Social Stratification in the US: Crash Course Sociology #23

Summary

This Crash Course Sociology episode delves into social stratification in the United States, focusing on income and wealth inequality. It explains the disparity between quintiles, with the top 5% earning a significant portion of total income. The video distinguishes between income and wealth, highlighting the negative wealth of the bottom quintile due to debt. It also addresses the impact of historical practices like redlining on racial wealth gaps. Further, it discusses the influence of wealth on political power and the role of occupation and education in shaping social status. The episode concludes by questioning the meritocratic nature of the US, noting how socioeconomic status is influenced by both individual efforts and inherited advantages.

Takeaways

• 📊 Max Weber identified three dimensions of social stratification: economic class, social status, and power.
• 💼 In the US, income inequality is evident with the top 20% of households earning about 50% of all income, while the bottom 20% earn only 3.4%.
• 🏦 Wealth is distinct from income and is even more unequally distributed, with the top quintile having an average net worth of $630,000 compared to the bottom quintile's negative $6,000.
• 🏠 Homeownership is a significant source of wealth in the US, with racial disparities impacting wealth accumulation due to historical practices like redlining.
• 🌐 Wealth levels vary by demographic groups, with White households having a median wealth 12 times that of Black households.
• 💵 The top 1% of wealth holders have a net worth cutoff of $2.4 million, indicating extreme wealth concentration.
• 🗳️ Political power is correlated with income level, with the wealthy having a significant influence on laws passed, according to a study by Gilens and Page.
• 👨‍💼 Occupation plays a role in social stratification, with 'occupational prestige' being a measure that ranks jobs like surgeons and college presidents highest.
• 🎓 Education level is a key determinant of social status, with advanced degrees often required for the most prestigious and highest-paying jobs.
• 👶 Socioeconomic background and race significantly impact educational attainment, with stark differences in college degree attainment rates across ethnic groups.

Q & A

What are the three dimensions of social stratification introduced by Max Weber?

Max Weber introduced three dimensions of social stratification: economic class, social status, and power.

How does income inequality manifest in the United States according to the script?

Income inequality in the United States is shown by dividing the population into quintiles, with the top quintile earning about 50% of all income and the bottom quintile earning only 3.4%.

What is the difference between income and wealth as discussed in the script?

Income refers to money earned from work or investments, while wealth is the total value of money and assets like real estate, stocks, and bonds that one holds.

How does the script illustrate the wealth gap between different quintiles in the United States?

The script illustrates the wealth gap by stating that the average net worth for the top quintile is $630,000, while the bottom quintile has an average net worth of negative $6,000 due to debt.

What is the impact of homeownership on wealth accumulation in the United States as mentioned in the script?

Homeownership is a major source of wealth for Americans, and the script notes that White Americans are more likely to own houses and live in wealthier neighborhoods, contributing to racial wealth inequalities.

What historical practice is discussed in the script that affected wealth accumulation for African-American families?

The script discusses 'redlining,' a practice where banks refused loans to residents of certain neighborhoods, often minority areas, making it harder for African-American families to accumulate and pass on wealth.

How does the script link income to political power in the United States?

The script links income to political power by referencing a study that shows the views of those at the top of the income distribution have a significant relationship with laws getting passed, while those in the middle have almost no correlation.

What is the concept of 'occupational prestige' as explained in the script?

Occupational prestige refers to the social ranking or esteem given to different occupations, with jobs like surgeons and college presidents being highly prestigious, and jobs like busboys and telephone solicitors being less so.

How does education level influence social stratification in the United States according to the script?

The script explains that education level is a significant factor in social stratification, with higher education often leading to higher occupational prestige and income, and disparities in educational attainment existing across income, race, and ethnicity.

What role does merit play in determining socioeconomic status in the United States as discussed in the script?

The script suggests that while the United States has elements of a meritocracy where talent and effort influence social position, many factors such as the status one is born into also play a significant role in socioeconomic status.

How does the script suggest that inequalities are reproduced across generations?

The script indicates that inequalities in one generation, such as income and education, often lead to further inequalities in the next generation, as children born into low-income families start school behind their peers and these gaps widen over time.

