7 Class Inequality

Sociologists use the term social inequality to describe the unequal distribution of valued resources, rewards, and positions in a society. Key to the concept is the notion of social differentiation, which refers to how people are divided  into different categories. Social differentiation by itself does not necessarily produce hierarchies of rank, privilege, and power. However, when a social category like gender, race,  or class puts people in a position in which they can claim a greater share of resources or services, then social differentiation becomes the basis of social inequality.

Social stratification refers to a society’s categorization of its people into rankings based on factors like wealth, income, family background, and power. Geologists also use the word “stratification” to describe the distinct layers found in rock. Typically, society’s layers, made of people, represent the uneven distribution of society’s resources. People with more resources represent the top layer of the social structure of stratification. Other groups of people, with fewer and fewer resources, represent the lower layers. An individual’s place within this stratification is called socioeconomic status (SES).

Factors that define stratification vary in different societies. In most societies, stratification is an economic system, based on wealth, which is the net value of money and assets a person has, and income, which is a person’s wages or investment dividends. While people are regularly categorized based on how rich or poor they are, other important factors influence social standing. For example, in some cultures, wisdom and charisma is valued, and people who have them are revered more than those who don’t. In some cultures, elders are esteemed, while in others, the elderly are disparaged or overlooked. Societies’ cultural beliefs often reinforce stratification.

One key determinant of social standing is our parents. Parents tend to pass their social position on to their children. People inherit not only social standing but also the cultural norms, values, and beliefs that accompany a certain lifestyle. They share these with a network of friends and family members that provide resources and support. This is one of the reasons first-generation college students do not fare as well as other students. They frequently lack access to the resources and support commonly provided to those whose parents have gone to college.

Other determinants are found in a society’s occupational structure. Teachers, for example, often have high levels of education but receive relatively low pay. Many believe that teaching is a noble profession, so teachers should do their jobs for love of their profession and the good of their students—not for money. Musicians and artists often face similar views. However, the same attitude is not applied to lawyers and those working in corporate world. Cultural attitudes and beliefs like this support and perpetuate social and economic inequalities.

Systems of Stratification

Sociologists distinguish between two types of systems of stratification. Closed systems accommodate little change in social position. They do not allow people to shift levels and do not permit social relationships between levels. Closed systems include estate, slavery, and caste systems. Open systems are based on achievement and allow for movement and interaction between layers and classes. How different systems operate reflect, emphasize, and foster specific cultural values, shaping individual beliefs. In this section, we’ll review class and caste stratification systems, plus discuss the ideal system of meritocracy.

Caste Systems

Caste systems are closed stratification systems where people can do little or nothing to change the social standing of their birth. The caste system determines all aspects of an individual’s life: occupations, marriage partners, and housing. Individual talents, interests, or potential do not provide opportunities to improve a person’s social position.

The best-known caste systems today are those found in South Asia. Within the Hindu caste tradition, people expect to work in an occupation and to enter into a marriage based on their caste (Dumont, 1980). Accepting this social standing is considered a moral duty and people are socialized to accept their social standing. Cultural values reinforced the system. Caste systems promote beliefs in fate, destiny, and the will of a higher power, rather than promoting individual freedom as a value. This belief system is an ideology. Every culture has an ideology that supports its system of stratification.

The caste system in India has been officially rendered illegal, but is still deeply embedded within the society, particularly in rural areas. In India’s larger cities, people now have more opportunities to choose their own career paths and marriage partners, yet many continue to experience the pressures of caste, even young people growing up in cities in North America and Europe.

Class Systems

A class system is based on both social factors and individual achievement. It is at least a partially open system. A class consists of a set of people who have the same relationship to the means of production or productive property, that is, to the things used to produce the goods and services needed for survival: tools, technologies, resources, land, workplaces, etc.

In Karl Marx’s analysis, class systems form around the institution of private property, dividing those who own or control productive property from those who do not. He called entire economic systems (like capitalism or feudalism) modes of production. A mode of production is comprised of both the means of production (technology, land, resources, factories) and the social relations of production (the people involved in the production process, i.e., workers, owners, and consumers). While Marx engaged with economics, his main concern was the social life of people under capitalism.

