Poverty & the Economy
Poverty & the Economy
A love story?
Rupal Satra, MA
Doctoral Student
Department of Sociology
University of Illinois Chicago
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TODAY:
Characteristics of Poverty
Capitalist Economic System
The Link between the Economy and Poverty
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Characteristics of Poverty:
Defined as having insufficient resources to provide a minimum standard of living and being significantly worse off financially than the average person in one’s society.
It’s a lot more complicated!
Consists of multiple intersecting factors
Unequal distribution of wealth and income:
Wealth:
Income:
Characteristics of Poverty:
Rising gap between the “Haves” and the “Have-nots”
Intimately linked to government involvement (or lack of)
Fun Facts:
The US has the largest inequality gap between those at the top and those at the bottom of any developed nation:
Just for Kicks:
Where does the money go?
Fun Facts:
Between 1973-2000, the top 5% of American families saw their share of income go up almost 30% while the bottom 40% saw their share drop 17%
What happened to the trickle down?
Explanations of Inequality:
Globalization
Industrial to Service-based Economy
“Race to the Bottom”
Invention and use of technology
Politics
“Reaganomics”
Reduced Government Expenditures
Capitalism:
An economic system characterized by the following:
Private Ownership and Individualism
The individual can own anything
Main drive is to generate personal profit and wealth
Competition and Consumer Choice:
Free market System Laissez-Faire
“Invisible Hand”
Consumers guide
Government Distorts
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Capitalism in the US:
Not truly a capitalist nation government plays a large role in the economy.
Owns and operates number of businesses including roads, schools, parks, etc
Uses taxation and other forms to influence what companies produce, to control the quality and cost of merchandise, etc.
Sets minimum wage, enforces workplace safety standards, regulates corporate mergers, student loans, etc.
Friends and Foes of Capitalism:
Corporations: Friend or Foe?
An organization with legal existence including rights and liabilities from that of its members.
Corporation as Natural Persons:
1869 and 2009 Supreme Court Ruling
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Friends and Foes of Capitalism:
Corporations: Friend or Foe?
Implications: Corporations have the right to influence the government in their own interest as extended to individual citizens.
Where do we see it?
Political Campaigns
Political Lobbying
Mass Media
Main Point: Increased power to create more money
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Friends and Foes of Capitalism:
Labor Unions: Friend or Foe?
Organizations that seek to improve wages and working conditions through various strategies including negotiations and strikes.
Protect workers’ rights
Capitalism = anti-labor unions
Threatened by cheap labor
Union Busting
Case Study: Wisconsin Governor
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Takeaway Points:
Poverty is not an accident linked to capitalist economic system
Whose who control the wealth make the rules (so to speak)
Those same people work hard to maintain the system
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Open system & achieved status
Remember:
Achieved status refers to a social position that a person attains largely through personal effort.
Ascribed status refers to a social position assigned to a person by a society– “born with it”.
Social mobility, then, is likely to be found in societies that emphasize achieved status.
Does this truly exist? Think about the idea of the American Dream.
Social Mobility & Capital: Economic
Poverty
Minimum wage vs. livable wage
Social Capital
The central premise of social capital is that social networks have value.
Networks refer to the collective value of all “social networks” [who people know] and the inclinations that arise from these networks to do things for each other [“norms of reciprocity”].
It is all about social cohesion which improves chances for better health outcomes.
Cultural Capital
Knowledge of “higher culture” that facilitates acceptance into higher status groups.
Improves chances of better education and employment opportunities
SOCIAL AND CULTURAL CAPITAL IMPROVE OVERAL LIFE CHANCES!!!
