LET’S TALK ABOUT MONEY! WEALTH, INCOME, & CONSTRUCTING SOCIAL CLASS

1. LET’S TALK ABOUT MONEY!WEALTH, INCOME, & CONSTRUCTING SOCIAL CLASS SOC 3300 – Social Inequality Dr. M. C. Sengstock Professor of Sociology http://users.wowway.com/~marycay910

2. ISSUES FOR DISCUSSION:WHAT IS INCOME? … WEALTH?HOW DO THEY DIFFER? • What Do We Mean By Income? • What Does Thomas Shapiro (#5) Mean by Income? • What Do We Mean By Wealth? • What Does Shapiro Mean By Wealth?

3. INCOME • Earnings From Work: • Salaries or Wages • Substitutions for Earnings: • Pensions, Social Security • Disability Payments, Unemployment Insurance, Other Social Assistance • Resources Obtained Over a Specific Period (Annually, Monthly, etc.)

4. WEALTH • Total Value of a Family’s Financial Resources – Minus All Debts • Includes: Stocks, Money in Banks, Other Investments • Business(es) • Property Owned: Home(s), Cars, Planes • Debts Are Subtracted from Above • Remainder Are the Family’s “ASSETS”

5. COMPARING INCOME & WEALTH • How Much INCOME Do YOU (Personally) Have? • Regular, Full-time Job? • Part-time Job? • Salary? Or Wages? What’s the Difference? • Salary: Known Amount Per Month/Week • Wages: Amount Per Hour – Changes With Number of Hours • Regular Income from Social Security or Pension? • Irregular Income from Day Jobs? • No Regular Income? • How Much WEALTH Do YOUPersonally Have? Your FAMILY? • Own a Home or Condominium? A Business? Or Several? • Own a Vacation Home? Own Any Other Real Estate (Rentals)? • Have a Bank Account? How Much Is In It? • Own Stocks, Bonds, Other Investments?

6. IMPORTANCE OF WEALTH What Does Wealth Do? … Allow People to Do? • Tide You Over for a “Rainy Day” • Save for the Future – Plan for Retirement • Save for the Future: Children, Grandchildren • Build Up FAMILY Resources For Posterity • Ethnic Community Goals: “He Has PROPERTY!”

7. The Hidden Cost of Being African American: How Wealth Perpetuates Inequality (Thomas Shapiro, 2004 – #5) • Interviewed Nearly 200 Families • Asked About Their “Wealth” – Their “Assets” • How They Plan to & Actually Acquire Wealth • How They Use Their Assets

8. WHAT PEOPLE SAID ABOUT “WEALTH” “Wealth”: Treated Differently from “Income” • People SPEND Income – They PRESERVE Assets • Wealth There for Emergencies: Personal Safety Net, Cushion Against Unexpected Job Loss, Health Crisis • Quotes: “Income Supplies Life Support; Assets Provide Opportunities.” • “Income is Limited. Assets You Hold Onto For the Future.” • “Wealth is Definitely Long Term. We Act As If It’s Not Even There.”

9. CORRELATING WEALTH & INCOME • Wealth in America (Lisa Keister, 2000) • Finds Little Correlation Between Wealth & Income • What Does This Mean? • People Who Have Wealth Primarily Have It From the PAST • It Was INHERITED • They Keep It In Reserve for Unexpected Expenses • It Helps Them Get a Good Education, Perhaps Good Jobs • But They Don’t Necessarily Make the Largest Salaries • They Live a Life Style Which Those With ONLY Income: • Cannot Afford – Cannot Understand! • They Always Have a “Back-Up”

10. People Confuse Wealth & Income • True of General Public • Also True of Many Social Scientists & Research Studies • Research Almost Always Focuses on INCOME! • Rarely Uses Wealth As a Variable! • We Compare High – Middle – Low Income People • We Do Not Look At How Much Wealth People Have – Or How “Wealthy” Differ From Those Without Wealth • Perpetuated By the American Media

11. EXAMPLES OF WHAT WEALTH CAN DO • Assets to: • Send Kids to Private Schools “Good Contacts” • Support Children in College  No School Loans • “Legacy” Admission to College (vs. Affirmative Action) • Provide Down Payments for Children’s Homes  Larger Homes, Better Neighborhoods, Better Schools • Provide Jobs/resources in Family Businesses • EX: Republican Nat’l Committeewoman: “Get a Job!” • Ann Romney: “Had To Get Use Daddy’s Stocks & Loans To Get Through College!

