is currently a problem that alarms sociologists and economists alike because of the recent sharp reversal of the trend toward the equalization of incomes that had been in effect throughout the greater part of the last century (Heckman & Krueger, 1). Part of what is responsible for this is the sudden increase in wealth that has occurred within the technology age (Cornia & Court, 17). What has been noted throughout is the fact that social status tends to be passed on from parent to child in such a rigid manner that it proves extremely difficult for a child to escape the economic status of a parent.
This stickiness of class has the ability to replicate itself because of certain societal norms that transcend merit and reward things other than hard work. The exploration of these causes and sources will give insight into precisely how and why the income gap continues to widen, and who benefits from this trend. The pervasiveness of the social inequality that plagues this country has been thoroughly demonstrated through a 20th century study that included two young boys of similar IQ and early educational experiences, but with different socio-economic backgrounds.
The study, done at Carnegie and published in Educational Researcher, demonstrates how the successive alternatives of persons starting out similarly are influenced by the backgrounds and positions of their families. Therefore, the son of a lawyer who starts out at precisely the same intellectual level as the son of a custodial assistant will have a 27 times greater chance of getting a job that will earn him a top-ten income by is middle ages (de Lone, 28-29). Alarming is the fact that this situation has worsened since the publication of that study.
In the mid-1970’s, the income of the top one percent of the population was 31 times that of the poorest and four times that of the median. Today, the income of the top one percent is 55 times that of the poorest and six times that of the median (Kearl). Researchers and social critics have termed this phenomenon the institutionalization of inequality, and the discussion of this has brought to the fore the unequal compensation being granted to persons for their contributions to society. Such criteria that are used to determine the worthiness of persons for adequate compensation are ethnicity, gender, religion and even age.
Social stratification perpetuates the existence of these categories, and rewards are given in the Weberian form of wealth, prestige, and the power to coerce others into creating even more wealth for the given individual (Kearl). These trends are also evident in countries across the world (Cornia & Court, 7) The recent upsurge in stock market gains has been cited as a main reason for the increase in the income gap within the United States (Berliner; Cornia & Court, 12). It is a fact that a much larger number of wealthy people own stocks than the poor.
Furthermore, high executives are often remunerated in the form of stocks and options (rather than cash). Since the stock market has been doing well, the wealth gained from these has been going into the hands of those who own them: the rich. The breakdown of this is that, while in the 1970’s compensation given to executives was 30 times as large as the average employee, twenty years later, the compensation of the executive had risen to 116 times that of the average employee (Berliner). Therefore, while overall the economy has boomed, most of the wealth gained has been concentrated in the hands of the rich.
While incomes have also increased at the lower ends of the economic spectrum, the incomes at the higher, executive end have increased at a far greater rate. Yet, this does not really address the issue of the pervasiveness of a family’s socio-economic status from one generation to the next. One trend that affects this issue has to do with marriage, which occurs at the initial stages of any family. While it might be considered that a two-income household is better off than a one-income household, this may not be the case at all times.
In fact, marriage tends to widen (rather than narrow) the economic gap simply because persons tend to marry others who have attained (or been handed) a status in life that is similar to their own. Therefore, when one low-income earner marries another low-income earner, the family earnings created doubles the gap problem when compared with a professional income earner who marries another professional (NCPA). The education level of the heads of families has a great deal to do with the social mobility of the family not just in that generation but in subsequent ones as well (Cornia & Court, 13).
It is known that in 1990, of the portion of the population that resided in the lowest fifth income bracket, approximately 43 percent of them had attained less than a high school diploma. The proportion of these families that contained no wage earners at all was similar to this (NCPA). It has also been shown that the trend continues today, and from this it is possible to learn that those persons of low education levels find it hard not only to support their families, but to finance higher education for their children.
Furthermore, children cannot hope to receive much homework help from parents who have never attained the grade levels that may currently be tackling. Since these parents are also likely to have tremendous difficulty paying for tutoring for these children who struggle with academics, the likelihood becomes greater that such children will end up failing and perhaps prematurely terminating their education. The converse of this is also true. Persons with high incomes, such as professionals and business owners have the education and the resources to ensure their children’s optimal performance in school.
Furthermore, these persons also have connections that are likely to speed up the time taken for their children to become embedded in the corporate world. These parents may even own businesses that are waiting to accept these children as workers (or executives) once their education is complete. Coupled with the fact that education in technology is also expensive and high technology earning has contributed greatly to the income disparity of today’s age (Cornia & Court, 17), it becomes clear that the possession of wealth leads to further acquisition of wealth.
Issues such as these lead to the perpetuation of poverty in this country and around the world. Karl Marx’s view of the struggle between the nobility (business class) and the proletariat (working class) still holds some weight in the 21st century. Despite the fact that revenue and profits have been rising at a significant rate, the amount of this increase that executives are willing to pass on to low-level workers is minimal (Cornia & Court, 12).
This reflects the Marxist idea of the wealthy fighting against the working class; that is, taking advantage of their labor and remunerating them in a manner inconsistent with the wealth their work has provided. However, to a certain extent, the struggle between these two classes, as depicted by Marx, has been muted in today’s world, and this is largely as a result of the stratification of society that places several levels of income earners between the highest and the lowest.
Therefore, there exists a greater possibility for the working class person to rise gradually up the ranks and improve his/her social condition (NCPA). Max Weber’s view that social and economic inequalities arise from power, prestige and wealth does also hold in today’s society. The persons who earn the highest incomes (such as business owners) do so because they have the power to exert influence over the working class. The influence often exists in the business owners’ ability to offer wages to these workers.
The workers in turn create more wealth for these owners, which in turn increases the power they possess within the society. Prestige comes precisely from having the ability to command large numbers of subordinates. It also comes from having the financial resources to afford visible affluence, such as luxury mansions, cars, as well as such exotic possessions as yachts and private jets. The problem of rising inequality in the United States and around the world seems, on the surface, to conflict with the fact that overall increases are being experienced in the economy.
Yet, not only are the rich getting richer much more quickly than everyone else, but the socio-economic status of families seems to be pervasive, carrying on generation after generation. The privileges, power, and prestige (cited by Weber) that attend the rich make it possible for them to equip their children for riches in the future. Likewise, the disadvantages that attend poverty make it difficult for the poor to place their children in the strategic positions that will grant them wealth in the future.
Hence, a Marxist struggle between/among the classes persists in today’s society in such a way that consigns families to generations of wealth or poverty depending on their statuses in the past.
Berliner, Uri. “Haves and Have Nots: Income Inequality in America. ” National Public Radio. NPR, 2007. http://www. npr. org/templates/story/story. php? storyId=7180618 Cornia, Giovanni Andrea & Julius Court. “Inequality, Growth, and Poverty in the Era of Liberalization and Globalization. ” The United Nations University. Helsinki: World Institute for the Development of Economic Research, 2001.