Social Mobility and Poverty

What you’ll learn to do: examine social mobility and poverty

Do you believe in the American Dream? How plausible do you think it is for someone to grow up in poverty and to become a millionaire? Watch this video from popular vlogger John Green to ponder how “open” our “open system” of stratification is in the United States. How does it compare to other open systems of stratification like those found in Denmark and Canada? How does systemic inequality of opportunity, particularly for racial and ethnic minorities, and for women affect one’s ability to move up the social class ladder?

Learning outcomes

  • Describe how inequality of opportunity is measured through life chances and standard of living
  • Describe types of social mobility
  • Distinguish between relative and absolute poverty
  • Describe the economic situation of some of the world’s most impoverished areas
  • Examine poverty in the United States

Social Mobility

Life Chances

Max Weber’s conceptualization of social class examines class, status, and power. We know by now that all societies have a mechanism to rank, or stratify, its members and that this stratification is unequal in terms of rewards and benefits. Weber used the term life chances (Lebenschancen in German) to describe the opportunities to increase one’s position in the social class structure. Categories that affect life chances include the social class one is born into, geographic location, family ancestry, race, ethnicity, age, and gender.

Consider the life chances of a child born in Syria today. Syria is one of the most violent countries in the world, and millions of Syrians have been displaced or are refugees seeking asylum in other countries. What kinds of life chances are afforded to Syrian children? 

Consider the life chances of a child born into the Kennedy family in Massachusetts, which has been called “America’s top dynasty” [1] versus the life chances of a child born to a poor family in Mississippi. The Kennedy child is born into class, status, and power, having a U.S. President, three U.S. Senators, four U.S. Representatives, and one U.S. Cabinet member within his or her extended family. This boy or girl will attend elite private boarding schools, will travel the world, and will be exposed to possibilities largely unknown to his or her counterpart in Mississippi. Now imagine that the child born in Mississippi is African-American and has ancestors who were sharecroppers that lived under Jim Crow Laws, and whose more recent forebears struggled through the Civil Rights Movement. This child will likely attend underfunded public schools and watch his or her parents struggle economically to find sustainable work and obtain health care. More than likely, he or she will experience racism from a very young age. 

Watch It

Watch this video to see how things such as class, status, race, and geography shape life chances. Social stratification affects a wide range of life chances, including things like parenting, educational attainment, and health.

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Social Mobility

Social mobility refers to the ability to change positions within a social stratification system. When people improve or diminish their economic status in a way that affects social class, they experience social mobility. Social mobility is one way to attempt to measure opportunity. In a perfectly mobile society, parents’ resources would be completely irrelevant to a child’s prospects; in a perfectly immobile society (like a caste system), parents’ resources rigidly determine a child’s trajectory.

Individuals can experience upward or downward social mobility for a variety of reasons. Upward mobility refers to an increase—or upward shift—in social class. In the United States, people applaud the rags-to-riches achievements of celebrities like Jennifer Lopez or Michael Jordan. Bestselling author Stephen King worked as a janitor prior to being published. Oprah Winfrey grew up in poverty in rural Mississippi before becoming a powerful media personality. There are many stories of people rising from modest beginnings to fame and fortune. But the truth is that relative to the overall population, the number of people who rise from poverty to wealth is very small. Still, upward mobility is not only about becoming rich and famous. In the United States, people who earn a college degree, get a job promotion, or marry someone with a good income may also move up socially. In contrast, downward mobility indicates a lowering of one’s social class. Some people move downward because of business setbacks, unemployment, or illness. Dropping out of school, losing a job, or getting a divorce may result in a loss of income or status and, therefore, lead to downward social mobility.

It is not uncommon for different generations of a family to belong to varying social classes. This is known as intergenerational mobility. For example, an upper-class executive may have parents who belonged to the middle class. In turn, those parents may have been raised in the lower class. Patterns of intergenerational mobility can reflect long-term societal changes.

Similarly, intragenerational mobility refers to mobility within one’s own lifetime. For example, someone who is born into the lower working class could be the first in their family to obtain a college degree and move from the lower working class to the lower middle class and work as a teacher or other type of professional.

Structural mobility happens when societal changes enable a whole group of people to move up or down the social class ladder. Structural mobility is attributable to changes in society as a whole, not individual changes. In the first half of the twentieth century, industrialization expanded the U.S. economy, raising the standard of living and leading to upward structural mobility. In today’s work economy, the recent recession, increasing automation, and the outsourcing of jobs overseas have contributed to a decade of historically high unemployment rates. Many people have experienced economic setbacks, creating a wave of downward structural mobility.

