Stratification and Class: Income Inequality

Abstract

Income inequality has been a central issue of social research for decades among political scientists, sociologists, economists, and policy analysts. Many factors have been investigated as the central cause for income inequality in the United States. Additionally, there has been a growing concern regarding the gap between the richest of the rich and the poorest of the poor. Understanding the process of, and the factors contributing to, income inequality and the growing disparity between the wealthy and the poor helps scholars better understand the adverse consequences of inequality for individual health and personal security.

Keywords Conflict Theory; Functionalism; Income Inequality; Synergistic Effect of Race and Gender; Social Stratification; Structural Inequality

Stratification & Class in the US > Income Inequality

Stratification & Class: Income Inequality

Overview

What is social stratification? How does income inequality contribute to stratification in the Unites States? Is stratification necessary for society to function?

These issues are of central importance to understanding the very nature of society and how individual opportunities are restricted or expanded based on their family status. Yet, many people are oblivious to how social stratification and income inequality influences their daily lives. Issues such as these fit into the broader study of social inequality, and more specifically, income inequality. They also shed light on the consequences of inequitable access to resources and how income inequality affects individuals, educational opportunities, job opportunities, advancement in employment, and living a long and healthy life.

Social stratification is the umbrella under which these concepts are united. In the United States, as is the case around the world, there is patterned inequality that divides society into categories in which there are disparities between access to social and economic rewards, with some people having more opportunity than others. Most scholars who investigate income inequality start from the foundation that there is social inequality that exists in the United States. This is attributed to variation in wealth, power, and prestige (Thio, 1992). Under the umbrella of scholarship on social stratification is one that focuses specifically on income as a primary factor that leads to differential opportunities and outcomes for members of society. Once thought of as a part of life (i.e., people are rich because they always have been, and the poor are poor because they don't work as hard), today many scholars are pointing to structural factors rather than individual choices as the major driving force behind social stratification, income inequality and the growing disparities between the rich and the poor. These scholars argue that inequality is not necessarily a function of society, but rather a result of institutional arrangements that perpetuate inequality from generation to generation.

The results of inequality have also garnered additional attention among sociologists, economists, political scientists, criminologists, healthcare, and social service providers. Social and income inequality are political issues that are gaining attention in the media, among the public and politicians.

Today there is still little consensus among these scholars regarding the causes and consequences of social inequality, income inequality, and ultimately the effects of inequitable opportunity on individual lives.

Theories of Inequality

There are many competing theories that attempt to explain income inequality on a national and international level. Most of these theories can be categorized into one of two theoretical camps: functionalism and conflict theory. The functionalist perspective asserts that inequality is a central component to the organization of society and serves a purpose in structuring social relationships. On the other hand, conflict theorists argue that income inequality is part of a socio-structural force lead by elites to increase their wealth and opportunity at the expense of the working and middle classes.

Functionalism

The theory of structural functionalism, coined by Davis and Moore (1945), asserted that stratification was necessary in society. The primary reasons given for their claims were that stratification serves a useful function of society. That is, not every job or task is equally important or desirable; these various tasks require different skills and therefore, in order to fill such positions there must be variation in the types of rewards given. Davis and Moore (1945) go on to explain that the function of stratification is to motivate the labor force in a highly competitive market and that without competition for higher pay (and thus, access to resources) it would be difficult to fulfill all of the needs of society. In other words, if a lawyer whose job requires extensive training and multiple degrees and the garbage collector were paid the same amount, nobody would want to collect the garbage or spend the additional time earning a law degree to become a lawyer. More specifically related to income inequality, Davis and Moore (1945) argue that the reason there is such a disparity in income between those at the top of the social ladder and those at the bottom is those at the top have more skills; and those at the bottom perform jobs that are less important than those at the top.

