Discussion 2
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Social Class,
Inequality, &
Poverty
Peter Kaufman, State University of New York at New
Paltz Todd Schoepflin, Niagara University
Social Class, Inequality, & Poverty (Fall 2021)
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Social Class, Inequality, &
Poverty
P E T E R K A U F M A N , S T A T E U N I V E R S I T Y O F N E W Y O R K A T N E W
P A L T Z T O D D S C H O E P F L I N , N I A G A R A U N I V E R S I T Y
INTRODUCTION
SOCIAL CLASS
The social class structure of the United States
Is social class ascribed or achieved?
Social mobility
INEQUALITY
The growing gap between the poor and the rich
U.S. inequality in global context
POVERTY
What is poverty?
Characteristics of the poor
The working poor and the jobless poor
Homelessness
The importance of affordable housing
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INTRODUCTION
Why do sociologists study social class inequality?
I was raised in a poor household. My mom is a Hispanic single mother on welfare who
lacks formal education. My father was an Italian immigrant who died of alcoholism. I grew up
with my mom’s side of the family. Among most of my family tobacco and alcohol use were
prominent. Marijuana and cocaine were also used frequently. The most successful thing I ever
witnessed anyone in my family do was join the army or graduate high school. Working was
hardly the trend in my family. My diet consisted of mostly unhealthy foods: fried meats, sauces
loaded with salt, pork fat, greasy snacks, lots of soda, and microwaveable food items. If I saw
anything green on my plate I thought, “eww disgusting” and I wouldn’t touch it. Not
surprisingly, I was overweight for much of my childhood and adolescence. And with all of the
second-hand smoke I breathed in I also developed asthma.
When I was 18, my mother kicked me out of the house and I moved in with the family of
a rich, white, friend of mine. This family had a different position in life on so many levels. They
had different interests, concerns, and ways of doing things. It all seemed so foreign to me. For
example, they were very health conscious. They had foods and products in their home that I
had never seen or heard of before. The parents even took time to exercise daily. And they
had lots of books in the home which they actually read. Although the way they lived seemed
strange to me I also knew that the lifestyle of this family allowed them to have many more
possibilities than I could ever imagine in my upbringing.
This excerpt comes from an essay written by Alejandro (Alex) Russo, a student in one of
our sociology classes.1 This brief autobiographical sketch captures many of the themes that we
discuss in this chapter. It also offers a snapshot of how social class has a significant impact on
our lives. As Alex suggests, social class influences our goals and aspirations, our potential and
possibilities, our lifestyle choices and habits, and even our health and well-being.
Despite its significance, social class often goes unacknowledged. We often don’t
recognize the effects of social class until we interact with people who have different
economic resources—much like Alex didn’t recognize the influence social class had on his life
until he moved in with his wealthy friend. In this sense, social class is invisible in plain sight. Unlike
characteristics such as race and gender, which are more obvious and easier to see and
define, we can’t always figure out someone’s social class just by looking at them. But if we are
seeing the world sociologically, indicators of social class quickly come into focus.
Some of us, like Alex, grow up in poverty while others grow up in affluent families who
may use their power and influence to ensure their children get into elite colleges (more on the
“Operation Varsity Blues” college admission scandal later).
Social Class, Inequality, & Poverty (Fall 2021)
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Some students attend rat- and cockroach-infested schools with outdated and
insufficient textbooks, while others attend schools with state-of-the-art facilities and computers
for every student.
Some adults work three jobs and over 80 hours a week just to support their families while
others enjoy paid vacations, health insurance, and employer contributions to a retirement
account.
And some of us live in cities like Flint, Michigan, while others live in cities like Bloomfield
Hills, Michigan. Although these two communities are separated by only 45 miles, the life
experiences of the people who live there are worlds apart. In Flint, the median household
income is $28,834, the unemployment rate is nearly twice the national average, 40% of
residents live in poverty, and the city is infamous for its lead-contaminated drinking water, its
abandoned and boarded-up homes, and its rising homicide rate.2 In contrast, Bloomfield Hills
is one of the richest cities in America. The median household income is $182,243, the value of
most homes is close to $1 million, and the community is known for its quiet, rural residential
properties, its exclusive country clubs, and its world-renowned educational institutions.
In this chapter we take a journey through the landscape of social class. We meet other
individuals and consider how their lives have been shaped and guided by their social class
position. Some individuals are greatly supported and enabled by their social class position
while others, like Alex, face many obstacles and constraints. Before examining how social class
contributes to some of these inequalities, we begin with a solid understanding of what exactly
we mean when we use the term social class.