Outlines

00:00

💼 Income and Wealth Inequality in the United States

This paragraph delves into the economic aspects of social stratification in the United States, focusing on income and wealth disparities. It introduces the concept of quintiles to illustrate the distribution of income, with the bottom quintile earning less than $22,800 annually and the top quintile making over $117,000. The summary highlights the stark differences in income shares, with the top quintile earning about 50% of all income and the top 5% alone earning 20%. Wealth is distinguished from income and is shown to be even more unequally distributed, with the bottom quintile having negative wealth due to debt. The top quintile's average net worth is a staggering $630,000, contrasting sharply with the bottom quintile's negative $6,000. The paragraph also touches on the historical practice of redlining, which has contributed to racial wealth gaps, and the influence of wealth on political power, as demonstrated by a study showing the correlation between the views of the wealthy and the laws that are passed.

05:01

🎓 Factors Influencing Social Stratification Beyond Income

The second paragraph broadens the discussion of social stratification to include factors beyond income and wealth, such as occupation, education, and the concept of prestige. Occupation is highlighted as a significant determinant of socioeconomic status, with a ranking system for 'occupational prestige' established by the National Opinion Research Center. The paragraph notes the correlation between prestigious jobs and advanced degrees, as well as the financial benefits associated with such positions. Education level is shown to be a key factor in social status, with varying attainment rates across different racial and ethnic groups. The paragraph concludes by addressing the debate on the merits of inequality, suggesting that while some level of inequality may be justified by individual effort and talent, much of socioeconomic status is determined by factors outside of an individual's control, such as birth circumstances. It also points out the challenges faced by those from lower-income backgrounds in achieving social mobility, and the role of societal structures in perpetuating these inequalities.

Keywords

💡Social Stratification

Social stratification refers to the division of a society into distinct layers or strata based on factors such as wealth, power, and prestige. In the video, it is discussed in the context of the United States, where it is shown to be influenced by economic class, social status, and power. The video explores how these factors interact and manifest in real-world scenarios, such as income and wealth disparities.

💡Economic Class

Economic class is a stratification based on an individual's or household's income level. The video uses the example of quintiles to illustrate this concept, showing that the bottom quintile in the US earns significantly less than the top quintile, highlighting the income inequality within the country.

💡Social Status

Social status refers to an individual's position within a social hierarchy, often determined by factors such as occupation, education, and wealth. The video discusses how social status can influence one's life chances and how it is reflected in the prestige associated with different occupations.

💡Wealth Inequality

Wealth inequality is the unequal distribution of assets among a population. The video provides stark figures on wealth disparities, noting that the top quintile of US households has a significantly higher average net worth compared to the bottom quintile, which may even have negative wealth due to debt.

💡Income Inequality

Income inequality is the uneven distribution of income among a population. The video uses the quintile system to demonstrate this, showing that the top 5% of earners in the US take home a large portion of the total income, while the bottom quintile earns a very small percentage.

💡Occupational Prestige

Occupational prestige is the perceived social standing or esteem associated with different jobs. The video mentions a ranking created by the National Opinion Research Center, which assigns a prestige score to various occupations, indicating how social status is tied to one's profession.

💡Educational Attainment

Educational attainment refers to the highest level of education a person has achieved. The video discusses how education levels are linked to socioeconomic status, with higher levels of education often leading to higher occupational prestige and income.

💡Meritocracy

A meritocracy is a system where social status is determined by individual merit or achievement. The video touches on the idea that the US partially operates as a meritocracy, rewarding hard work and skill acquisition, but also acknowledges that many factors, such as birth circumstances, can limit social mobility.

💡Redlining

Redlining is a historical practice where banks would refuse to provide loans to residents of certain neighborhoods, often those inhabited by minorities. The video explains how this practice contributed to wealth disparities and neighborhood segregation, impacting the ability of African-American families to accumulate wealth.

💡Political Power

Political power refers to the influence one has over political decisions and policies. The video cites a study that shows a strong correlation between the political views of the wealthy and the laws that are passed, suggesting that income level can significantly impact political influence.

💡Demographic Groups

Demographic groups are categories of the population that are defined by characteristics such as race, gender, and age. The video discusses how these groups can experience different levels of social stratification, with disparities in wealth, income, and educational attainment often correlating with demographic factors.

Highlights

Max Weber’s three dimensions of social stratification are economic class, social status, and power.

In the US, income inequality is a key indicator of social stratification.

As of 2015, the bottom quintile of US income distribution earns less than $22,800 a year.

The median household income in the US is about $56,000 a year.

The top quintile of US households makes over $117,000 a year.

The top quintile earns about 50% of all income in the United States.

Wealth is distinct from income, representing the total value of one's assets and debts.

For the bottom quintile, average household wealth levels are negative due to debt.

The top quintile's average net worth is $630,000, significantly higher than the median.

Wealth levels vary by demographic group, with women and minorities often having less wealth.