When analyzing the trends and movements in social mobility, sociologists consider all modes of mobility. Scholars recognize that mobility is not as common or easy to achieve as many people think. In fact, some consider social mobility a myth.

Standard of Living

In order to examine social mobility, it is important to understand standard of living, which refers to the level of wealth available to a certain socioeconomic class in order to acquire the material necessities and comforts to maintain its lifestyle. The standard of living is based on factors such as income, employment, class, poverty rates, and housing affordability. Because standard of living is closely related to quality of life, it can represent factors such as the ability to afford a home, own a car, and take vacations.

Women who are single heads of household tend to have a lower income and lower standard of living than their married or male counterparts. This is a worldwide phenomenon known as the feminization of poverty—which acknowledges that women disproportionately make up the majority of individuals in poverty across the globe.

In the United States, as in most high-income nations, social stratifications and standards of living are in part based on occupation (Lin and Xie 1988). Aside from the obvious impact that income has on someone’s standard of living, occupations also influence social standing through the relative levels of prestige they afford. Employment in medicine, law, or engineering confers high status. Teachers and police officers are generally respected, though their jobs are not considered particularly prestigious. At the other end of the scale, some of the lowest rankings apply to positions like waitress, janitor, and bus driver.

The most significant threat to the relatively high standard of living we’re accustomed to in the United States is the decline of the middle class, as discussed above. The size, income, and wealth of the middle class have all been declining since the 1970s. This is occurring at a time when corporate profits have increased more than 141 percent, and CEO pay has risen by more than 298 percent (Popken 2007).

G. William Domhoff, of the University of California at Santa Cruz, reports that “In 2010, the top 1% of households (the upper class) owned 35.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 53.5%, which means that just 20% of the people owned a remarkable 89%, leaving only 11% of the wealth for the bottom 80% (wage and salary workers)” (Domhoff 2013).

Thus, sociologists are interested in examining both social mobility among individuals and the likelihood of groups to move up or down within the U.S. class system over time. Within these categories one can also consider what the standard of living might be for individuals within each of the social classes.

Watch It

Watch this video to learn more about social mobility. The video highlights research that began in 1982 by Karl Alexander, Doris Entwisle, and Linda Olson. They followed 800 first grade students in Baltimore for twenty five years and examined the impact their socioeconomic status had throughout their lives.

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Think It Over

  • Track the social stratification of your family tree. Did the social standing of your parents differ from the social standing of your grandparents and great-grandparents? Does your class differ from your social standing, and, if so, how? What aspects of your societal situation establish you in a social class?
  • How does the longitudinal research conducted by Alexander and Entwisle help us understand the “long shadow of poverty,” particularly among racial minorities?

Global Poverty

What does it mean to be poor? Does it mean being a single mother with two kids in New York City, waiting for the next paycheck in order to buy groceries? Does it mean living with almost no furniture in your apartment because your income doesn’t allow for extras like beds or chairs? Or does it mean having to live with the distended bellies of the chronically malnourished throughout the peripheral nations of Sub-Saharan Africa and South Asia? Poverty has a thousand faces and a thousand gradations; there is no single definition that pulls together every part of the spectrum. You might feel you are poor if you can’t afford cable television or buy your own car. Every time you see a fellow student with a new laptop and smartphone you might feel that you, with your ten-year-old desktop computer, are barely keeping up. However, someone else might look at the clothes you wear and the calories you consume and consider you rich.

A young, impoverished boy is shown holding a baby girl.

Figure 1. How poor is poor for these beggar children in Vietnam? (Photo courtesy of Augapfel/flickr)

Types of Poverty

Social scientists define global poverty in different ways and take into account the complexities and the issues of relativism described above. Relative poverty is a state of living where people can afford necessities but are unable to meet their society’s average standard of living. People often disparage “keeping up with the Joneses”—the idea that you must achieve at least your neighbors’ observable standard of living in order to not feel or appear deprived. Less abstractly, you might feel “poor” if you are living without a car to drive to and from work, or without an economic safety net should a family member fall ill, and without any “extras” beyond just making ends meet.

Dilapidated slum dwellings are shown from above.