In Marx’s time, bourgeois capitalists owned high-producing businesses, factories, and land, as they still do today. Proletariats were the workers who performed the manual labor to produce goods. Like the economists of his day, Marx believed that the value of a commodity was determined by the amount of socially expected labour that went into its production. If a piece of clothing costs more, it is because more work is expected to create the item. This value is therefore produced by the workers, but they don’t receive the full value of their work. They may work 8 hours but the amount of money they receive as is equivalent to the amount of money they made for the business in the first 4 hours of their workday. Marx called the extra money which is taken as profits by the owner surplus value. For Marx, this relationship is exploitative, as he believes workers should keep the entire value of the labour they put in for themselves.

Alienation

Marx believed workers experience deep alienation due the conditions under which they produce. Alienation refers to the condition in which the individual is isolated and divorced from their society, work, and even their selves. Marx defined four specific types of alienation.

Alienation from the product of one’s labor. An industrial worker does not have the opportunity to relate to the product they work on. Instead of training for years as a watchmaker, an unskilled worker can get a job at a watch factory pressing buttons to seal pieces together. The worker does not care if they are making watches or cars, simply that the job exists. In the same way, a worker may not even know or care what product to which they are contributing.

Alienation from the process of one’s labour. A worker does not control the conditions of their job because they do not own the means of production. If a person is hired to work in a fast-food restaurant, they are expected to make the food the way they are taught. All ingredients must be combined in a particular order and in a particular quantity; there is no room for creativity or change. Everything is decided by the bourgeoisie who then dictate orders to the labourers.

Alienation from others. Workers compete, rather than cooperate. Employees vie for time slots, bonuses, and job security. And when they go home at night, they continue to struggle with bill collectors and landlords.

Alienation from one’s self. A final outcome of industrial capitalism is a loss of connectivity between a worker and their occupation. Because there is nothing that ties a worker to their labour, there is no longer a sense of self. Instead of being able to take pride in an identity such as being a watchmaker, automobile builder, or chef, a person is simply a cog in the machine.

Taken as a whole, then, alienation in modern society means that an individual has no control over his life. They only feel “themselves” at home, when they are “eating, drinking and procreating,” while at work they feel “nothing more than an animal.” Is this how work is for you? Why or why not?

Why then do workers put up with their degraded condition? To explain this, Marx developed the concept of false consciousness. False consciousness is a condition in which the beliefs, ideals, or ideology of a person are not in that person’s own best interest. In fact, it is the ideology of the dominant class (here, the bourgeoisie capitalists) that is imposed upon the proletariat. Ideas such as the emphasis of competition over cooperation, or of hard work being its own reward, clearly benefit the owners of industry. Therefore, workers are less likely to question their place in society and assume individual responsibility for existing conditions.

Class Consciousness

For the proletariat to overcome false consciousness, Marx proposed that it be replaced with class consciousness, the awareness of one’s rank in society. Instead of existing as a “class in itself” the proletariat must transform into a “class for itself” in order to produce social change (Marx and Engels, 1978), meaning that instead of just being an inert strata of society, the class could become an advocate for social improvements.

Marx’s approach is often referred to as historical materialism, because for him, society’s constructions were predicated upon the idea of “base and superstructure” where by the material base takes precedence in shaping a society’s historical development. A society’s economic character forms its base, upon which rests the culture and social institutions, the superstructure.

Alyxr, CC BY-SA 4.0

Additionally, Marx saw conflict in society as the primary means of change. Economically, he saw conflict existing between the owners of the means of production—the bourgeoisie—and the labourers, called the proletariat.

Marx maintained that these conflicts appeared consistently between groups throughout history during times of social revolution. These revolutions, or “class antagonisms” as he called them, were a result of one class dominating another. Most recently, with the end of feudalism, a new revolutionary class called the bourgeoisie dominated the proletariat laborer. The bourgeoisie were revolutionary in the sense that they represented a radical change in the structure of society. In Marx’s words, “Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other—Bourgeoisie and Proletariat” (Marx and Engels 1848).

Marx was writing over 150 years ago, but his ideas remain influential today. The conditions of capitalism have changed but the core dynamics of class conflict remain, both locally and across the globe, as capital has gone global, transcending the traditional boundaries of the nation-state  (Teeple, 2000).

