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Chapter 2

Reading for Week 2. Book: Social Problems, Chapter: 2

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Chapter 2: Class, Poverty, and Economic Inequality
Economic inequality; large diff in income and wealth across individuals and groups within society and
diff in economic power of nations.
Marx’s Theory (not yet known as Conflict Theory)
Connection of inequality and poverty was given by Karl Marx by developing the notion of social class.
Classes, groups of people who share a common economic condition (or relationship to the means of
production). Two classes; those who own the mean of product and those who work for it. (have and have-
nots are forever locked into conflict)
Relationship to the means of production. One class tries to maximize profit, by increasing price and
lowering cost of labour, both of which make workers struggle, which causes the creation of unions, co-
operatives, to improve their wages, work conditions. Hard to create useful unions. Employers will prevent
their formation and the government will be biased towards the capitalists. Workers will lose trust w/ their
own unions. Disagreements between union leaders and workers, workers feel alienated, etc. Workplaces
are contested terrains where there is a struggle for control.
Marx promoted his view on the issues and pushed to overthrow the capitalist regime and create
communism. His idea dealing with (1) the working class and (2) the production controllers is too simple
for todays complex intermixing of business and international trade relations. Works better for an
industrialized society.
Functional Theory of Stratification (Davis and Moore)
For today; some agree w/ Davis and Moores ‘functional theory of stratification placing different values
on certain jobs and roles in society (reward doctors more than clerks, since they are indispensible to us).
The value placed on diff roles varies according to society due to their position in industrialization,
technology, etc. In all these values depend on shared values of the population to place more value on diff
roles. Theory fails to consider several facts, range in salaries is wider than in other countries than in US or
Canada, why do movie stars, sports stars, executives get huge salaries? Not all inequality is due to Marxs
Not all social differentiation leads to inequality, in turn leading to class formation. It require from
workers: (1)selfidentification as members of an exploited class, (2) owners of product. are their enemies,
(3)everything at stake in battle for equality, (4)societal change is possible through conflict.
Social mobility (movmt of individuals from social classes) is possible under the correct circumstances,
yet it has its limits (bottom 1% -> top 1%). There is certain mobility in the middle 80%, even more with
possibility of higher education.

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Measuring Poverty
View poverty in two terms:
Absolute, do not have enough to survive, lack of basic necessities for survival, ei: starvation
Relative, have enough to survive, but living standards are far below the general living standards of their
Poverty line is elastic; usual standard of living differs across countries. Defnt of poverty changes by
society and with time.
Statistics Canada has three ways:
(1)Low income Cut Offs (LICOs). Based on the % of the income that is determined for shelter,food
and clothing for a specific size of family. Exists 5 categories of community size and 7 of family
size. if below the specified %, low income.
(2)Low income Measures. A # representing ½ of the median adjusted’ family income, the # varies
according to family size (adults, children)
(3)Market Basket measure. Imaginary basket of marked-priced goods and services and the income
needed to purchase this basket.
Measuring well being and inequality
Poverty doesnt tell us much about the well-being of the pop. Social and economical progress through
HDI. Measures basis of achievement in three areas:
(1)Life expectancy (long healthy life)
(2) Literacy (knowledge)
(3) GPD per capita (standard of living by natural log of GDP)
For highly development countries all measure really high, therefore apply HPI(human poverty index);
measuring deprivation of the above three (considering the negative[deprvtn]):
(1)vulnerability to premature death (likelihood to die before 60)
(2)exclusion from reading and communications (adult illiteracy)
(3)deprived standard of living (% of pop below poverty line)
Canada is ninth, suggesting high average standard of living, however not equally distributed among all
classes. Gini coefficient(measure of income inequality); 0 (income equality) is $10 for 10, 1(total income
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