Assessing Class: Wealth Research Paper Starter

Assessing Class: Wealth

The study of social class — structurally produced economic hierarchies — and how to best measure it has been a central theme in sociology since the work of Marx in the nineteenth century and Weber in the early twentieth century. Social class is a key concept in sociology and the foundation for scholarship on poverty, stratification, and inequality. However, there is considerable debate about how best to measure class and how various measurements translate over time, place, and societies. Indeed, new methodologies, increasing statistical sophistication, and the availability of large multinational and longitudinal data sets provide more resources for researchers who seek to uncover not only the best measures of social class, but how wealth, broadly defined, is interpreted and affects the lives of people.

Keywords Net Worth; Occupational Prestige; Power; Power Elite; Prestige; Stratification; Status System; Wealth

Stratification

Assessing Class: Wealth

Overview

The study of social class — structurally produced economic hierarchies — and how to best measure it has been a central theme in sociology since the work of Marx in the nineteenth century and Weber in the early twentieth century. Social class is a key concept in sociology and the foundation for scholarship on poverty, stratification, and inequality. However, there is considerable debate about how best to measure class and how various measurements translate over time, place, and societies. Indeed, new methodologies, increasing statistical sophistication, and the availability of large multinational and longitudinal data sets provide more resources for researchers who seek to uncover not only the best measures of social class, but how wealth, broadly defined, is interpreted and affects the lives of people.

Many researchers argue that inequality is a function of class status and the transmission of wealth (e.g., Wilson, 1980). Wealth, broadly defined, refers to the money (e.g., income) or assets (such as property or stocks) held by an individual or a group. It is a key component in the measurement of social class and stratification, which are also impacted by power and prestige. Although power is a contested concept, it broadly refers to the probability of a person or group carrying out their will even when opposed by others (Giddens, 1997). Prestige is defined as the respect associated with a person or group according to their social status.

Measures of Class

Stratification in the United States and around the world is a consequence of the unequal distribution of rewards. There are several ways this inequality is measured. The three most common are power, prestige, and wealth. Each measure and definition contributes to our understanding of social stratification and has various consequences for understanding wealth inequality.

Power

Power is often described as the ability a person has to get others to do things (Thio, 1992). Those who have access to greater resources (such as income, education, property) also tend to have more power, whether in the home, industry, or politics. Those with fewer resources tend to have less power. Three theoretical perspectives regarding the use of power as a measure of stratification and inequality are:

  • Marx's theory of capitalism
  • Elite theories
  • Pluralist theories

Marxist theories of power focus on the consequences of the social arrangements between those who own the means of production and those who do not. For instance, Marxists argue that the ruling class within capitalism holds not only economic power (because they own the means of production) but also political power, regardless of whether its members hold political office. The ruling class protects its interests through lobbying efforts and political contributions, and thus shapes the political debate in its favor. In addition, the ruling class holds social and cultural power by establishing hegemony, or, “manufacturing consent” through manipulation of the mass media (Herman and Chomsky, 1988).

Elite theories of power and its distribution, notably developed by C. Wright Mills (1956), argue that there is are limited few — mostly associated with the government, military, and a few executives in large industries — who have shared values and goals that facilitate the preservation of power and thus preserve class divisions.

Pluralist theories of power put forth an alternative argument regarding the distribution of power and its relevance to stratification and inequality. Pluralist theories suggest that power is more widely dispersed and equally distributed between various social groups. Pluralists argue, however, that the power of the individual is most evident when people band together to create social change, for instance, via voter participation and social movements (Piven & Clowerd, 1977; Burstein & Linton, 2002; Brooks & Manza 2008; Christian 2008).

Prestige

The notion that prestige can be an adequate measure of stratification and inequality is based on the idea that individual occupations have different levels of prestige, which result in pay differentials that form a status system. For instance, since the late twentieth century the General Social Survey in the US has collected data from households and asked respondents to rate over 90 occupations based on their perception of prestige. Occupations that have consistently received the highest rankings include physicians, college professors, judges, and lawyers. The occupations with the lowest prestige scores are housekeepers, garbage collectors, and janitors. Research that has tested the relationship between occupational prestige and income has suggested, compellingly, that there is a positive association between occupational prestige and patterns of income inequality (Caston, 1985). That is, occupations that are ranked highly according to socioeconomic prestige are also associated with higher levels of income. However, this picture is complicated by status inconsistencies, in which other socioeconomic factors, such as race and gender, may result in diminished prestige for minorities and women (Gittleman & Wolff, 2004), and, concomitantly, lower social class.

Wealth

The distribution of wealth is another means of measuring class. Wealth, broadly defined, refers to the money or assets (such as property or stocks) held by an individual or a group. Wealth is generally described in terms of accumulated items, including economic resources such as cash and investments, or the possession or control over property and other revenue-generating industries. Wealth is important because of its relative value: it can be converted into cash and therefore represents a source of consumption; it provides collateral to secure credit; and it can be passed to future generations (Deere and Doss, 2006). While wealth is central to determining income variation between and within groups, it is distinct from income, which refers to the wages people earn (or income from other sources such as rented property or dividends).

Further Insights

Measuring Wealth

It is difficult to acquire information about the distribution of wealth. In the US, data associated with wealth distribution is collected by the Federal Reserve Board’s Survey of Consumer Finances. Despite data limitations, several reports and publications suggest that in the US in 2010, the wealthiest 1% of families owned roughly 35% of the nation's net worth; the top 10% of families owned more than 75%; the top 20% owned about 88% of the wealth; the bottom 80% owned just over 11%; and the bottom 40% of the population owned less than 1% (Wolff, 2012). Data also not only offer compelling evidence that there is a growing gap between those who are among the richest 20% and those who are among the poorest 20% (in 2004, 34.4% of the wealth was owned by the top 1%), but there is a disparity between the capacity of different racial and ethnic groups to transfer intergenerational wealth. This intergenerational disparity affects the capacity of these groups to enhance the next generation's life chances by passing down accumulated wealth.

The inequitable distribution of wealth is of central...

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