Socioeconomic Status

Max Weber (1946) defined social class slightly differently, as the “life chances” or opportunities to acquire rewards one shares with others by virtue of one’s possession of property, goods, or opportunities for income. Owning property/capital or not owning property/capital is still the basic variable that defines a person’s class situation or life chances. However, for Max Weber, class is defined with respect to markets rather than the process of production. By market, we mean that it is the value of one’s products or skills on the labour market that determines whether one has greater or lesser life chances. This leads to a hierarchical class schema with many gradations.

Analyses of class inspired by Weber tend to emphasize gradations of status with regard to a number of variables like wealth, income, education, and occupation. Class stratification is not just determined by a group’s economic position but by the prestige of the group’s occupation, education level, consumption, and lifestyle. It is a matter of status — the level of honour or prestige one holds in the community by virtue of one’s social position — as much as a matter of class. Based on the Weberian approach, some sociologists talk about upper, middle, and lower classes (with many subcategories within them) in a way that mixes status categories with class categories. These gradations are often referred to as a group’s socio-economic status (SES), their social position relative to others based on income, education, and occupation. For example, although plumbers might earn more than high school teachers and have greater life chances in a particular economy, the status division between blue-collar work (people who “work with their hands”) and white-collar work (people who “work with their minds”) means that plumbers, for example, may be characterized as working class but teachers as middle class. There is an arbitrariness to the division of classes into upper, middle, and lower.

Growing Inequality

For several decades, the joke was that the study of income inequality was like watching grass grow because nothing ever happened (Osberg, 2008). Between 1946 and 1981, however, changes in income inequality were small in many countries, including Canada and the United States. Prior to this time, the key question was why did economic inequality not change during this period of huge economic growth? From 1981 until the present, during another period of rapid and extensive economic change in which the overall production of wealth continued to expand, economic inequality has increased dramatically. What happened?

The main explanatory factor is that between 1946 and 1981 real wages increased in pace with the growth of the economy, but since 1981 only upper classes have seen any meaningful increase in real income while the very wealthy have seen huge increases. Neoliberal policies of reduced state expenditures and tax cuts have been major factors in defining the difference between these two eras. The neoliberal theory that the benefits of tax cuts to the rich would “trickle down” to the middle class and the poor has proven false. The biggest losers with regard to neoliberal policy, of course, are the very poor. As Osberg (2008) notes, it was not until the 1980s and 1990s that the homeless — those forced to beg in the streets and those dependent on food banks — began to appear in Canada in significant numbers.

The dominant ideological presumption about social inequality is that everyone has an equal chance at success. This is the belief in equality of opportunity, which can be contrasted with the concept of equality of condition. Equality of condition is the situation in which everyone in a society has a similar level of wealth, status, and power. Equality of opportunity, on the other hand, is the idea that everyone has an equal possibility of becoming successful. It exists when people have the same chance to pursue economic or social rewards. This is often seen as a function of equal access to education, meritocracy (where individual merit determines social standing), and formal or informal measures to eliminate social discrimination. Ultimately, equality of opportunity means that inequalities of condition are not so great that they greatly hamper a person’s life chances.

Social Mobility

Social mobility refers to the ability of individuals to change positions within a social stratification system. When people improve or diminish their economic status in a way that affects social class, they experience social mobility. Individuals can experience upward or downward social mobility for a variety of reasons. Upward mobility refers to an increase—or upward shift—when they move from a lower to a higher socioeconomical class. In contrast, individuals experience downward mobility when they move from higher socioeconomic class to a lower one. Some people move downward because of business setbacks, unemployment, or illness. Dropping out of school, losing a job, or getting a divorce may result in a loss of income or status and, therefore, downward social mobility.

It is not uncommon for different generations of a family to belong to varying social classes. This is known as intergenerational mobility. For example, an upper-class executive may have parents who belonged to the middle class. In turn, those parents may have been raised in the lower class. Patterns of intergenerational mobility can reflect long-term societal changes.

On the other hand, intragenerational mobility refers to changes in a person’s social mobility over the course of their lifetime. For example, the wealth and prestige experienced by one person may be quite different from that of their siblings.

Structural mobility happens when societal changes enable a whole group of people to move up or down the social class ladder. Structural mobility is attributable to changes in society as a whole. The lockdowns that accompanied the global COVID-19 pandemic shifted the social positions of large numbers of people as they lost their jobs and entire industries (like tourism) suffered catastrophic financial losses.