Figure 2. Slums in India illustrate absolute poverty all too well. (Photo courtesy of Emmanuelle Dyan/flickr)

Contrary to relative poverty, people who live in absolute poverty lack even the basic necessities, which typically include adequate food, clean water, safe housing, and access to healthcare. Absolute poverty is defined by the World Bank (2014a) as when someone lives on less than $1.25 a day. According to the most recent estimates, in 2011, about 17 percent of people in the developing world lived at or below $1.25 a day, a decrease of 26 percent compared to ten years ago, and an overall decrease of 35 percent compared to twenty years ago. A shocking number of people––88 million––live in absolute poverty, and close to 3 billion people live on less than $2.50 a day (Shah 2011).

While several economic factors can be improved in the United States (inequitable distribution of income and wealth, feminization of poverty, stagnant wages for most workers while executive pay and profits soar, a declining middle class), we are fortunate that the poverty experienced here is most often relative poverty and not absolute poverty. Whereas absolute poverty is deprivation so severe that it puts one’s survival in jeopardy, relative poverty is not having the means to achieve the lifestyle of the average person in your country.

Subjective poverty describes poverty that is composed of many dimensions; it is subjectively present when your actual income does not meet your expectations and perceptions. With the concept of subjective poverty, the poor themselves have a greater say in recognizing when poverty is present. In short, subjective poverty has more to do with how a person or a family defines themselves. This means that a family subsisting on a few dollars a day in Nepal might think of themselves as doing well, within their perception of normal. However, a Westerner traveling to Nepal might visit the same family and see extreme need.

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Absolute Poverty Around the World

Who are the impoverished? Who is living in absolute poverty? The poorest people in the world are women and those in peripheral and semi-peripheral nations. For women, the rate of poverty is particularly worsened by familial-domestic and broader societal pressures on their time. In general, time is one of the few luxuries the very poor have, but studies have shown that women in poverty, who are often responsible for cooking and housekeeping and other labor-intensive family comforts, as well as for earning income, have less free time. The result is that while men and women may have the same rate of economic poverty, women are suffering more in terms of overall well-being (Buvinic 1997). It is harder for females to get credit to expand businesses, to take the time to learn a new skill, or to spend extra hours improving their existing skills so as to be able to earn higher pay.

Africa

The majority of the poorest countries in the world are in Africa. That is not to say there is not diversity within the countries of that continent; countries like South Africa and Egypt have much lower rates of poverty than Angola and Ethiopia, for instance. Overall, African income levels have been dropping compared to the rest of the world, meaning that Africa as a whole is getting relatively poorer. Making the problem worse, 2014 saw an outbreak of the Ebola virus in West Africa, leading to both a public health crisis and an economic downturn due to a loss of workers and tourist dollars.

Why is Africa in such dire straits? Much of the continent’s poverty can be traced to the availability of land, especially arable land (land that can be farmed). Centuries of struggle over land ownership have meant that much useable land has been ruined or left unfarmed, while many countries with inadequate rainfall have never set up an infrastructure to irrigate. Many of Africa’s natural resources were long ago taken by colonial forces, leaving little agricultural and mineral wealth on the continent.

Further, African poverty is worsened by civil wars and inadequate governance that are the result of a continent reshaped by colonial borders and leaders. Consider the example of Rwanda. There, two ethnic groups cohabitated with their own system of hierarchy and management until Belgian colonists took control of the country in 1915 and rigidly confined members of the population into two unequal ethnic groups. Historically, members of the Tutsi group held positions of power, but the involvement of the Belgian colonizers led to the Hutus seizing power during a 1960s revolt. This ultimately produced a repressive government and a genocide against the Tutsis that left hundreds of thousands of Rwandans dead or living in a broad geographical displacement called a diaspora (U.S. Department of State 2011c). Ten years after the civil war, researchers estimated that the conflict resulted in a 20-30% reduction of per capita GDP in the nation.[2] The painful rebirth of a self-ruled Africa has meant many countries bear ongoing scars as they try to see their way towards the future (World Poverty 2012a).

Asia

While the majority of the world’s poorest countries are in Africa, the majority of the world’s poorest people are in Asia. As in Africa, Asia finds itself with disparities in the distribution of poverty, with Japan and South Korea holding much more wealth than India and Cambodia. In fact, most poverty is concentrated in South Asia. One of the most pressing causes of poverty in Asia is simply the pressure that the size of the population puts on its resources. In fact, many believe that China’s success in recent times has much to do with its draconian population control rules, which strongly encourage families to have only one child. According to the U.S. State Department, China’s market-oriented reforms have contributed to its significant reduction of poverty and to the speed at which it has experienced an increase in income levels (U.S. Department of State 2011b).