Homeownership is a major source of wealth in the US, with racial disparities in homeownership rates.

Redlining, an outlawed practice, has historical impacts on racial wealth inequality.

Wealth influences not just economic class but also political power.

A 2014 study shows a significant correlation between the views of the wealthy and laws passed.

Occupational prestige is another dimension of social stratification, influenced by income and education.

Educational attainment is linked to socioeconomic background and varies across racial and ethnic groups.

Inequality can be seen as a result of meritocracy, but also influenced by factors beyond individual control.

Socioeconomic status is often reproduced across generations due to early life circumstances.

Understanding the causes of inequality across demographic groups is a key question in sociology.

Transcripts

Last week, we introduced Max Weber’s three dimensions of social stratification: economic class, social status, and power.

But how do those three things actually interact, in the real world?

What does social stratification look like in the here and now?

Or, I guess I should say, what does stratification look like in the United States right now?

For all the non-Americans watching, don’t you worry – we will be getting to stratification around the world later.

But for today, we’re gonna focus on the United States and how social inequality plays out here.

Do we live up to the ideals that Jefferson laid out in the Declaration of Independence?

Are all men created equal?

Spoiler alert: Sociology says, not so much.

[Theme Music]

When you hear people talking about inequality in the US, chances are they’re talking specifically about income inequality or wealth inequality.

So let’s start there.

First, we’re gonna split the US into 5 even groups, 20% of the population in each.

These are what social scientists call quintiles.

As of 2015, households in the US that make less than $22,800 a year are the bottom quintile of the income distribution.

The exact middle of the distribution, or the median of household income, was about $56,000 a year.

And the top quintile?

That’s every household making over $117,000 a year.

Now, the simple fact that these quintiles have different incomes tells us that we don’t have a perfectly equal society.

Perfect equality would mean the same income for everyone.

So, there’s clearly some income stratification in the US.

But how much?

The households in the top quintile earn about 50% of all the income in the United States.

And about 20% of all income is earned by the top 5% alone.

And the bottom quintile?

These households earn only 3.4% of the total income in the US.

Those are pretty huge differences!

And they get even bigger when we talk about wealth.

First things first: Wealth is NOT the same thing as income.

Income is the money you earn from work or investments,

whereas wealth is the total value of the money and other assets you hold, like real estate and stocks and bonds.

For the bottom quintile, average household wealth levels are negative.

That’s because part of wealth is debt – so if you have more debt than positive assets, your wealth is negative.

So we’ve got an average net worth of about negative $6,000 for the bottom quintile and a median household wealth level of about $68,000.

Any guesses what the top might look like?

Well, the top quintile’s household income was about twice the median income.

So, maybe a good guess would be about what? $140,000 for wealth?

Wrong. The average net worth for those in the top quintile is 9 times that of the median – $630,000.

And that’s not even close to the wealth levels for the top 1%.

According to the US Census Bureau, the cut-off for entering the top 1% of the wealth distribution is $2.4 million.

Wealth levels also tend to vary by demographic group.

For example, women tend to have lower individual wealth levels than men.

Married couples accumulate more wealth than people who are unmarried.

And race and wealth are closely linked – the median wealth level of a White household is about 12 times that of a Black household.

One of the main sources of wealth for Americans is homeownership.

White Americans are much more likely to own houses than Black Americans,

and the neighborhoods that White Americans live in tend to be wealthier – even if you control for income.

Patrick Sharkey, an American sociologist who researches neighborhoods and wealth,

found that black families making $100,000 a year live in the types of neighborhoods that a white family making only $30,000 would live in.

So, where are these gaps coming from?

Well, for one thing, a lot of wealth is passed on through generations.

Let’s go to the Thought Bubble to talk about redlining,

a practice from the not-so-distant past that has made it harder for African-American families to accumulate and pass on wealth.

In the 1930s, the government founded the Federal Housing Agency,

an office set up to regulate mortgages and interest rates, to guard against the types of foreclosures that happened during the Great Depression.

The FHA began insuring mortgages, and since these mortgages were backed by the government,

they made getting a house less risky and easier for many Americans.

Which is great!

Except they didn’t make it easier for all Americans.

The big banks that issued the loans engaged in a practice called redlining,

in which they’d literally draw a red line line on a map around neighborhoods they considered too risky to invest in.

If your house was within that red line, the banks wouldn’t give you a loan.

And the neighborhoods that got redlined were the ones where minorities, particularly Black families, lived.

Redlining was outlawed in 1968,

but because homeownership is the major source of wealth for most Americans,

neighborhood segregation and racial wealth inequalities are the legacies of policies like redlining.