People with wealth often receive the most and best schooling, access better health care, and consume the most goods and services. In addition, wealthy people also wield decision-making power over their daily life because money gives them access to better resources. By contrasts, many lower-income individuals receive less education and inadequate health care and have less influence over the circumstances of their everyday lives.

Global Inequality

A major concern when discussing global inequality is how to avoid an ethnocentric bias implying that less developed nations want to be like those who have attained postindustrial global power. Terms such as “developing” and “developed” imply that some countries are at a lower level and must improve to participate successfully in the global economy, a label indicating that all aspects of the economy cross national borders. We must take care in how we delineate different countries. Over time, terminology has shifted to make way for a more accurate view of the world.

Cold War Terminology

The idea of the first and third world developed during the Cold War era (1945–1991) when the globe was divided between capitalist and communist political-economic systems (and their respective geopolitical aspirations). Familiar and still used by many, it involves classifying countries into First World, Second World, and Third World nations based on respective economic development and standards of living. When this nomenclature was developed, capitalistic democracies such as the United States, Canada, and Japan were considered part of the First World. The poorest, most undeveloped countries were referred to as the Third World and included most of sub-Saharan Africa, Latin America, and Asia. The Second World was the socialist world or Soviet bloc: industrially developed but organized according to a state socialist or communist model of political economy. Later, sociologist Manual Castells (1998) added the term Fourth World to refer to stigmatized minority groups that were denied a political voice all over the globe (Indigenous peoples, prisoners, and the homeless, for example).

During the Cold War, global inequality was described in terms of economic development. Along with developing and developed nations, the terms “less-developed nation” and “underdeveloped nation” were used. This view flowed from modernization theory, which suggested that societies moved through natural stages of development as they progressed toward becoming developed societies (i.e., stable, democratic, market oriented, and capitalist). The economist Walt Rostow (1960) provided a very influential schema of development when he described the linear sequence of developmental stages:

• traditional society (agrarian based with low productivity)
• pre-take off society (state formation and shift to industrial production, expansion of markets, and generation of surplus)
• take-off (rapid self-sustained economic growth and reinvestment of capital in the economy)
• maturity (a modern industrialized economy, highly capitalized and technologically advanced)
• the age of high mass-consumption (shift from basic goods to “durable” goods (TVs, cars, refrigerators, etc.), and luxury goods, general prosperity, egalitarianism).

Like most versions of modernization theory, Rostow’s schema describes a linear process of development culminating in the formation of democratic, capitalist societies. It was clearly in line with Cold War ideology, but it also echoed widely held beliefs about the idea of social progress as an evolutionary process.

However, as “natural” as these stages of development were supposed to be, they required creation, securing, protection, and support. This was the era when the idea of geopolitical noblesse oblige (first-world responsibility) took root, suggesting that the so-called developed nations should provide foreign aid to the less-developed and underdeveloped nations in order to raise their standard of living.

Dependency Theory

Dependency theory was created in part as a response to the Western-centric mindset of modernization theory. One version is Immanuel Wallerstein’s (1979) world systems approach, which uses an economic and political basis to understand global inequality. For Wallerstein, development and underdevelopment were not stages in a natural process of gradual modernization, but the product of power relations and colonialism. He conceived the global economy as a complex historical system supporting an economic hierarchy that placed some nations in positions of power with numerous resources and other nations in a state of economic subordination. Those that were in a state of subordination faced significant obstacles to mobilization.

Core nations are dominant capitalist countries, highly industrialized, technological, and urbanized. For example, Wallerstein contends that the United States is an economic powerhouse that can support or deny support to important economic legislation with far-reaching implications, thus exerting control over every aspect of the global economy and exploiting both semi-peripheral and peripheral nations.

Peripheral nations often have very little industrialization; what they do have often represents the means of production owned by core nations, or the resources exploited by core nations. There are abundant examples of countries in this category. Check the label of your jeans or sweatshirt and see where it was made. Chances are it was a peripheral nation such as Guatemala, Bangladesh, Malaysia, or Colombia. It is likely that workers in these factories, which are owned or leased by global core nation companies, are not enjoying the same privileges and rights as Canadian workers.