SOCIAL CLASS
How do sociologists make sense of social class?
What is the social class structure of the United States?
Are we assigned a social class at birth or is it something we accomplish?
Is the American Dream alive and well or is it just a myth?
Consider these films: Pretty Woman, Boyz n the Hood, 8 Mile, Titanic, Dreamgirls, Pursuit
of Happyness, Annie, Slumdog Millionaire, The Hunger Games, Snowpiercer, The Great Gatsby,
The Wolf of Wall Street, Crazy Rich Asians, Hustlers, and Parasite. They all have one thing in
common: they revolve around social class.
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Social class is one of the central concepts in sociology. As you learned in the first
chapter, sociology emerged when scholars began investigating the economic inequality they
witnessed, particularly during the late 1800s and early 1900s. Karl Marx was an early sociologist,
and one of his central concerns was no different than what many sociologists still study today:
the growing economic gap between the haves and the have-nots.
Social class is just one form of stratification, a system that puts categories of people into
a hierarchy. All societies have stratification systems, but they vary in what categories are used
to sort people and how unequal those categories of people are. Religion, gender, wealth,
and race are common foundations for stratification, leading to unequal access to resources,
political rights, and other benefits. In other chapters, you’ll learn how the U.S. is stratified
according to race, ethnicity, and gender. In this chapter, we’re focusing on economic
stratification, and we analyze social class inequality in the U.S. as a structural problem, not as
something that results from personal failing.
A social class is generally defined as a group of individuals who share a similar
economic position based on income, wealth, education, and occupation. When referring to
social class, most people rely on a simple system consisting of the upper, middle, and lower (or
working) classes. This model is quick and convenient; however, as we will see, social class is
much more complicated than this.
Most definitions of social class are based on income, the total amount of money
someone earns each year. Income is a convenient indicator of social class, and it’s commonly
used to identify a person’s class standing.
Another common indicator of social
class is wealth—the total amount of money
that a person has or could have if she sold
off all her assets. If you take all the money in
someone’s bank and retirement accounts,
and add the value of everything they own—
cars, perhaps a home, property, anything
they have invested in the stock market, and
anything else that they could sell—the
resulting total amount is their wealth.
Although there is often a strong connection
between income and wealth (that is, people
who earn high salaries also often own a lot of
wealth), this is not always the case. You could have wealth from sources such as savings,
investments, real estate, and inheritance, even if you don’t earn a high income, or any
income at all.
Factory workers, a typical working-class job.
(Source: Wikimedia Commons)
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The amount of money we make or have is not the only factor that may determine our
social class. Education and occupation are also often included in the mix. Both
characteristics—how far we went in school and what kind of job we have—are linked with
income and with each other.
The social class structure of the United States
Over 30 years ago, an undergraduate student at Harvard University walked into a
public housing project outside of Boston and began research for his senior thesis. Little did he
know that he was laying the groundwork for what was to become one of the most well-known
sociological studies of social class in the United States. Jay MacLeod’s Ain’t No Makin’ It is a
story of two groups of teenagers who lived in the housing project: The Brothers, a
predominantly Black peer group, and the Hallway Hangers, who were predominantly White.3
MacLeod followed the Brothers and the Hallway Hangers from their teenage years into
young adulthood and then into middle age. He documents their dreams, aspirations,
successes, and failures. Ain't No Makin’ It demonstrates that social class can be a complicated
concept to understand. It’s often ignored and unacknowledged. Even though it had a
significant impact on the life choices and chances of the Brothers and Hallway Hangers, social
class was not part of their vocabulary. This is true for the majority of Americans today: Most of
us don’t speak about social class regularly. In the rare instances when we do talk about social
class or are asked to identify our own social class position, Americans almost always say we
are middle class.4
If we want to understand the important impact that social class has on our lives, we
can’t rely on the simplistic model of lower, middle, and upper classes. We need to account for
multiple factors such as income, wealth, education, and occupation. We use Dennis Gilbert’s
model of the class structure that relies primarily on income, occupation, and education.5
Although Gilbert does not factor in wealth, since it is often difficult to measure, we can see
how wealth is connected to these other three factors and how it might influence our social
class standing.