Conflict Theory

In a significant departure from structural functionalism, many scholars who adhere to the writings of Karl Marx regarding capitalism argue that inequality is not necessary, nor does it serve a pertinent function. Rather, as they see it, inequality is a symptom of societal dysfunction. Scholars such as Tumin (1953) claim that inequality provides opportunity to the privileged while at the same time limiting the possibilities for those in the working class. Moreover, it works to reinforce the status quo whereby the rich are able to secure their privilege in society and those who are less privileged are forced to work under the rules of the privileged. Finally, because of the disproportionate system of rewards, there is the possibility for those who are less privileged to become hostile to the status quo, resulting in crime or other acts of resistance.

Other scholars who subscribe to the ideas of Marx have further argued that income inequality is an unjust distribution of power whereby those who own large corporations and provide jobs to the working class have the ability to manipulate wages and perception of competition while preserving their status by exploiting others.

These two competing theories paint a very different picture of the factors that contribute to income inequality. Structural functionalists argue that inequality is a functional force in society that rewards those who do more meaningful work greater than those who do less important jobs. Conflict theorists argue that inequality is a result of larger socio-structural forces that manipulate those with the least power and privilege by promoting competition and controlling wages in favor of the wealthy.

Further Insights

Socioeconomic Factors & Inequality

Understanding the theoretical underpinnings of scholarship on social stratification and income inequality is only part of the vast work that has been completed on the subject. One of the most controversial aspects of inequality scholarship is the disparity not only between the rich and the poor but also the patterned inequality that has been shown to exist between whites and other racial groups, between men and women, and between those with low IQs (intelligence quotients) and high IQs, as measured on standardized tests.

The contributions of socioeconomic indicators such as race, gender, and IQ to social stratification and income inequality are central to scholarly debates surrounding the causes and correlates of various subgroups in the population and their social status. Scholars who study these issues often find themselves in the most heated social debates about the causes of inequality.

Race

The issue of racial inequality has been at the forefront of sociological scholarship for decades. There is a significant body of research that specifically focuses on the relationship between inequality and race. Most scholars agree that there is a disproportionate percentage of minorities in the lower income brackets (Wright, 1978; Zandvakili 1998; McLeod, Nonnemaker, & Call, 2004). However, this is where much of the agreement ends. A central focus of scholarly debate is on what causes income inequality between whites and minorities.

Wright (1978) asserts that one of the most consistent findings in sociological research is that black people have considerably lower incomes than white people, regardless of educational attainment or occupational status. Central to his research agenda is the rate of return for minorities and whites given their overall level of education. Much of this work is based on the notion that education is the great equalizer in American society and that meritocracy prevails in educational settings that favor those who work hard rather than those who have preexisting privilege. Following the work of Wright, additional scholarship has found that education does not in fact equalize opportunity among students, but rather inequality in education begins before students enter the classroom, much of which is due to race and class cleavages (Lee & Burkam, 2002).

Together, this body of research indicates that individuals of color are significantly disadvantaged with respect to earning potential, which consequently contributes to income inequality regardless of education or other "equalizing" factors often used by functionalists to justify why individuals are inequitably rewarded for their efforts.

Gender

Another central concern of sociologists is the differential pay and income inequality that exists between men and women. While early scholarship suggested this was simply due to women choosing to work in less prestigious sectors of the workforce, more attention has recently been paid to the differences between men and women who work in similar jobs in similar industries (Mount & Bennett, 1975; Zandvakli, 1998).

The work of Mount and Bennett (1975) was some of the first to investigate income inequality as a function of both social and economic indicators. These variables included gender as well as education, occupation, industry, and race. Their research yielded some of the most controversial information of the time, suggesting that education, occupation, and industry was less important in explaining income inequality between men and women than gender. This highlighted the notion that regardless of training or job, women made less money than men for no reason other than their sex.

More recent studies investigate the intersection of gender and assume there is a synergistic effect of race and gender, which predicts women of color are even more disadvantaged in the work place than white women (Zandvakili, 1998). Given the results of such studies, and the growing body of literature on gender and income inequality, there is growing support for conflict theories regarding income inequality in so far as it suggests that women, many of whom occupy just as prestigious and meaningful jobs as men and have desirable skill sets, are consistently paid less. This does not serve a function in society as Davis and Moore would suggest, but rather women appear to be inequitably rewarded for their performance as a result of discrimination, socio-structural forces, and stratification in the workplace.