Similar to many African countries, Asian countries have suffered from the legacy of imperialism and colonialism, as seen in the Philippines, India, Indonesia, and Vietnam. Subsequent wars and U.S. intervention have deepened economic problems.

MENA

The Middle East and North Africa region (MENA) includes oil-rich countries in the Gulf, such as Iran, Iraq, and Kuwait, but also countries that are relatively resource-poor in relation to their populations, such as Morocco and Yemen. These countries are predominantly Islamic. For the last quarter-century, economic growth was slower in MENA than in other developing economies, and almost a quarter of the 300 million people who make up the population live on less than $2.00 a day (World Bank 2013).

The International Labour Organization tracks the way income inequality influences social unrest. The two regions with the highest risk of social unrest are Sub-Saharan Africa and the Middle East-North Africa region (International Labour Organization 2012). Increasing unemployment and high socioeconomic inequality in MENA were major factors in the Arab Spring, which—beginning in 2010—toppled dictatorships throughout the Middle East in favor of democratically elected government. Adding to the prospects for social unrest is the fact that unemployment and income inequalities are often blamed on immigrants, foreign nationals, and ethnic/religious minorities.

Watch It

Watch the selected second half of this video to learn more about absolute poverty around the world.

Global Feminization of Poverty

In some ways, the phrase “global feminization of poverty” says it all: around the world women are disproportionately bearing the burden of poverty. This means more women live in poor conditions, receive inadequate healthcare, bear the brunt of malnutrition and inadequate drinking water, and so on. Throughout the 1990s, data indicated that while overall poverty rates were rising, especially in peripheral nations, the rates of impoverishment increased for women nearly 20 percent more than for men (Mogadham 2005).

Why is this happening? While myriad variables affect women’s poverty, research specializing in this issue identifies three causes (Mogadham 2005):

  1. The expansion in the number of female-headed households
  2. The persistence and consequences of intra-household inequalities and biases against women
  3. The implementation of neoliberal economic policies (with limited governmental intervention) around the world

While women are living longer and healthier lives today compared to ten years ago, around the world many women are denied basic rights, particularly in the workplace. In peripheral nations, they accumulate fewer assets, farm less land, make less money, and face restricted civil rights and liberties. Women can stimulate the economic growth of peripheral nations, but they are often undereducated and lack access to credit needed to start small businesses.

In 2013, the United Nations assessed its progress toward achieving its Millennium Development Goals. Goal 3 was to promote gender equality and empower women, and there were encouraging advances in this area. While women’s employment outside the agricultural sector remains under 20 percent in Western Asia, Northern Africa, and Southern Asia, worldwide it increased from 35–40 percent over the twenty-year period ending in 2010 (United Nations 2013).

Consequences of Poverty

A malnourished child is shown here.

Figure 3. For this child at a refugee camp in Ethiopia, poverty and malnutrition are a way of life. (Photo courtesy of DFID – UK Department for International Development/flickr)

Not surprisingly, the consequences of poverty are often also causes. The poor often experience inadequate healthcare, limited education, and lack of access to birth control. But those born into these conditions are also incredibly challenged in their efforts to better their circumstances because these consequences of poverty are also causes of poverty, which perpetuate an ongoing cycle of disadvantage.

In their analysis of global inequality studies, sociologists Neckerman and Torche (2007) have divided the consequences of poverty into three areas. The first, termed “the sedimentation of global inequality,” proposes that once poverty becomes entrenched in an area it is typically very difficult to reverse. As mentioned above, poverty exists in a cycle where the consequences and causes are intertwined and mutually reinforced. The second consequence of poverty is its effect on physical and mental health. Poor people face physical health challenges, including malnutrition and high infant mortality rates. Mental health is also detrimentally affected by the emotional stresses of poverty, with relative deprivation carrying the most robust effect. Again, as with the ongoing inequality, the effects of poverty on mental and physical health become more entrenched as time goes on. Neckerman and Torche’s third consequence of poverty is the prevalence of crime. Cross-nationally, crime rates are higher, particularly for violent crime, in countries with higher levels of income inequality (Fajnzylber, Lederman, and Loayza 2002).

The Underground Economy Around the World

What do the driver of an unlicensed “hack” cab in New York, a piecework seamstress laboring in her home in Mumbai, and a street tortilla vendor in Mexico City have in common? They are all members of the underground economy, a loosely defined unregulated market unhindered by taxes, government permits, or human protections. Official statistics before the worldwide 2008 recession posit that the underground economy accounted for over 50 percent of nonagricultural work in Latin America; the figure went as high as 80 percent in parts of Asia and Africa (Chen 2001). A recent article in the Wall Street Journal discusses the challenges, parameters, and surprising benefits of this informal marketplace. The wages earned in most underground economy jobs, especially in peripheral nations, are a pittance––a few rupees for a handmade bracelet at a market, or maybe 250 rupees ($5 U.S.) for a day’s worth of fruit and vegetable sales (Barta 2009). But these tiny sums mark the difference between survival and extinction for the world’s poor.