Gilbert’s model includes six social classes that are situated within three broad
categories. At the top is the first category, the privileged classes, made up of what he calls
the capitalist class and the upper-middle class.
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The capitalist class (commonly known as the
top 1%) makes money from the things they own:
businesses, real estate, stocks, and bonds.
Although the 1% may work, they usually do not
gain their tremendous wealth from their annual
salary. Instead, they are part of the super-rich
because the things they own (their wealth) bring
them a continual stream of lucrative profits.
The second group in the privileged class
category is the upper-middle class. Making up
about 14% of the population, these well-educated
individuals rely on their high incomes from jobs to catapult them into this category. Typical jobs
among this group include business managers, doctors, lawyers, accountants, and some small
business owners. Gilbert includes a sub-category at the top of the upper-middle class called
the working rich. Although relatively small in size, this group includes individuals whose annual
incomes are well into the six-figure range. One of the main features that distinguishes this
group from the capitalist class is that the working rich rely on their salaries to maintain their
class position.
The second category in Gilbert’s social-class model is called the majority classes. Here
we have about 60% of the population, evenly split between the middle class and the working
class. People in the middle class are likely to have a high school diploma and some college
experience (an increasing number even have a bachelor’s degree). They work as teachers,
nurses, master craftspeople (plumbers, electricians, carpenters), and lower-level managers.
Just below them is the working class. These individuals have probably completed high school
or a trade school; they typically work as office support (secretaries and administrative
assistants), retail sales workers, factory workers, or low-paid craftspeople.
As you consider the distinctions between the middle class and the working class, you
may be thinking of examples of people you know who don’t quite fit into this model. That’s not
surprising. As Gilbert points out, the distinction between the middle class and the working class
can be fuzzy. You may know someone who has only a high school education but works in an
occupation and earns a yearly salary that puts them in the middle class. On the other hand,
some people may have a higher level of education (such as a college degree) but work in
jobs that place them in the working class, either by choice or because they can’t find a better
job. Determining social class is not an exact science. Instead of relying on just one or two
factors such as income or education, we need to consider the interplay between these
factors.
The third and final category in Gilbert’s model is the lower classes. Making up about
one-quarter of the U. S. population, this group includes the working poor (15%) and the
Eye surgeon, an example of an
upper-middle-class job. (Source)
Social Class, Inequality, & Poverty (Fall 2021)
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underclass (10%). Both have some education, but most do not have more than a high school
diploma.
The working poor are typically employed in insecure and low-wage jobs such as
janitorial and cleaning services, manual labor, landscaping, restaurant support (fast food, wait
staff, line cooks), and other service industries. Because the jobs held by the working poor do
not generally provide much in the way of benefits (such as medical, dental, or vision care;
paid vacations; retirement accounts), the working poor are more likely than social classes
above them to face financial insecurity and instability. Many workers in these jobs also
encounter unpredictable and inflexible work schedules, putting them in stressful and
precarious situations since their income may vary from week to week.
Author Barbara Ehrenreich tried to survive
on these types of low-wage jobs in order to
understand the daily struggles of the working poor,
an experience described in her book Nickel and
Dimed: On (Not) Getting By in America. She
worked as a diner waitress, motel maid,
housecleaner, and Walmart salesperson and
found it nearly impossible to cover the cost of rent,
gas, and meals. Benefits that the middle and
upper classes may take for granted, such as paid
sick leave, didn’t exist at these jobs; when
Ehrenreich was sick, she had to go to work anyway
because she couldn’t afford to lose a day’s wages. As she pointed out, long days on the job,
sometimes followed by a shift at a second job just to make ends meet, leave low-wage
workers with little energy or spare time to look for better jobs or to attend college.
Going to work sick can even lead to death, as was the case for Augustín Rodriguez, a
longtime employee at a Smithfield Foods meatpacking plant in South Dakota. His death was
tied to a COVID-19 outbreak at the facility, which offered a $500 bonus to workers who didn’t
miss any shifts during the month of April, 2020, at the beginning of the COVID-19 pandemic.6
Fast-food workers on strike for higher pay.