Intelligence

Finally, one of the most controversial studies about the sources of income inequality was put forth by Herrnstein and Murray (1994) in their infamous book The Bell Curve, in which they argued that inborn intelligence was a more significant predictor of success (according to measures such as income) than social background or educational attainment; even more controversially, they suggested that there may be differences in average levels of intelligence between individuals from different races. Their analysis fueled blistering debates among scholars as to the psychological and genetic factors that may account for income inequality, individual success, and upward mobility. While the preponderance of work that has been done looking at IQ and income inequality since the release of The Bell Curve has discounted their findings, the notion that psychological and genetic factors play an influential role in shaping the life chances of individuals from different social classes and income brackets is still prevalent today.

The central arguments made by Murray, which have continued into his recent work, emphatically state that stratification, whether necessary or not, is a fact of life and that regardless of individuals' social positions, people are born with different abilities, as measured by IQ, and therefore are rewarded differently (Murray, 2002). For Murray, this "social fact" suggests that there is no need for policy change or political intervention to increase opportunities for the most disadvantaged, or to ameliorate the differences between the rich and the poor, as social and income inequality are merely part of social evolution.

The scholarship looking at socioeconomic indicators and income inequality suggest that there are far more complex phenomena that contribute to inequality than early social theorists may have expected. This body of scholarship continues to grow and branch off into various directions that include social, psychological, genetic, geographical, and environmental conditions that further contribute to income inequality.

Issues

Consequences of Income Inequality

In addition to looking at theories that attempt to explain the causes of income inequality and the relationship between inequality and socioeconomic indicators, it is important to look at the consequences of inequality on individual life chances. This scholarship includes in-depth analysis of the consequences of many different social problems. Here we will focus primarily on the literature that investigates health outcomes, and incarceration rates, and violent crime.

Health

Controversial twenty-first-century work focusing on the relationship between adverse health outcomes and inequality has focused on both domestic and international hypotheses as to how inequality contributes to individual health trajectories (Mellor & Milyo, 2001; Beckfield, 2004). Scholars in this area assert that income inequality has a direct causal relationship to individual health, including one's life expectancy and infant mortality. Beckfield (2004) specifically initiates a cross-national comparison of income inequality at aggregate levels and how the distribution of wealth impacts health. His findings strongly support the notion that there is a negative relationship between inequality and health outcomes, thus suggesting that scholars reconsider earlier theories of the impact of income inequality on individuals' life trajectories and policy positions related to aiding those who have the least access to resources. Meanwhile, David and Collins (2014) suggest that poor health and high infant mortality rates in disadvantaged groups may not only be due to poor access to health care, but also to the stress that people feel as a result of inequality itself. Tilleczek, Ferguson, Campbell, and Lezeu (2014) further explore the link between mental health and poverty in young people, finding that poverty and the resulting social marginalization can exacerbate mental health conditions, which can then cause the sufferer to disengage from education.

A central theme of these works suggests that income inequality has real consequences for those who are least fortunate and further suggests that something should be done to ameliorate some of the disparity, such that those in the lowest income brackets are not as disadvantaged with respect to life expectancy and infant mortality. This issue is important at the local, national, and international level of social policy development.

Crime

Another issue that is often associated with inequality is the problem of crime, violence, incarceration rates, and sentencing disparity between the rich and the poor. Much of the scholarship in criminology and criminal justice has explicitly described the empirical relationship between income inequality and disparities within nearly every facet of our criminal justice system. Two recent examples of work in this area is the scholarship by Arvanites and Asher (1998) and Fajnzylber, Lederman, and Loayza (2002). Each has investigated the positive relationship between income inequality and violent crime and incarceration rates.