The underground economy has never been viewed very positively by global economists. After all, its members don’t pay taxes, don’t take out loans to grow their businesses, and rarely earn enough to put money back into the economy through consumer spending. But according to the International Labor Organization (an agency of the United Nations), some 52 million people worldwide will lose their jobs due to the ongoing and unevenly addressed worldwide recession. And while those in core nations know that high unemployment rates and limited government safety nets can be frightening, their situation is nothing compared to the loss of a job for those barely eking out an existence. Once that job disappears, the chance of staying afloat is very slim.

Within the context of this recession, some see the underground economy as a key player in keeping people alive. Indeed, an economist at the World Bank credits jobs created by the informal economy as a primary reason why peripheral nations are not in worse shape. Women in particular benefit from the informal sector. The majority of economically active women in peripheral nations are engaged in the informal sector, which is somewhat buffered from the economic downturn. The flip side, of course, is that it is equally buffered from the possibility of economic growth.

Even in the United States, the informal economy exists, although not on the same scale as in peripheral and semi-peripheral nations. It might include under-the-table nannies, gardeners, and housecleaners, as well as unlicensed street vendors and taxi drivers. There are also those who run informal businesses, like daycares or salons, from their houses. Analysts estimate that this type of labor may make up 10 percent of the overall U.S. economy, a number that will likely grow as companies reduce their number of employees, leaving more workers to seek other options. In the end, the article suggests that whether selling medicinal wines in Thailand or woven bracelets in India, the workers of the underground economy at least have what most people want most of all: a chance to stay afloat (Barta 2009).

Think It Over

  • Consider the concept of subjective poverty. Does it make sense that poverty is in the eye of the beholder? When you see a homeless person, is your reaction different if he or she is seemingly content versus begging? Why?
  • Go to your campus bookstore or visit its web site. Find out who manufactures apparel and novelty items with your school’s insignias. In what countries are these produced? Conduct some research to determine how well your school adheres to the principles advocated by USAS.

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Poverty in the U.S.

Drawing the Poverty Line

The federal poverty level is based on relative poverty. Poverty in the United States is measured by the number of people who fall below a certain level of income—called the poverty line—that defines the income needed for a basic standard of living.

In the United States, the official definition of the poverty line traces back to a single person: Mollie Orshansky. In 1963, Orshansky, who was working for the Social Security Administration, published an article called “Children of the Poor” in a highly useful, but dry publication called the Social Security Bulletin. Orshansky’s idea was to define a poverty line based on the cost of a healthy diet.

Her previous job had been at the U.S. Department of Agriculture, where she had worked in an agency called the Bureau of Home Economics and Human Nutrition. One task of this bureau had been to calculate how much it would cost to feed a nutritionally adequate diet to a family. Orshansky found that the average family spent one-third of its income on food. She then proposed that the poverty line be the amount needed to buy a nutritionally adequate diet, given the size of the family, multiplied by three.

The current U.S. poverty line is essentially the same as the Orshansky poverty line, although the government adjusts the dollar amounts to represent the same buying power over time. The U.S. poverty line in 2015 ranged from $11,790 for a single individual to $25,240 for a household of four people.

Figure 1 shows the number in poverty and the U.S. poverty rate over time; that is, the percentage of the population below the poverty line in any given year. While the number in poverty has grown over time, the poverty rate declined through the 1960s, rose in the early 1980s and early 1990s, but seems to have been slightly lower since the mid-1990s. However, in no year in the last four decades has the poverty rate been less than 13.5% of the U.S. population—that is, at best about one American in nine is below the poverty line.

The federal poverty line in the U.S. is an example of relative poverty (not absolute poverty). The cost of living is not taken into consideration, so the federal poverty level is standard across the United States and fails to account for the fact that some cities are vastly more expensive than others.The Economic Policy Institute (EPI) created this family budget calculator (click on it to see how your city measures up to the federal poverty line). According to the EPI, in 615 U.S. cities,  it takes a total income at least twice the federal poverty line for any type of family with three children or fewer to afford basic expenses.[3]

Two line graphs titled, "Number in Poverty and Poverty Rate: 1959 to 2017". The top graph shows that the number in poverty was high in the 1960s, low in the 70s, then steadily rose until the present-day, with a drop in the year 2000, and a sharp increase during the recession. It was 39.7 million in 2017. The bottom graph shows poverty rate from 1959 to 2017. This graph shows a steady, but small, decline in the poverty rate, starting at about 20 percent in 1959 and decreasing to 12.3 percent by 2017.