12. IMPACT ON AFRICAN-AMERICANS • “Wealth Dearth” Main Impact: African-Americans • Not Been In a Position to Accumulate Wealth • Wealth Is Accumulated Over GENERATIONS • Wealth Is Not the Work of 1 Individual • Getting A Good Education & Good Job: • Provides a Good INCOME • It Does Not Produce WEALTH • That Requires Several Generations!

13. APPLICATION TO WHITE ETHNICS • Similar Impact on Other American Ethnic Groups • Jews Have Done Fairly Well in Getting Ahead • How Jews Came to Be Seen as “White” (Karen Bodkin) • Irish, Italian, Greek, Jewish Became Doctors, Judges, etc. (Mary Waters #2) • May Be Over-Stated Re Wealth • Many Italian & Polish & Some Irish Still Have Little Wealth

14. WHY MAJOR IMPACT ON BLACKS? • Impact of Government Policies • Other Institutional Policies • AFTER Civil War & Reconstruction • Blacks Ineligible for Government Programs: • 1935: Roosevelt – Social Security Act: Passed By Deals With Southern States: STATE Administration • Post WW II Benefits: FHA, VA, GI: Blacks Ineligible • Restrictive Covenants in Housing • Home Ownership: MAJOR Mechanism  Wealth

15. Home Ownership As Major Component of Wealth • For Most People – “The Home” Is the Main (Only ?) Component of Wealth • Minorities – esp. African-Americans – Missed Out on Many Early Aids to Home Ownership • Recent Drop in Real Estate Values  Left Many Families’ Home Investment in Shambles

16. CONSEQUENTLY: • White English: Start Accumulating Wealth With a Major Asset – Began Pre-1900 • Other White Ethnic Groups: Began Around 1920 or Later – Had WW II Advantage • African-Americans: Only Begin With the Civil Rights Movement of the 1960s • Consequently: Still Far Behind in Wealth

17. GOVERNMENT IMPACT ON OPINION:ASSET POVERTY LINE (APL) Tool To Examine Resource Condition (“Wealth”) of American Families • Ability to Survive for 3 Months Without Income (Conservative Assumption – Most Need More) • 1999: Monthly Poverty Line (Family of 4) = $1,392 • 3 x $1,392 = $4,175 – How Many Families Have It? • “Asset Poor” Families Have < $4,175 – Cannot Survive for 3 Months Without Help • What If We Used a 6 or 9 Month Assumption? • Gap Would Be Even Greater

18. EXAMPLES OF ASSET POVERTY • Typical African-American: <$3,000 Assets • “Asset-Poor” Families: • 25% of African-American & Hispanic Families • 13% of White Families • 2001 Recession Particularly Hard on Middle Class – Had Been Accumulating Some Assets • Comparisons: • Whites (BASE): $1.00 Assets • Hispanics: $0.11 Assets • African-Americans: $0.07 Assets

19. IMPACT OF ASSET POVERTY Inability to Survive Through Minor Emergency: • Unemployment, No Unemployment Benefits • What Happens If They Lose a Job? • … If Someone Gets Sick? • If There Is a Recession (EX: 2001) • Conservative Answer: “They Should Have Planned Better!”

20. IS EDUCATION THE ANSWER? • Impact of Education on Assets • Prior to 2001 Recession – Middle Class Families • Middle Class Defined By Education: • If White Middle Class Owns $1 of Wealth • …Black Middle Class Owns $0.25 • …Up From $0.10 Earlier • Wealth Is NOT Accumulated By Individuals … • But By Families – OVER TIME

21. SIGNIFICANCE OF WEALTH ISSUE • Illustrates the Interaction of Social Class & Its Dimensions With Race & Ethnic Characteristics • Social Class Is Determined By Income, Wealth • Racial Characteristics Determine Social Class Membership To a Considerable Extent • Ethnic Characteristics Determine Social Class To a Lesser Extent • Social Institutions Influence These Patterns In Major Ways

22. NEXT TOPIC:INFLUENCE OF THE MEDIA • The Media: Creating the Middle Class • Defining the Middle Class • Defining Who Belongs To the Middle Class • Defining the “Others”