Arvanites and Asher (1998) focus primarily on the direct and indirect effects of race and income inequality on imprisonment rates at the state level. Their research focuses on three distinct questions:

• Does income inequality and race correspond to imprisonment rates, regardless of crime?
• What is the magnitude of the direct and indirect effects?
• What is the magnitude of the relationship?

Their data suggest that race is a central factor in determining imprisonment rates. However, income inequality also played a major part in predicating the level of incarceration at the state level. More simply put, these researchers were able to disentangle the relationship between crime and incarceration and attribute that the majority of incarcerations can be traced back to the race of the offender and level of income inequality in the state.

Fajnzylber, Lederman, and Loayza (2002) focus on the impact of income inequality on violent crime. Their research attempts to answer several key questions regarding the robust nature of the relationship between inequality and violence in thirty-seven countries. Most notably, they focus on the degree to which income inequality (once standardized between countries) explains robbery and homicide rates and accounts for overall variation in crime. Using advanced statistical measures of income inequality most often found in macro studies of stratification, these scholars conclude that income inequality is in fact positively correlated to crime both within and between countries. That is to say, in countries where there is a large disproportion in income inequality, such as in the United States, there is a greater amount of crime. When there is less income inequality, such as the case in Norway, there is less crime.

Conclusion

Income inequality is a central topic of political, sociological, psychological, and economic scholarship. Many factors have been investigated that arguably contribute to income inequality in the United States. A growing body of scholarship has looked at the socioeconomic factors that contribute to the growing gap between the richest of the rich and the poorest of the poor. Additional work in this area has uncovered several important political and social consequences that are specifically related to income inequality, including variation in health outcomes, incarceration rates, and violent crime. More attention needs to be given to the factors that contribute to and result in the growing disparity between the rich and the poor.

Terms & Concepts

Conflict Theory: The Marxist notion that inequality is a function of the disjuncture between elites who own the means of production (or large corporations) and the workers, who are often exploited by elites to preserve the status quo and keep wages low and income inequality increasing.

Functionalism: The theoretical position that argues income inequality is a natural, necessary, and functional part of social relationships.

Income Inequality: The variation in income distribution between the upper, middle, and lower classes.

Synergistic Effect of Race and Gender: The sociological notion that race and gender together have a greater impact on individual life chances than either characteristic does alone.

Social Stratification: The general topic of sociological inquiry that looks at variation in rewards based on power, prestige, and wealth.

Structural Inequality: The notion that socio-structural factors such as policy failures relating to social service programs and housing as well as a dearth of decent paying jobs and adequate job training are the predominate causes of social and economic inequality.

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Suggested Reading

Bruch, E. E. (2014). How population structure shapes neighborhood segregation. American Journal of Sociology, 119, 1221–1278. Retrieved January 13, 2015, from EBSCO online database SocINDEX with Full Text. http://search.ebscohost.com/login.aspx?direct=true&db=sih&AN=96563773&site=ehost-live&scope=site

Lareau, A. (2003). Unequal childhoods: Class, race, and family life. Berkeley: University of California Press.

Pryor, F. L. (2012). The impact of income inequality on values and attitudes. Journal of Socio-Economics, 41, 615–622. Retrieved November 6, 2013 from EBSCO online database SocINDEX with Full Text. http://search.ebscohost.com/login.aspx?direct=true&db=sih&AN=82063396

Reiman, J. (2007). The rich get richer and the poor get prison: Ideology, class, and criminal justice (8th ed). Boston, MA: Allyn and Bacon.

Roberts, A., & Willits, D. (2015). Income inequality and homicide in the United States: Consistency across different income inequality measures and disaggregated homicide types. Homicide Studies, 19(1), 28-57. Retrieved January 21, 2016, from EBSCO online database SocINDEX with Full Text. http://search.ebscohost.com/login.aspx?direct=true&db=sih&AN=100097012&site=ehost-live&scope=site

Schein, V. (1995). Working from the margins: Voices from mothers in poverty. Ithaca, NY: Cornell University Press.