Transcript Slide 1

Outline
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Comparative Poverty
Distribution of Income and Wealth
The “Fluidity” of Poverty
Intra-Generational Mobility
Intergenerational Mobility
Poverty and Individual Attributes
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Human Capital and the Culture of Poverty
Fundraising/Campus Visit
Lots and lots and lots of data…don’t have a stroke. Be attentive to
the bigger picture, the conclusions we draw, the general trends…
Review Question Problems
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Despite size of nation and size of population, public
policy reduced poverty
Key difference between US and other advanced
industrial capitalist nations:
 Social
Safety net…low wages
Politics and Poverty
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Not because other nations have
lower standard of Standard of
Living
 Or
that our poor as not as poor
(See chart 2.2)
Social Welfare Spending,
(as pct. of gross national product)
40
35
30
25
20
15
10
5
0
Sweden
Neth
Den
Fran
Germ
Italy
UK
US
Anti-Poverty Programs constitute about 14% of the
budget…Could change that to 25% OR simply increase the
budget…both would result in large political fights
Funding the Welfare State: Household Tax
Wedge, 2003
Tax Policy
Poverty and Inequality
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Wealth and Income are distributed differently in
different capitalist societies
If some have more…others have less…lets explore
This American life…
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Income-money, wages, and payments that are
periodically received from investments
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For most people a paycheck
10 Volunteers Up Front…
America’s Middle Class…
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What does the data show about the distribution of
income in America?
All Capitalist…But Inequality Varies
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Ratio of Top 10% to Bottom 10%
This American life…
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Wealth-assets, particularly those that are income
producing.
 For
most people (60%) their home…for many, no
wealth
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10 Volunteers Up Front…
Fewer People Own More Wealth
 1976: richest 10% of
the U.S. population
owned 50% of all wealth.
 2001: richest 10% of
the U.S. population
owned 70% of all wealth.
Source: Edward N. Wolff, “Recent Trends in Wealth Ownership”
14
Try this with a pizza tonight…
US has highest rate of inequality in Wealth
Distribution
(Gini Index: closer to 100 the > inequality)
Japan
24.9
Sweden
25
Germany
30
UK
36
US
40
The Fluid Nature of Poverty
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More musical chairs shortly…but for now, “fluidity”
3. Rank suggests that we need to recognize the “fluid”
nature of poverty. Please explain what he means by
this, being sure to cite the text as evidence in your
answer.
Weaving in and out…
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3. Rank suggests that we need to recognize the “fluid”
nature of poverty. Please explain what he means by this,
being sure to cite the text as evidence in your answer.
“Individuals ands households tend to weave their way in and
out of poverty depending on the occurrence or
nonoccurrence of detrimental events (e.g. job loss, family
disruption, ill health). Of course, the amount by which
individuals find themselves above the poverty line is often
quite modest, so the future detrimental events can throw
them back below the poverty line”(Rank 2005: 30).
Weaving in and out of poverty…
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Social Mobility
 The
movement between different positions within a
society.
 Occupations,
income brackets, social classes
Social Mobility
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Sociologists Study Two Forms of Social Mobility
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Intergenerational- compares the position of parents to that of
their children
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Intra-generational- comparing the position of a person over
an extended period of time.
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If Parents were middle class, how likely are you be very wealthy
Start out as a mail clerk and end up CEO
Both concepts tell us something useful about society…
Intra-generational Poverty
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“…newer longitudinal data show that a majority of poor
individuals actually remain poor for only short periods of
time and a relatively high proportion of people have
experienced poverty at one point or another.” (Iceland, p.48)
Spells of poverty
45 percent end within 1 year
 70 percent end within 3 years
 Only 12 percent last 10 years or more
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But what is the rest of the story…
The Poverty Yo-Yo
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But… “despite the shortness of many poverty spells,
it is quite common for people who leave poverty to fall
back into it a short time later.”
 “…about
½ of those who end poverty spells fall back
into it a short time later.”
(Iceland, p.49)
 “50%
of Blacks and 30% of whites who fall into
poverty in some year will be poor in 5 or more of the
next ten years.”
(Iceland, p.49)
Intergenerational Poverty
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About 1 in 4 who were consistently poor before age 17 were still
poor at ages 25-27
(Iceland, p.50)
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African Americans, 1 in 3…Whites, 1 in 12
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Forces us to consider why the difference?
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Geography, culture, discrimination?
So 75% of kids born in poor families will not poor in their late
20s, BUT
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These kids are more likely to be poor than kids born to the non-poor,
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Most will remain at the bottom of the class structure…near poor…see
next slide
Comparative Mobility…US Lags
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By international standards, the United States has an unusually low level of
intergenerational mobility: our parents’ income is highly predictive of our incomes
as adults.
“Recent research surveyed by the Organization for Economic Cooperation and
Development, a governmental think tank for the rich nations, found that mobility
in the United States is lower than in other industrial countries. One study found
that mobility between generations — people doing better or worse than their
parents — is weaker in America than in Denmark, Austria, Norway, Finland,
Canada, Sweden, Germany, Spain and France. In America, there is more than
a 40 percent chance that if a father is in the bottom fifth of the earnings’
distribution, his son will end up there, too. In Denmark, the equivalent odds are
under 25 percent, and they are less than 30 percent in Britain (NYT 7/13/07).”
Explanations as to why?
So…At this point…
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You should know have a better idea of how we measure
poverty
You should have a better idea of the facts…how much
poverty, how persistent is it, how US compares…
You have been introduced to the ideas that the labor
market and government programs impact poverty rates
Now lets consider explanations for poverty…
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1. Rank suggests that most social scientists and
commentators “have in effect focused on who loses
out at the economic game, rather than addressing the
fact that the game producers losers in the first
place”(Rank 2005: 50). Please explain what Rank
means by this statement. In might help to read the
whole chapter before you answer this question.
More volunteers please
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Most social scientists
(sociologists, economists,
etc.) focus on individual
attributes of the poor
That’s fine…but Rank
thinks that is
inadequate…it focuses
on who loses the game
rather than noting that
the game produces
losers.
Individual Attributes Often Pointed To
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Human Capital: Education, training, experience and other qualities that increase