Thanks Thought Bubble.

OK, so on the money front, the US isn’t looking all that equal.

And money – particularly wealth – doesn’t just influence economic class.

It’s also a form of power, including political power.

A 2014 study by American political scientists Martin Gilens and Benjamin Page

looked at the relationship between the political views of those at the top of the income distribution, and the laws that are actually passed.

They found that the views of those at the top have a significant, positive relationship with laws getting passed,

while the views of people at the middle of the income distribution have pretty much zero correlation with what laws actually get passed.

But remember: Correlation doesn’t mean causation.

The study doesn’t tell us WHY higher income is related to more political influence.

The economic elite’s influence could come through donations to political candidates.

But higher income is also correlated with higher education levels – and more highly educated people tend to be more civically active, too.

Now, there are many factors besides income and wealth that influence social stratification in the US.

For example, there’s occupation.

If you’re an adult, probably the first question that people ask you is, “What do you do?”

That’s because the jobs we do – and what other people think of those jobs – are a major part of our socioeconomic status.

You probably have opinions about what jobs are cool, what jobs are impressive – and what jobs you’d never work at.

Those kinds of opinions are what the National Opinion Research Center, a think tank at the University of Chicago,

was interested in when they created a ranking of ‘occupational prestige.’

Top of the list?

Surgeons, College Presidents, Lawyers, Nuclear Physicists, Astronauts.

Smack dab in the middle, getting an average rating of 5, are jobs like Purchasing Managers, Office Supervisors, IT technicians, Private Detectives.

That’s right, all you office managers out there, you are just as cool as Veronica Mars.

And the bottom of the list are jobs like busboys, parking lot attendants, and telephone solicitors.

You might notice there’s some similarities in the types of jobs in each category.

For one thing, jobs with occupational prestige typically pay pretty well.

We have overlapping spheres of stratification here – you get social and financial benefits from being a lawyer.

Busboy? Not so much.

The other thing you might notice is that all five of the most prestigious jobs require an advanced degree.

And not just a college degree – people in those jobs typically have some sort of post-grad education as well.

The jobs at the bottom of the prestige scale, however, don’t require a college degree, and many don’t even require a high school diploma.

So the kind of education you have ends up being pretty important for where you end up in terms of social status.

Most American adults have a high school diploma – about 88% as of 2015.

But only 33% of Americans over the age of 25 have a bachelor’s degree, and even fewer – 12% – have an advanced degree.

And the issue of who goes to college is strongly related to your socioeconomic background.

For kids born in the 80s, 54% of those born in the top fourth of the income distribution have a four-year college degree.

For those born in the bottom fourth, only 9% do.

As with wealth inequality, race and ethnicity are also linked with educational attainment.

22% of African Americans and 16% of Hispanic Americans have a four-year degree,

compared to 36% of Non-Hispanic White Americans and 53% of Asian Americans.

Now so far, all I’ve done is give you about a bunch of descriptive data about income,

occupations, and education in the United States that shows you that, yes, there is inequality in the United States.

But how should we think about inequality?

Is it good or bad?

You can argue that inequality isn’t, in and of itself, a bad thing.

Some jobs are harder than others.

Doctors take on many years of education so that they can save lives.

And I’m perfectly fine with heart surgeons getting paid more than I am.

And it’s probably good to live in a society where working hard and learning skills that benefit other people is encouraged.

This is the idea of a meritocracy – or social stratification based on personal merit.

The US is partially a meritocracy – social position does to some extent reflect individual talent and effort.

But a lot of socioeconomic status is also due to something outside of your control – the status you’re born into.

If you start out on the bottom of the ladder, the likelihood that you’ll get to the top is low.

The environment you’re in during the early years of your life shapes your ability to succeed as an adult.

There’s a large body of research that suggests that kids born in low-income families start school behind their peers, and those gaps only get wider as kids get older.

Inequalities in one generation are often reproduced in the next generation.

And as we’ve noted throughout this course, race and gender are closely linked to social status.

There are lots of factors that play into these inequalities across groups –

differences in education levels, differences in family composition, differences in occupation choice.

Understanding why we see these inequalities across demographic groups is one of the foundational questions of sociology.

And: that’s something we’ll be exploring more in later episodes.

Today, however, we talked about five ways that social stratification plays out in the US:

income inequality, wealth inequality, political power, occupational prestige, and educational attainment.

We discussed descriptive data about inequality in the US and how it varies across race and gender.

And finally we talked about the relative role of merit in determining your socioeconomic status.

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