Figure 4. Changes in the number in poverty and the poverty rate.

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Watch It

Watch the selected clip from this CrashCourse video to understand how poverty looks within the United States.

Causes of poverty

Poverty as a personal failing

When it comes to poverty in the United States, there are two main lines of thought. The most common line of thought within the U.S. is that a person is poor because of personal traits–things like personality characteristics, motivation, and education. This viewpoint puts the blame on an individual’s personal failure not to climb out of poverty and is centered around the belief that anyone can succeed if they try hard enough. This thought pattern stems from the idea of meritocracy, or the belief that individuals are selected and moved ahead based primarily on their achievements and intellectual abilities.

Daniel Patrick Moynihan, Secretary of Labor and sociologist, completed a report titled “The Negro Family: The Case for National Action” (known as the Moynihan Report) in 1965. The intent was to show that civil rights legislation alone would not produce racial equality, and to advocate for additional policies to address structural discrimination. Unfortunately, the report was interpreted as focusing on the internal dynamics of Black families, as it seemed to identity racially disproportionate rates of divorce, “illegitimate” children, welfare dependence, and unemployment as primary factors. This reading allowed many conservatives to argue that racial self-help was both adequate and necessary, with some some commentators straying into judgement instead of analysis so as to focus on “loose morality among African Americans” as a way to blame Black families themselves for inequality [4].

Poverty as a structural failing

Another explanation for poverty is that it results from structural inequality. For example, the job market fails to provide a proper number of jobs which pay enough to keep families out of poverty. Even if unemployment is low, the labor market may be saturated with low paying, part-time work that lacks benefits such as health insurance coverage or employee retirement contributions (thus limiting the number of full-time, good paying jobs). Low minimum wages and the increasing prevalence of part-time jobs that offer no benefits have contributed to the labor market’s inability to produce enough jobs sufficient for keeping a family out of poverty. This is an example of an economic structural failure. It exists independently of any one individual’s actions or priorities, and as such it is an apt object of analysis for sociologists.

Poverty is not equally distributed among racial and ethnic groups in the United States. Although whites make up the largest total number of people in poverty, Blacks, Latinos, and Native Americans are disproportionately likely to be poor by comparison.

The 1965 Moynihan Report began with the following rationale for why Blacks were not experiencing equality as a group: “There are two reasons. First, the racist virus in the American bloodstream still afflicts us: Negroes will encounter serious personal prejudice for at least another generation. Second, three centuries of sometimes unimaginable mistreatment have taken their toll on the Negro people” (as reprinted in Geary 2015).

Sociologist William Julius Wilson has written extensively about the institutional barriers Black Americans face, and has examined structural causes of poverty. His books The Declining Significance of Race (1972), The Truly Disadvantaged (1987) and When Work Disappears (1996) examine what he calls the “underclass.” In one case study, Wilson documents the economic and social changes in the North Lawndale area of West Chicago over several years. He notes that North Lawndale lost 75 percent of its businesses from 1960-1970, resulting in unprecedented levels of unemployment. While 70 percent of Black men nationwide worked full-time, year-round in the 1970s, by the 1980s, only half did (1996). Although Wilson’s books have won numerous awards and have been widely read, he has been heavily criticized for prioritizing the role of social class over that of race and institutional racism.

Poverty and Race in Chicago

One way to examine structural failings is to examine Chicago, a city with high unemployment and murder rates that have made national headlines for several years.In the 2017 Great Cities Institute report, the institute estimated that 40 percent of Black 20 to 24-year-olds in Chicago are out of work and out of school, compared with 7 percent of their white counterparts in the same city. The unemployment rate for blacks in Chicago was 16.2 percent in 2018, compared with under 5% for whites. Thirty-four percent of African Americans in Chicago are living in relative poverty as compared to 24 percent for Blacks nationally (which is already disproportionate since Blacks make up 12 percent of the U.S. population)[5].