worth in the labor market
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College degree allows more job opportunities than a HS degree
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Increases in human capital usually decreases labor market competition, and thus
boost pay (Brain surgeons vs. janitor)
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Lack of human capital decreases job opportunities
If there is a correlation between lack of human capital and poverty…if the more
human capital you have, the less likely you are to be poor…what is the obvious
public policy strategy…what should we try to do?
Individual Attributes Sometimes Pointed
To
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Beyond human capital, some focus on culture
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Culture of poverty
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a theory that explains poverty as the result of a set of norms and
values- a culture- that is uniquely characteristic of the poor
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Poor are governed by own code of values and behavior
Eroded work ethic, dependency on government programs
Lack of educational aspirations and achievement
Increased acceptance of single parenthood
Criminal activity
Alcohol and drub abuse
Some problems with Culture of
Poverty…Not Much Evidence
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“Overall, studies examining cultural differences do not provide
overwhelming evidence that most of the poor people adhere to
very different value systems than non-poor people”
(Iceland 2006: 97)
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Segments of the poor might possess cultural differences, but they
are small percentage of the overall population of poor people
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Underclass
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the element of the poor who are chronically unemployed, largely
dependent on social welfare, and socially isolated from the
mainstream society.
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Little Connection to Labor Market
Geographic Concentration & Isolation
Blue Vertical Lines are Economic
Recessions…
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What happens to poverty when the economy stops
growing...how does this pose a problems to culture based
explanations?
Structural Explanations
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That’s fine…but Rank
thinks that is
inadequate…it
focuses on who loses
the game rather than
noting that the game
produces losers.
Next…
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We’ll further explore the causes of poverty
Outline
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Structure of Poverty
The Labor Market and Poverty
The Safety Net and Poverty
The Likelihood of Poverty
Structural Vulnerability Explanation
TAP program: 3-5 M,T,W
Mandatory Reflection question due next Tuesday
Review questions…so, so. This is 40% of your grade…I’m not
going to just give these points away…take these seriously…work
at them…
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2. You are at party with a guy named Rush who
tells you that in the United States there are plenty
of good jobs for all who want them and therefore
there is no reason anyone should be poor. Another
guy named Mark is at the party and he tells Rush
that he is wrong, the American labor market has
demonstrated an inability to support all families.
After reading chapter 3, please explain what Mark
means, being sure to incorporate at least two pieces
of evidence from the text into your answer.
Inability of the Labor Market to
Support All Families
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To reduce poverty, many focus on labor supply
 Improve
human capital
 Work for welfare to change attitudes of poor
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Rank suggests we need to focus on labor demand
 Increasing
the number of quality jobs
 Rainwater
and Burtless report that 25% of all full time
workers are low wage workers…far more than in other
nations
 Note
next slide
Full Time, Year Round Poverty
Wages (family of four)
Inability of the Labor Market to
Support All Families
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“Beyond low wages, there is also a mismatch between the
number of available jobs and the number of those who need
them”(Rank 2005: 54)
Even when economy is booming…there is unemployment
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Rank notes that in 2001, that meant 7 million people
Inability of the Labor Market to
Support All Families
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Are the jobs that
household head are
working at capable of
getting a family out of
poverty?
Let’s just consider all
households working full
time?
Inability of the Labor Market to
Support All Families
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Are the jobs that household
head are working at
capable of getting a
family out of poverty?
9.4% of households were
working at jobs in which
their earnings could not pull
a family out of poverty
3. You are at party with a guy named Bill who tells
you that there are “vast amounts of tax dollars
being spent on public assistance” and that America
does more than any other nation to reduce poverty.
Another guy named Mark is at the party and he
tells Bill that’s just not true and suggests that US
efforts to reduce poverty are actually minimal.
After reading chapter 3, please explain what Mark
means, being sure to incorporate at least two pieces
of evidence from the text into your answer
Ineffectiveness of Social Safety Net
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US allocates smaller proportion of Gross Domestic
Product to social welfare
40
35
30
25
20
15
10
5
0
Sweden
Neth
Den
Fran
Germ
Italy
UK
US
Less Generous Safety Net
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Means tested health care for
poorest (medicaid) vs.
healthcare for all citizens
Less generous unemployment
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How would this relate to
the number of low wage
jobs available in an
economy?
Ineffectiveness of Social Safety Net
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4. You are at party with a guy named Cant
Happentome. He tells you that poverty only affects
a small number of Americans so we need not worry
about it. Another guy named Mark is at the party
and he tells Cant recent research suggests he is
wrong about the risk of poverty, and that more
people will experience poverty than he thinks. After
reading chapter 3, please explain what Mark
means, being sure to incorporate at least one piece
of evidence from the text into your answer.
Widespread Life Course Risk of
Poverty
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Someone interpret…
Table 3.5: Cumulative Percent of Americans
Experiencing Poverty (Ranke 2005:63)
Level of Poverty
Age
Below 1.0 Below 1.25
of poverty
Below 1.5
20
10.6
15
19.1
35
31.4
39
46.9
55
45.0
52.8
61
75
58.5
68
76
Widespread Life Course Risk of
Poverty
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Life Course analysis of poverty shows that by old
age, 58.5% of us will experience poverty at some
point in our lives
Table 3.5: Cumulative Percent of Americans
Experiencing Poverty (Ranke 2005:63)
Level of Poverty
Age
Below 1.0 Below 1.25
of poverty
Below 1.5
20
10.6
15
19.1
35
31.4
39
46.9
55
45.0
52.8
61
75
58.5
68
76
Widespread Life Course Risk of
Poverty
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“…a clear majority of Americans will experience
poverty at some point during their lifetime. Rather
than an isolated event that occurs only among what
has been labeled the “underclass,” poverty is an
experience that the majority of American will
encounter firsthand during adulthood”(Rank 2005:
65)
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5. Rank develops a “structural vulnerability
explanation” of poverty that consists of three
components. In your own words, summarize his
explanations. Be sure to touch on all three
components.
Structural Vulnerability Explanation: AKA…who
is most likely to lose at musical chairs…
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Certain characteristics
make some people more
vulnerable to poverty if
they lose a job, have a
health crisis or experience
a family crisis

