Understanding Economic Inequality and Mobility in the USA

1. Stratification Monopoly Part 1: Measuring Inequality and Mobility by Allen Hyde, School of History and Sociology, Georgia Institute of Technology

2. The many ways to measure economic inequality and mobility Lots of folks talk about inequality and mobility in the USA these days; however, there is much disagreement on how to measure inequality. Talk with a neighbor: • What are some ways that you hear people talk about inequality? How do they “measure” it (either as a number or qualitatively)? • How would you define economic inequality and mobility? How are the two related?

3. Inequality of what? • Earnings: wages and salary • Income: wages and salary plus capital gains • Wealth: everything you own; assets minus debts • Consumption: individual or household spending • Debt: credit card; home; car; student loans, etc. What are the pros and cons of each? Which is the best?

4. *In Pew’s analysis of wealth gains above, they categorized families by their household income, after they adjusted their incomes for family size. Middle-income families are families whose size-adjusted income is between two-thirds and twice the median size-adjusted income. Lower-income families have a size-adjusted household income less than two-thirds the median and upper-income families more than twice the median.

5. Inequality of what? Talk with your neighbor: How does picking a different type of inequality create the same story about the same place and time? Which one is the “correct” choice? And why?

6. Absolute vs relative measures of mobility • Absolute measures of mobility: Do you make more than you did last year, or do you make more than your parents did at the same age (adjusted for inflation)? • Relative measures of mobility: comparing the relative position of someone vs how that changes over time (same individual or intergenerational) • What gives you the best picture of economic mobility: absolute, relative, or both?

7. Stratification Monopoly Part 2: Rules of the Game

8. Monopoly Basics • Goal: Make as much money as possible or make other players go bankrupt!

9. What to Do • I will break you into groups of 5. • Once you join your group, decide which version of the game you want to play (income, wealth, or income & wealth). • When you start, you should all roll die to give each player a value of 1-5 to determine the income/wealth category (try to make it random). • Choose a banker (whoever is good with money or numbers) to distribute money. • Distribute money and property appropriately and begin the game; you have XXX minutes to play. • During gameplay, refer to the questions on the Student Handout, as we’ll reflect on them afterwards.

10. Find your income and wealth • First, your group should determine which version of game you are playing: income only, wealth only, or both income and wealth. • Next, each player in your group will roll a 6-sided die to determine their income and wealth rank. 1=poorest quintile; 5=richest quintile. If you roll a 6, you roll again. If you roll a number that someone else already rolled, roll again until you get a free number • Poorest • Second poorest • Middle • Second Richest • Richest

11. Write down or think about the following questions as you play: Do you think upward mobility is possible in each country? What is each country (one may be fictional, one is the United States)? Where would you want to live? The distributions shown on the left represent the different income and wealth quintiles used in your games

12. Find more tools • https://serve-learn-sustain.gatech.edu/teaching-toolkit