Few jobs are located close to the most segregated and the most violent neighborhoods in South Chicago, and some researchers credit the tremendous increase in violence to a lack of economic opportunities. According to the University of Chicago Crime Lab, murders in Chicago increased by 58 percent between 2015 and 2016. High poverty areas, especially historically segregated areas, also often have low performing schools. In 2013, 50 Chicago public schools were closed, which affected 12,000 students, nearly 88 percent of whom were Black. In a 2018 summary report, students who were forced to transfer schools experienced more suspensions and absences across the board, and were subject to both short and long-term negative learning effects [6]. Better-educated people are less likely to be poor, but how do we begin to improve public schools in the poorest neighborhoods when much of their funding is determined by property taxes? We will continue to examine poverty as it relates to race, ethnicity, gender, and education in subsequent modules.

A recent survey by the U.S. Federal Reserve found that 47 percent of Americans would have a difficult time raising $400 cash in an emergency[7] This supports recent census data, which shows that half the population qualifies as poor or low income. Poverty rates are persistently higher in rural and inner city parts of the country as compared to suburban areas. Children, the disabled, the elderly, and minority populations are particularly vulnerable to poverty.

Most people tend to think about poverty as “cyclical” or generational poverty, but in a recent study conducted by the Center for Poverty Research at the University of California, Davis, the average “spell of poverty” lasted 2.8 years, and although most people become poor due to less money being earned by a head of household, 25 percent entered into poverty as the result of a breadwinner’s death or through divorce[8]. The effects of poverty on children are many, including an increased likelihood of reduced life chances.

WAtch It

Watch as Dr. Ann Huff Stevens, Director of the Center for Poverty Research and Chairperson of Economics at UC Davis, describes one way to address poverty among children and to reduce its long-term effects.

Should We Raise the Minimum Wage?

In 2001, Barbara Ehrenreich published Nickel and Dimed: On (Not) Getting By in America in which she conducted an experiment by working a series of minimum wage jobs in three states and documenting her experiences. She focused especially on the challenges facing women among the working poor, who often hold the types of “service” jobs she herself sought out and analyzed.

A tenth anniversary edition was published in 2011, and Ehrenreich followed up with many of the minimum wage workers she had met a decade before during her participant observation research. In this edition she writes “In what has become a familiar pattern, the government defunds services that might help the poor while ramping up law enforcement. Shut down public housing, then make it a crime to be homeless. Generate no public-sector jobs, then penalize people for falling into debt. The experience of the poor, and especially poor people of color, comes to resemble that of a rat in a cage scrambling to avoid erratically administered electric shocks. And if you should try to escape this nightmare reality into a brief, drug-induced high, it’s ‘gotcha’ all over again, because that of course is illegal too.”

In the 2014 State of the Union Address, President Obama called on Congress to raise the national minimum wage, and then signed an executive order doing exactly that for individuals working on new federal service contracts. However, Congress did not pass legislation to change the national minimum wage for all workers. This has proved controversial, with various economists taking different sides on the issue, and with public protests being staged by several groups of minimum-wage workers, often with the assistance of unions and other advocates.

Opponents of raising the minimum wage argue that some workers would get larger paychecks while others would lose their jobs, and companies would be less likely to hire new workers because of the increased cost of paying them (Bernstein 2014; cited in CNN).

Proponents of raising the minimum wage contend that some job loss would be greatly offset by the positive effects on the economy of low-wage workers having more income (Hassett 2014; cited in CNN). In 2018, Amazon raised the minimum wage for its employees to $15 an hour, doubling the federal rate and resulting in higher wages for its 250,000 workers (plus an additional 100,000 seasonal employees).[9]

Sociologists may also consider the minimum wage issue from differing perspectives. How much of an impact would a minimum wage raise have for a single mother? Some might study the economic effects, such as her ability to pay bills and keep food on the table. Others might look at how reduced economic stress could improve family relationships. Some sociologists might research the impact on small business owners. These could all be examples of public sociology, a branch of sociology that strives to bring sociological dialogue to public forums. The goals of public sociology are to increase understanding of the social factors that underlie social problems and to assist in finding solutions. Ehrenreich’s book is a compelling example of public sociology. According to Michael Burawoy (2005), the challenge of public sociology is to engage multiple publics in multiple ways.

WAtch iT

Watch this video to hear from Princeton sociologist Kathryn Edin as she describes her research on welfare programs in the United States. She explains that single parents experienced a “damned if you do, damned if you don’t” set of choices under the governmental assistance program of the 1990s, since working meant they were given less aid. That changed in 1997 with the creation of TANF (Temporary Assistance for Needy Families) and the expansion of the Earned Income Tax Credit (EITC). These programs are designed to prioritize work, but there are still more people than ever living on less than $2 a day. Edin recommends raising the minimum wage and expanding EITC to include caretakers of children. The latter proposal would mean categorizing unpaid domestic work as qualifying labor for the purposes of such programs.

