How did you know? - Does that have anything to do with your family? People who�ve been to college are more likely to have some beliefs and practices. - And maybe this kind of thing extends to the whole household Another thing about looking at household as unit of analysis is that it shows how individual income is not always a good indication of one�s income. - e.g., A woman who does not work, but married to a very rich man, is not poor. - What about couples with different occupations? E.g., A secretary married to a doctor. Are they upper class or middle class? Quick summary of what we�ve covered so far is that - individual attributes is not enough to determine one�s class - income is just one aspect of inequality that shows class hierarchy We talked about common interests and behaviors as one of the distinguishing characters of classes

16. Source: 2001 Statistical Abstract, tab. 1245. Age 7+, 1+ times/year. Common interests andbehaviors (stereotypes?) Percent who participate Golf 11 Recreational boating 14 Camping (not wilderness) 20 Softball / baseball 13 Bowling 17 Percent of all population (over 7) who has played the sport more than once a year. The colors are based on stereotypes associated with upper, middle, and lower class. By having recreational activities in common, members of the same class develop a common identity. Do people who bowl see themselves differently from people who golf? It�s not just that one costs more. It�s a different kind of experience. - Quiet, in nature, peaceful, with maybe a cigar and brandy afterward - Versus noisy, in a strip-mall, cigarette smoke and beer.Percent of all population (over 7) who has played the sport more than once a year. The colors are based on stereotypes associated with upper, middle, and lower class. By having recreational activities in common, members of the same class develop a common identity. Do people who bowl see themselves differently from people who golf? It�s not just that one costs more. It�s a different kind of experience. - Quiet, in nature, peaceful, with maybe a cigar and brandy afterward - Versus noisy, in a strip-mall, cigarette smoke and beer.

17. Source: 2001 Statistical Abstract, tab. 1245. Age 7+, 1+ times/year. Sports and income Let�s do a fact check. First, 22.8% of the population lived in the home where the household income was $75,000 or more. The graph that I�m about show you shows the percentage of people who made more than $75,000 within each category. [Show graph] For instance, 44% of everyone who said they went Alpine Skiing lived in the home with $75,000 or more income. And only 15% of the people who went hunting lived in the home with $75,000 household income. Meaning most of them made less money than that. It seems to overlap with the stereotype somewhat, but it seems like the sport is generally an upper class thing. Question: Why do you think this is (meaning the upper class enjoying most sports more than middle- or upper-class). - Physical/geographic access (like skiing and golf), - Urban rural differences (hunting is lower income because rural incomes are lower). - But also taste. Why don�t rich people bowl more? They could if they wanted to.Let�s do a fact check. First, 22.8% of the population lived in the home where the household income was $75,000 or more. The graph that I�m about show you shows the percentage of people who made more than $75,000 within each category. [Show graph] For instance, 44% of everyone who said they went Alpine Skiing lived in the home with $75,000 or more income. And only 15% of the people who went hunting lived in the home with $75,000 household income. Meaning most of them made less money than that. It seems to overlap with the stereotype somewhat, but it seems like the sport is generally an upper class thing. Question: Why do you think this is (meaning the upper class enjoying most sports more than middle- or upper-class). - Physical/geographic access (like skiing and golf), - Urban rural differences (hunting is lower income because rural incomes are lower). - But also taste. Why don�t rich people bowl more? They could if they wanted to.

18. Taste as an intersection of� Economic Capital � Money, wealth Cultural Capital � Norms, values, beliefs, and ways of life of the groups to which people belongEconomic Capital � Money, wealth Cultural Capital � Norms, values, beliefs, and ways of life of the groups to which people belong

19. Short assignment for Thursday