(Source)
Social Class, Inequality, & Poverty (Fall 2021)
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Table 1: Gilbert’s Model of the Social-Class Structure in the United States7
Class, % of Households
Source of Income,
Occupation of Main
Earner
Typical Education
Typical Household
Income, 2012
Privileged Classes
Capitalists, 1% Investors, executives,
heirs
Selective college or
university, often
graduate or
professional school
$1 million
Upper middle, 14% Upper management
and professionals,
successful small
business owners,
including the working
rich
College, often
graduate or
professional study
$150,000
(working rich:
$500,000)
Majority Classes
Middle, 30% Lower-level
managers,
semiprofessionals,
nonretail sales
workers, craftsmen
At least high school,
often some college
$70,000
Working, 30% Machine operators,
low- paid craftsmen,
clerical workers, retail
sales workers
High school $40,000
Lower Classes
Working poor, 15% Most service workers,
laborers, low-paid
machine operators,
and clerical workers
At least some high
school
$25,000
Underclass, 10% Unemployed or part-
time work; many
depend on public
assistance and other
government programs
Some high school $15,000
At the bottom of Gilbert’s model is the underclass. They may be part-time workers,
unemployed, or may have inconsistent and unreliable work opportunities (such as seasonal
work that is only available for part of the year). Many rely on public assistance benefits, which
have been shrinking over the past twenty years. Although their financial insecurity forces this
group to rely on public assistance to help pay for food, shelter, and clothing, they actually
receive less in government benefits than the majority and privileged classes.8 While the lower
classes may receive limited benefits in the way of food, housing, and tax subsidies, the
Social Class, Inequality, & Poverty (Fall 2021)
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wealthier classes gain significantly more valuable benefits through government policies that
allow them to drastically lower the amount they owe in taxes. The ability to write off expenses
such as part of their mortgage interest payments (which is most valuable for those with the
most expensive homes), deposits into retirement accounts (which low-income workers are
often unable to afford), and profits from certain types of stock trading or capital gains are all
tax benefits provided to more privileged Americans.
Is social class ascribed or achieved?
As you think about the descriptions and characteristics of the various social classes, you
are probably locating yourself somewhere in Gilbert’s model. You may even realize that
you’re in a different social class than the one you thought you were in. Maybe you grew up
assuming you were in the middle class (as many people do), but according to Gilbert you fit
into a different category. As you ponder where you fall on this social class spectrum, you might
also consider how you actually ended up in that particular social class location. Did you use
your own income, education, and occupation or did you use your parents’? Did you receive
your social class through birth or is it something you accomplished through your own efforts?
These questions reflect an important
distinction discussed in the Social Structure and
the Individual chapter: the difference between
ascribed and achieved statuses. As you’ll recall,
an ascribed status is one you acquired when you
were born or that you take on involuntarily later
in life. In contrast, you gain an achieved status at
least in part through your achievements, abilities,
or efforts.
When you were born, you automatically
entered into the social class of your parents or
guardians. You did not get to choose if you were born into the capitalist class or the working
poor. But the social class ascribed to us at birth is not necessarily the social class we have
when we become adults. For example, nearly 30% of students entering four-year colleges and
more than 50% of students who enter two-year colleges are first-generation students—neither
of their parents completed college.9 Most of these students are probably in college because
they view education as a way to achieve a higher-paying job and a higher social class than
their parents.
The distinction between ascribed and achieved social class status is particularly
relevant when we try to understand social inequality. There is a long-standing assumption,
particularly in the United States, that social class is largely an achieved status. Most people
believe that your position in the social class structure depends mostly on your own individual
Children born into poverty. (Source)
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efforts: are you motivated, do you work hard, do you make smart financial decisions, and are
you willing to go the extra mile?
But the idea that our social class standing is based on our own merit is not altogether
accurate. Consider the demographics of the CEOs of the Fortune 500—a list of the 500 largest
and most profitable companies in the U.S. In 2021, this list contained only 41 women CEOs
(8.2%) and just 4 African American CEOs (0.8%). And 2021 is the first year two Black women
have been Fortune 500 CEOs at the same time.10 Given that women make up nearly 51% of
the U.S. population and African Americans comprise a little over 13%, we might ask why CEOs
of Fortune 500 companies are overwhelmingly White men. Are women and African Americans
just not working hard enough or not motivated enough to lead the biggest companies in
America? Or is something about their race and gender (both ascribed characteristics) holding
them back from making it to the top?