23. THE MEDIA ROLE IN SOCIAL CLASS DEFINITION U.S. Most Stratified Industrial Society The Poor Are “Invisible,” Demeaned Concerns of “Wealthy Class” Emphasized Wealthy Not Viewed as a “Class” “Middle Class” Defined As Major Focus Middle Class Is NOT a “Working Class” (Gregory Mantsios #6)

24. U.S. Most Stratified Industrial Society • Socio-Economic Class Influences Everything: • Jobs & Income • Quality of Education • Health & Safety • Social Contacts • YET – Maintain an Illusion of “Egalitarianism” • “Horatio Alger” Myth • Mass Media Influential in Defining Class • Decreasing Number of Media Outlets

25. Media: Poor – Invisible, Demeaned • 40 M Poor in U.S. (ME, NH, VT, RI, CN, NY, NJ) • Poor Are Increasing – 2x as Fast as Genl. Pop. • Poor Are Ignored in Media – Do Not Exist • “Faceless” – Just a Number • Undeserving, At Fault: Cheats, Addicts, Lazy • Eyesore, an “Irritation” as Opposed to Maltreated • Occasional Attention – Affluent Christmas Gifts • HHs < $10K – Give 5.5% to Charity • HHs >$100K – Give 2.9% to Charity

26. Poverty: Individual or Systemic? 2 Views of Poverty: • Individual: The Media’s View • If You’re Poor, It’s Your Fault • Systemic: The Reality: • Direct Result of Economic & Political Policies • Favor the Rich with Tax Cuts, Corp. Aid; • Deprive Poor of Jobs, Adequate Wages, Right to Unionize • Produce a Society in Which General Wages Decrease • “Blaming the Victim” (Wm. Ryan)

27. Focus on Issues of “Wealthy Class” • Great Attention to Stock Market – Though Few People Own Stock • Attention to Taxes & Need to Decrease Them • Though Most Tax Decreases Favor Very Rich • Even the Poor Convinced Taxes Are Bad! • Media Concern With “Extreme” Union Power • Little Attention to Corporate Political Influence

28. Wealthy Not Defined as a Class • Wealthy Behavior as a “Class” Ignored • Wealthy Influence in Society Ignored • Supreme Court: Corporate Right to Fund Lobbyists • Most Political Power in Hands of Millionaires! • Wealthy Use Their Influence • Wealthy Image as “Benevolent” • Usually Donate to Arts, Wealthy Causes • Generally Do Not Give to Agencies Helping Poor

29. Middle Class As Major Focus • If the Poor Are Demeaned … • & Rich Are Not Defined As Rich … • What’s Left? • Emphasis on “Middle Class” – Everyone Not “Poor” Defined as “Middle Class” • Leaves Viewers, Readers Believing: • “We” (Rich & Working People) Are All the Same … • Except for Those Lazy, Good-for-Nothing Poor!

30. Evidence for Huge “Middle Class” • Surveys: Most People (75%-90%) Identify Themselves as “Middle Class” • Upper & Lower Class ID Is Rare (5%-10% Each) • Give Option of “Working Class”: • Divide “Middle Class” in Half • Even Objectively Poor Often ID As Middle Class • Impact of the Media’s Image of “the Poor”?

31. Middle Class NOT a Working Class • How Did “Middle Class” Become “Middle”? • Most Started “Poor” – Worked Hard • Assisted By Government Programs: • Home Ownership Assistance • Educational Programs • Social Security, Unemployment, etc. • Assistance from Labor Unions! (Our Parents?) • Today: Middle Class People Dissociate Themselves from Working Class! • Business Students Believe in Trusting Employers

32. Reality of the Upper Class • Very Wealthy Control U.S. Society • Disproportionate Share of “Wealth” (vs. “Income”) • Have a Distinct Life Style • Interact Primarily Among Wealthy (Schools, Clubs) • Are a “Governing” Class • Run for Office, Get Elected, Get into Power • Ensure That Political & Economic Policies Favor Their Own Interests (Taxes, Environment, Trade) • Avoid Societal Problems Through Private Programs • Private Police, Schools, Clubs, etc.

33. Summary • U.S. Has Highly Structured Class System • Mass Media Influence Public Opinion re Economy & Social Class System • Wealthy Control Society’s Economy, Politics • But Not Viewed as “Wealthy” by Society • Most People ID as “Middle Class” • Middle Class Dissociate Themselves from “Working Class” • Poor Are Demeaned & Blamed for Their Victimization