Further Research: Stratified Monopoly

An image of a corner of a Monopoly game board

Figure 2. In Monopoly the game, unlike in real life, all players start on equal footing.

Many sociologists and economists have used the classic board game Monopoly to illustrate poverty, social mobility, and the principles of a market economy. The game, nearly a century old, was originally designed to show the benefits of a limited tax system as well as those of a monopoly, or owning all of a particular type of property, utility, or transportation system.

However, if we consider Monopoly as an example we can see that several aspects of the game do not in fact translate to everyday life.

  1. Each player begins at “GO” with the same amount of money and an opportunity to buy property as soon as one lands on it.
  2. Each player “earns” the same amount of money when they pass “GO.”
  3. Each player has the same likelihood of rolling the die, going to jail, and bailing themselves out.

When we consider players who are unsuccessful at Monopoly, we often say they have had “bad luck.”

You can play your own game of stratified Monopoly following the rules found here.

  • What does Stratified Monopoly show us about wealth and poverty in the U.S.?
  • Which version of Monopoly is closer to reality in the U.S.?

Think It Over

  • The “Earned Income Tax Credit (EITC)” is not often described as “welfare.” Does this categorization change the way people view government assistance?

Glossary

absolute poverty:
the state where one is barely able, or unable, to afford basic necessities
downward mobility:
a lowering of one’s social class
feminization of poverty:
the high and rising percentage of women who bear the burden of poverty across the globe
intergenerational mobility:
a difference in social class between different generations of a family
intragenerational mobility:
a difference in social class between different members of the same generation
life chances:
opportunities for an individual to improve his or her quality of life
poverty line:
the minimum level of income deemed adequate to maintain a decent standard of living
relative poverty:
the state of poverty where one is unable to live the lifestyle of the average person in their country
social mobility:
the ability to change positions within a social stratification system
structural mobility:
a societal change that enables a whole group of people to move up or down the class ladder
subjective poverty:
a state of poverty composed of many dimensions, subjectively present when one’s actual income does not meet one’s expectations
underground economy:
an unregulated economy of labor and goods that operates outside of governance, regulatory systems, or human protections
upward mobility:
an increase—or upward shift—in social class

  1. Hess, S. 2019. "America's Top Dynasty?" http://www.washingtonpost.com/wp-dyn/content/article/2009/09/11/AR2009091101831.html?noredirect=on
  2. Lopez, Humberto; Wodon, Quentin; Bannon, Ian; Lopez, Humberto; Wodon, Quentin; Bannon, Ian. 2004. Rwanda : the impact of conflict on growth and poverty (English). Social Development Notes ; no. 18. Conflict Prevention & Reconstruction. Washington, DC: World Bank. http://documents.worldbank.org/curated/en/591321468777614741/Rwanda-the-impact-of-conflict-on-growth-and-poverty
  3. Berman, J. 2015. "Federal poverty line doesn't reflect" https://www.huffingtonpost.com/2013/07/03/federal-poverty-line-afford-to-live_n_3541338.html.
  4. Geary, D. 2015. "The Moynihan Report: An Annotated Edition." The Atlantic. https://www.theatlantic.com/politics/archive/2015/09/the-moynihan-report-an-annotated-edition/404632/
  5. Semuels, A. (2018). "Chicago's Awful Divide." The Atlantic. https://www.theatlantic.com/business/archive/2018/03/chicago-segregation-poverty/556649/
  6. Strauss, V. 2018. "Chicago Promised," Washington Post. https://www.washingtonpost.com/news/answer-sheet/wp/2018/05/24/chicago-promised-that-closing-nearly-50-schools-would-help-kids-in-2013-a-new-report-says-it-didnt/?noredirect=on&utm_term=.e9a1d7ec34d7
  7. Gabler, N. 2018. "The Secret Shame." The Atlantic. https://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/.
  8. Stevens, A.H. "Transitions In and Out of Poverty," UC Davis Center for Poverty Research. https://poverty.ucdavis.edu/policy-brief/transitions-out-poverty-united-states.
  9. Danielle Wiener-Bronner and Chris Isidore. (October 2, 2018). Amazon announces $15 minimum wage for all US employees. CNN. https://money.cnn.com/2018/10/02/technology/amazon-minimum-wage/index.html