Lack of human capital
Structural Vulnerability Explanation: AKA…who
is most likely to lose at musical chairs…
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Acquisition of Human Capital is
strongly influenced by social class
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Monopoly game:

I start with 5000 and 3 good
properties; Bernard gets
$1,500 and no properties;
Melissa gets $250
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If we play hundreds of
games…who is most likely to
win and lose?
Structural Vulnerability Explanation: AKA…who
is most likely to lose at musical chairs…
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Acquisition of Human Capital is strongly influenced by social class
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Life:
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Good pre-natal care, normal brain development, educated parents =
strong vocabulary (2000), baby ivy pre-school @ $24,000 a year,
excellent K-12 school, private tutors, SAT courses, college

Bad pre-natal care, abnormal brain development, limited vocabulary
(600), cruddy pre-school, lousy schools, you guys, no SAT
courses…College?...Note the next chart
Interpret
Structural Vulnerability Explanation: AKA…who
is most likely to lose at musical chairs…
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Certain characteristics make some people more vulnerable to
poverty if they lose a job, have a health crisis or experience a
family crisis:
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Lack of Human Capital
Acquisition of Human Capital is strongly influenced by social class
Individual Characteristics help explain who loses, but structural
forces ensure that there will be losers in the first place
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Note Rank’s Chart
Structural Vulnerability Model
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Societal Lack of
Opportunities and
Supports
We will explore both…
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Rank provides us with a
structural account of the
“game”

Rank, Wilson, Massey and
others that we will read help
us understand why some
(inner city African
Americans; women) are
more likely to lose game
Structural Failings
Vulnerability to
Poverty
Human Capital and
Demographic
Social Class and
Background
Characteristics
Fundraising and a Trip to Campus
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A moderator to facilitate discussion
Fundraising Ideas
 Assignment

of tasks
Trip to Campus
 Ideas?
 Assignment
of tasks