Semi-peripheral nations are in-between nations, not powerful enough to dictate policy but nevertheless acting as a major source for raw material. They are an expanding middle-class marketplace for core nations, while also exploiting peripheral nations. Mexico is an example, providing abundant cheap agricultural labour to the United States and Canada, and supplying goods to the North American market at a rate dictated by U.S. and Canadian consumers without the constitutional protections offered to U.S. or Canadian workers.

Measuring Inequality

One important measure of inequality is Gini Coefficient, named after the Italian sociologist and statistician Corrado Gini. The Gini Coefficient is calculated using a number of financial indicators and is expressed as either a decimal or out of 100. A country in which every resident has the same income would have a Gini coefficient of 0. A country in which one resident earned all the income, while everyone else earned nothing, would have an income Gini coefficient of 1. Thus, the higher the number (the closer to that one person having all the income or wealth), the more inequality there is. Often times you will see this number represented at a percentage, so that 0 would be 0% and 1 would be 100%. In this case, we would call it the Ginni Index, and it is simply the Ginni Coefficient multiplied by 100.

The Gini is not a measurement of poverty; it is a measurement of inequality, that is, how unequal a country is in terms of wealth or income.

Poverty

In order to capture the complexities of social life the world over, sociologists use different measurements and concepts to think about poverty. Relative poverty is a state of living where people can afford necessities but are unable to meet their society’s average standard of living. It is a state of feeling strained because one is not living at the standard expected within a given society. Absolute or extreme poverty, on the other hand, is the experience of not being able to pay for basic needs, like food and shelter.

In prior years, the World Bank focused heavily on the number of people under that extreme poverty level of $1.90 per day. Nearly 1 in 10 people across the world in 2020 lived in extreme poverty. It is estimated that global COVID pandemic added another 150 million people to this group in 2021, with 80% of these newly poor individuals living in middle income countries (World Bank, 2020).

Internally, countries measure poverty in different ways. The most common is to set the poverty level based on the cost of a basket of essential goods. This measurement can be set at different levels for rural and urban areas, as it is in India and Canada. There are other ways of measuring poverty as well, such as how much of a family’s income is spent on necessities. In Canada, this is known as the low-income cut-off and was the preferred method of measuring poverty for decades, before the government shifted to the market basket official definition in 2018.

In almost all societies, women have higher rates of poverty than men. More women and girls live in poor conditions, receive inadequate healthcare, bear the brunt of malnutrition and inadequate drinking water, and so on. This situation goes back decades, which led sociologist Diana Pearce to coin the term “feminization of poverty” in 1978. Throughout the 1990s, data indicated that while overall poverty rates were rising, especially in peripheral nations, the rates of impoverishment increased for women nearly 20 percent more than for men (Mogadham 2005). More recently, as extreme poverty rates continue to fall, women still make up a disproportionate amount of the world’s poor. Gender differences are sometimes difficult to discern in international poverty data, but researchers have undertaken efforts to define the makeup of those affected by poverty. Of people aged 25-34, the world has 122 women living in poverty for every 100 men living in poverty.

Why is this happening? While myriad variables affect women’s poverty, research specializing in this issue identifies three causes (Mogadham 2005):

• The expansion in the number of female-headed households
• The persistence and consequences of intra-household inequalities and biases against women
• The implementation of neoliberal economic policies around the world

While women are living longer and healthier lives today compared to ten years ago, around the world many women are denied basic rights, particularly in the workplace. In peripheral nations, they accumulate fewer assets, farm less land, make less money, and face restricted civil rights and liberties. Women can stimulate the economic growth of peripheral nations, but they are often undereducated and lack access to credit needed to start small businesses. When women are able to attain higher levels of education, they account for significant economic growth within their nations (OECD 2012).

Functionalism

In sociology, the functionalist perspective examines how society’s parts operate. According to functionalism, different aspects of society exist because they serve a vital purpose. What is the function of social stratification?

In 1945, sociologists Kingsley Davis and Wilbert Moore published the Davis-Moore thesis, which argued that the greater the functional importance of a social role, the greater must be the reward. The theory posits that social stratification represents the inherently unequal value of different work. Certain tasks in society are more valuable than others (for example, doctors or lawyers). Qualified people who fill those positions are rewarded more than others (Davis and Moore, 1945).