Table 2: SAT Scores and Family Income
Family Income
Critical Reading
Mathematics
Writing
$0-$20,000 435 462 429
$20,000-40,000 465 482 455
$40,000-60,000 487 500 474
$60,000-80,000 500 511 486
$80,000-100,000 512 524 499
$100,000-120,000 522 536 511
$120,000-140,000 526 540 515
$140,000-160,000 533 548 523
$160,000-200,000 539 555 531
More than $200,000 563 565 586
Source: College Board11
Another example might hit closer to home. You may have taken the SAT, ACT, or
another standardized test at some point. Did you know that the best way to predict a
student’s performance on these college entrance exams is to measure their family income? As
Table 2 shows, if you want to do well on the SAT, your best strategy is to be born into a wealthy
family.
One reason for this relationship between social class and educational achievement is
that parents with higher incomes have more resources to help their children succeed
academically. As Annette Lareau demonstrates in her book, Home Advantage, although
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parents from all social classes have similar aspirations for their children, those with greater
financial means can significantly boost their kids’ learning by stocking their house with lots of
books to read, sending their children to higher-quality daycares and schools, and paying for
tutors and test preparation courses, which parents with lower incomes often can’t afford.12
And as we will see in the next section, such advantages (or disadvantages) help explain why
many people reproduce their ascribed social class position.
Social mobility
“Don’t let somebody ever tell you, you can’t do
something. If you want something, go get it. Period.”
These lines are from the movie The Pursuit of
Happyness, based on the life of Chris Gardner.
Gardner went from being homeless to working in the
finance industry and later became an inspirational
speaker. In moving from a life of poverty to an
achieved social class of wealth and comfort, Chris
Gardner’s story exemplifies the rags-to-riches narrative
of the American Dream.
The American Dream is a strongly-held and
much-cherished belief in the United States. We are told
that with hard work, determination, and a “can do” spirit, it’s possible to be born into a
working poor or even an underclass family and eventually make it into the more privileged
classes. The American Dream suggests that an ascribed social class should not hold you back
from becoming who or what you want to be. As long as you work hard, have a good attitude,
and don’t give up, you can live your dreams.
When people like Chris Gardner move from an ascribed social class position to a new
achieved social class position, they have experienced social mobility. Upward mobility, which
is most often discussed in the context of the American Dream, occurs when someone moves
from a lower social class position to a higher one. This form of mobility is obviously the one most
of us would prefer.
But we can also experience downward mobility—dropping into a lower social class. A
decline in social class standing may occur due to factors such as being laid off, choosing to
pursue a less lucrative career path than your parents, making bad financial decisions, or
getting divorced (a common cause of downward mobility for women).13 It can also be
caused by issues entirely outside our control, such as entering the job market during a
recession.
The idea of the American Dream is regularly invoked by politicians, educators, religious
leaders, and media pundits. We also have shining models of the American Dream like Oprah
Chris Gardner. (Source: Wikimedia
Commons)
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Winfrey, who went from a childhood of poverty and abuse to become America’s first Black
billionaire, and Jay-Z, who lived in a housing project and sold drugs before becoming a
billionaire with impressive real estate and art collections.14 The idea that the American Dream
is alive and well is so pervasive that most people don’t even question it. Many of us just assume
that upward social mobility is the norm. “The sky's the limit,” to borrow a song title from the late
Notorious B.I.G.
Figure 1: Upward Mobility by Year of Birth
Source: The Equality of Opportunity Project15
But sociologists often refer to the American Dream as a myth—and with good reason.
As you can see from Figure 1, the likelihood that individuals will earn higher incomes than their
parents has been in steady decline since the 1940s. Currently, only about 50% of children will
experience upward mobility. And for African-Americans who want to live the American Dream
like Chris Gardner, Oprah, and Jay-Z, the odds are even lower. Compared to their White
counterparts, Blacks are not only more likely to be born into poverty but also much more likely
to stay in poverty throughout their lives. They are also more likely to experience downward
mobility—the reverse of the American Dream.16
The American Dream is such a powerful idea that it can feel unpatriotic to challenge it.
However, inspirational examples of individuals from humble origins who battle through
adversity and eventually triumph do not accurately reflect reality for most Americans. These
stories of shining stars make it seem as if achieving the American Dream is equally available to
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everyone. But thinking back to the story of Alex that began this chapter, it should be obvious
that individuals like him face many more obstacles and disadvantages in their pursuit of the
American Dream than more privileged individuals do. As a result, social-class inequality is not
only widespread but is also increasing at a rapid pace—both in the United States and around
the globe.
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INEQUALITY
What are some indicators of inequality in the U.S.?
How is inequality related to ascribed characteristics like race and gender?
To what extent is inequality increasing in the U.S. and across the globe?
