SWRK 423 Lecture Notes - Krahn People, Progressive Tax, Capitalism

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Published on 29 Jan 2013
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Income versus Wealth:
-from the top 10 riches people or families, inheritance is a critical factor
-none of them rose from rags to riches
-suggests a mix of family fortune, business acumen, and opportunism as key determinants of wealth
-only a few acquire the wealth of major enterprises but most own assets (for most adults assets are cars,
appliances, furniture, and savings)
-some wealthier families own equity in a house and more fortunate ones about to accumulate stocks and bonds
-bottom 40% of families own no assets and may owe more than they own
-top quintile have increased in wealth
-wealth inequality increasing rapidly in Canada (not as much as the USsurpass all industrialized countries in
wealth inequality)
-only a modest correlation with income and wealth (some wealthy people have low annual incomes)
-income redistribution has little to do w/ the distribution of wealth therefore, it may not get at the root of
economic inequality
Income and Poverty:
-the number of homeless people are increasing
-homelessness is one manifestation of poverty
-poverty lacks an agreed definition
-disagreement on whether it should be defined in absolute or relative terms
-absolute: focuses on “bare essentials”; suggests that poor families have resources inadequate to acquire basic
necessities of life (but what is essential varies from time to time, place to place, group to group
-most people think of poverty in relation to the social and economic context in which people live
-a relative poverty line also has drawbacks
-most definitions tend to be narrow and focus on income
-deprivation occurs when a family cannot acquire the essentials, not necessarily when income is too low
-income and consumption are correlated but people w/ high net wealth can live off savings w/ low
income
-the definition may not be important to the poor but it is consequential foe these people
-social policies are enacted or not enacted based on the levels and trends in poverty
-if show fewer poor people, government will take less action
-social policy has impact on distribution opportunities and rewards in Canada
-politics can shape the distribution of income and the system of inequality by changing laws governing
people’s right to own property ex. First Nations Land
-can also entitle people to various welfare benefits and redistributing income through tax policies
-poverty definitions are also important research tools for sociologists
-Canada does not have an official definition of poverty
-instead, statistics Canada reports a low-income cutofflow income threshold that where a family is
likely to spend 20% more of its income on food, shelter, and clothing than the average family
-most advocates for the poor interpret these thresholds as poverty lines
-families w/o any earners are especially at high risk of low income, especially if they are female and lone-parent
families
-many families move in and out of low poverty b/c of unemployment, reduced work hours, and episodes of poor
health
-larger portions of families and individuals go through one or more spells of low income over several years
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