According to Davis and Moore, a firefighter’s job is more important than, for instance, a grocery store cashier’s job. The cashier position does not require similar skill and training level as firefighting. Without the incentive of higher pay, better benefits, and increased respect, why would someone be willing to rush into burning buildings? If pay levels were the same, the firefighter might as well work as a grocery store cashier and avoid the risk of firefighting. Davis and Moore believed that rewarding more important work with higher levels of income, prestige, and power encourages people to work harder and longer.

Davis and Moore stated that, in most cases, the degree of skill required for a job determines that job’s importance. They noted that the more skill required for a job, the fewer qualified people there would be to do that job. Certain jobs, such as cleaning hallways or answering phones, do not require much skill. Therefore, most people would be qualified for these positions. Other work, like designing a highway system or delivering a baby, requires immense skill limiting the number of people qualified to take on this type of work.

Many scholars have criticized the Davis-Moore thesis. Early on, in 1953, Melvin Tumin argued that it does not explain inequalities in the education system or inequalities due to race or gender. He believed social stratification prevented many qualified people from attempting to fill roles, leading to a much less meritocratic system in practice (Tumin 1953).

Conflict Theory

Unlike functionalists, conflict theorists do not see inequality as good for society overall. Instead, they recognize that there are different interests at play, and that the status quo serves some people at the expense of others.

Many conflict theorists draw on the work of Karl Marx, whose views on class were discussed in detail above. Marx believed that the exploitation that workers suffer under capitalism will lead to class conflict, as the workers attempt to keep more of the value that they produce for themselves, or at least have more time to live life away from their jobs. If the workers could become conscious of their own class position, they could work collectively to change society, either through revolution or the democratic system.

Max Weber was also a conflict theorist, though unlike Marx he didn’t think there was any way to arrive at a classless society. For Weber, humans naturally sought to extend their power and influence, and this was often done through group affiliations. It was simply how things were, and while the conditions of life could be improved, it takes the slow, patient work of political reform over time (Weber himself was involved in German party politics), rather than a spontaneous and sudden revolution.

Symbolic Interactionism

Symbolic interactionism uses everyday interactions of individuals to explain society as a whole. Symbolic interactionism examines stratification from a micro-level perspective. This analysis strives to explain how people’s social standing affects their everyday interactions.

In most communities, people interact primarily with others who share the same social standing. It is precisely because of social stratification that people tend to live, work, and associate with others like themselves, people who share their same income level, educational background, class traits and even tastes in food, music, and clothing. The built-in system of social stratification groups people together. This is why people often end up marrying people in their own class, despite the fantasies promulgated by movies such as Love Actually (2003).

Symbolic interactionists also note that people’s appearance reflects their perceived social standing. As discussed above, class traits seen through housing, clothing, and transportation indicate social status, as do hairstyles, taste in accessories, and personal style. Symbolic interactionists also analyze how individuals think of themselves or others interpretation of themselves based on these class traits.

To symbolically communicate social standing, people often engage in conspicuous consumption, which is the purchase and use of certain products to make a social statement about status (Veblen, 1899). Carrying pricey but eco-friendly water bottles could indicate a person’s social standing, or what they would like others to believe their social standing is. Some people buy expensive trendy sneakers even though they will never wear them to jog or play sports.  This process of defining ourselves by what we buy is known as consumerism. This interplay between identity and consumption is an important area studied by symbolic interactionists.

Conclusion

In this chapter we looked at the different ways sociologists think about social inequality. Using a structural functionalist, conflict theory, or symbolic interactionist lens allows us to consider inequality from a variety of perspectives. Terms like social class and socioeconomic status function within these traditions to highlight particular aspects of social stratification, helping us name the component parts of the societies we inhabit.

Study Questions

1. Which social class do you and your family belong to? Are you in a different or same social class than your grandparents and great-grandparents? Why are you in the class you are? What changed? What stayed the same? How did the changes come about?
2. Consider the Davis-Moore thesis. Do you agree with Davis and Moore? Does social stratification have an important function in society? What examples can you think of that support the thesis? What examples can you think of that refute the thesis?
3. What is meant by the feminization of poverty? Is this concept applicable to all societies? Why or why not?
4. There is much criticism that modernization theory is Eurocentric. Do you think dependency theory is also biased? Why, or why not?

References

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