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Economic Inequality

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Chapter 2: Class, poverty, and economic inequality Learning objectives - To understand the sociological concept to social class and inequality - To describe the difference between absolute and relative poverty - To discover different measures of poverty, including LICOs and the poverty line - To examine poverty and income inequality in Canada and around the world - To recognize the concentration of wealth that exist in capitalist societies today - To see how social inequality is related to other social problems - To know the effect of poverty on children, youth and the elderly - To understand homelessness and urban poverty, and their effects on health - To learn about different theoretical perspectives on economic inequality - To examine various solutions to the problems of poverty and economic inequality Introductions - Economic inequality are the large differences in income and wealth between individuals and groups within a society; differences in the economic power of nations - Poverty and inequality are important social issues - Takes sociological imagination to connect poverty and inequality and to issues of ideology, governance and power Marx provided the sociological imagination with the developing notion of social class o Sociological imagination is a term used by Mills in his 1959 book, the Sociological Imagination, that describes the sociologists ability to connect seemingly impersonal and remote historical forces to the most basic incidents of individuals life; sociological imagination allows people to distinguish between personal troubles and public issues - People organize according to their relationship to the means of production - Those who own the means control the jobs - The proletariat has to sell their labor to the capitalists in order to survive - The capitalists to maximize the profits, pay the proletariat as little as possible and sell their products for as high price as possible - Marxs binary is fundamental to social relations, as people are locked in constant battle - Classes are groups of people who share a common economic condition, interest and for Marx, the relationship to the means of production - For Marx the relation to the means of production is central www.notesolution.com o While capitalists maximize their profits, the proletariat struggle and through unions, co- operatives, legislation and other means improve their wages, working conditions, job security, and the prices they have to pay for food, shelter, etc - People in the same relation to the means of production have an interest in banding together o For this to happen people in a class must develop an awareness of their common interests, commit themselves to working toward a common goal and come to see individual well-being as connected to collective well-being This is the development of class consciousness and class awareness - Capitalist systems have the tendency to produce monopolies of wealth and increasing inequality, globalization and imperialism, overproduction and recurrent financial crisis those at the bottom will do almost anything to survive - Owners may take steps to prevent the betterment of the proletariat by different means o Prevention of unions and discussions of problems o Legislation sympathetic to the owners - Workers themselves may be reluctant to unite around a common cause due to R&E differences - Workers may suffer from false consciousness whereby they come to accept the discourse the values of the dominant class, and thus a willingness to believe arguments that promote individualistic solutions to problems, or to blame the poor and the unemployed for their problems - Workers may be alienated from politics and each other, thus they cannot put their trust into unionization and class conflict - Workplaces are contested terrains where the classes meet and struggle for control - Over through of capitalism by communist (egalitarian) society o Critical to this class consciousness and awareness o Oppressed classes can only bring about change after becoming aware of their relation to the ruling class and their historic roles o How should the proletariat organize? o What kinds of revolutionary strategies are likely to succeed? o What stand in the way of success? - Today Marxs view is to simplistic o (1) It is no longer necessary to own a business to own the means of production o (2) Working class is international unification is even more difficult - Are inequalities based on different values we, as a society, place in different jobs and social roles? www.notesolution.com o Functional theory of stratification maintains that most people in industrialized and developed societies agree about the relative social value or particular roles Therefore they agree that some people should receive more money than other Example: doctor versus used cars salesman Easier to replace the salesman More reward for doctors to ensure continued flow of medical training o This view is supported by the relative social value and stability of occupational prestige o This theory fails to address a number of facts Cannot explain why the differences between the top-paid and low-paid are narrow or wide why in some capitalistic societies they are relatively narrower than others? Why do some people get a lot of money without providing any benefits for the society Example: actors, sport stars, criminals, band executives There might be disagreement within society which roles are important Ignores inheritance of wealth and status - Not all inequality is due to Marxs vision of exploitation o Unregulated market forces o Tax structure o Connection between the ruling class and the rich - Marx all classes rest on inequality all inequality rests on differentiation - Not all differentiation lead to inequality - Inequality does not necessary result in class formation - For revolutionary purposes, class formation required class consciousness, which depended four changes in the thinking of the working class o (1) Identification of being a member of an exploited class o (2) Seeing the owners of production as their enemies o (3) Everything is at stake in the battle for equality o (4) Social change is possible through conflict - Social mobility is the movement of individuals from one social class to another during the course of ones life time o Professions of engineering, law, management and accounting are especially good for this www.notesolution.com o There is little change of entering the top 1% from the bottom o Little change of escaping the bottom 1% o In the middle 80% there is a lot of mobility o Movement upward is largely due to good education o Educated people have more diverse social networks Measuring poverty - People who live in poverty live below the average of living, poverty can be viewed as absolute or relative - Absolute poverty is the lack of basic necessities (food, shelter, medicine) for basic survival; starvation is an example of absolute poverty - Relative poverty is survival, but far below the relative standards of the societal group in which the poor lives - In practice dealing with poverty is difficult, measuring it is not straight forward - Poverty line represents a usual standard of living and differs across countries; definition of poverty varies by society, within societies and also over time o Elastic, responds to changes in real income and advocates fighting to increase social welfare by redefining or re-measuring poverty - Until recently Statistic Canada relied on LICOs and LIMs - Low-income cut-offs is a formal definition used by Statistics Canada for measuring relative poverty based on the % of income devoted to daily necessities (food, shelter, clothing) and determined both regionally and by population size (city, rural) o LICOs are not poverty lines o They are income thresholds, determined by analyzing family expenditure data, below which families will devote a larger share of income to necessities o Taking account for different prices of necessities and family size, LICOs are defined for five categories of community size and for seven of the family size o LICOs vary according to the area and the size of the family o LICOs are higher in a large city than a small one and for a large family rather a small one o In a city of 500 000 of more, an average family spends 35% of income on necessities, if a family spends more than 55% then family is considered low income - Low income measures is a set of figures representing 50% of the median adjusted family which is based on a consideration of different needs of families of different sizes; actual incomes are compared with LIMs to determine whether a family can be considered low income
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