In 2017, Yahoo announced that Marissa Mayer, the CEO, would leave the company
once its acquisition by Verizon was finalized. Mayer received a $23 million severance
payment; the full value of her severance pay and stock
options was nearly $260 million. That’s not a bad sum of
money for being fired.
While the amount of money Mayer received for
leaving the company may be startling, it’s not even close to
the highest severance payments in recent history. Consider
some of these final paydays: Jack Welch, CEO of General Marissa Mayer, former CEO of Yahoo.
(Source)
Social Class, Inequality, & Poverty (Fall 2021)
Page 15
Electric, received over $400 million; Lee Raymond, CEO of Exxon Mobile, received over $300
million; William McGuire, CEO of UnitedHealth Group, received nearly $300 million; and
Edward Whitacre, CEO of AT&T, received well over $200 million.
Consider the case of Robert Marcus. He became CEO of Time Warner at the beginning
of 2014. A few months later he negotiated himself out of a job by agreeing to sell the
company to Charter Communications. For those few months he worked as CEO of Time
Warner, Marcus walked away with a severance package of over $90 million.
And during the COVID-19 pandemic, when millions of workers filed unemployment
claims, the top CEOs actually gained wealth. The wealth of Amazon CEO Jeff Bezos and
Facebook CEO Mark Zuckerberg grew by billions of dollars.17 Bezos’s net worth is close to $200
billion, $80 billion of which has been gained during the pandemic. His ex-wife, MacKenzie
Scott, has a net worth of $60 billion, largely due to the value of her Amazon stock. Her wealth
continues to accumulate at a rapid pace even though she’s donated billions of dollars to a
variety of philanthropic activities.18
It might be hard to grasp what these figures actually mean. Most of us are probably
more comfortable talking about hundreds of dollars than hundreds of millions of dollars. Here’s
a little context: The median household income in the United States in 2019 was $68,703; half of
American households make more than this, and half make less.19 To make as much money as
Robert Marcus made in just a few months as CEO of Time Warner, a typical household in the
U.S. would have to work about 1,600 years. It would take over 7,000 years for the typical
household to earn the severance payment given to former General Electric CEO Jack Welch.
What do you think of these numbers? They’re just one measure of the very large and
increasing class inequality in the United States. In this section we consider some common
indicators of social class inequality as a way to more fully understand the growing gap
between the poor and the rich. The gap between CEO pay and the incomes of average
workers are a good place to begin because it highlights how large the gulf has gotten
between those at the top of the economic ladder and the rest of us.
Consider Figure 2, which shows how much CEO pay has increased in the past thirty
years compared to average worker salaries. Since 1987, the average CEO has seen his (and
the CEO is usually a he) compensation increase 1,000%. The compensation of an average
worker has barely increased at all. DoorDash CEO Tony Xu recently received a $414 million
compensation package. CEO pay increased 14.1% in 2020 compared with 2019, while workers
got a 1.9% raise.20 In 1987, the average yearly salary was a little more than $18,000.21 If a
worker making that salary in 1987 enjoyed the 1,000% increase that the typical CEO has
enjoyed, the worker would make $1.8 million a year now. Instead, the typical worker today
makes just under $50,000, the equivalent of about $24,000 in 1987. When you adjust for
inflation, there has been hardly any growth in worker pay.
Social Class, Inequality, & Poverty (Fall 2021)
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Figure 2: CEO Pay and Worker Pay, 1978-2017
The growing gap between the poor and the rich
Comparing the compensation of CEOs to typical workers highlights some of the
extreme levels of inequality that exist in the United States. We can gain further insight if we
refer to some other patterns.
Let’s begin with income inequality. We often hear that the gap between the rich and
the poor is growing every year. This becomes readily apparent when we look at the change in
income levels over time. For the overwhelming majority of Americans, income has been more
or less stagnant for nearly forty years (Figure 3). While the top 1% of the population has
enjoyed a huge increase in their incomes, and the top 5% to 20% have seen modest income
gains, the income of the bottom 80% of the population has remained virtually the same. Since
about 1979, only the privileged classes in the United States (like the CEOs in Figure 2) have
experienced income growth. For the majority classes and lower classes, wages today are
more or less equal to what they were forty years ago.22
Do you think this income inequality translates into increased wealth inequality as well? If
you recall, wealth is a measure of the total worth of everything someone owns. When we talk
about the rich getting richer and everyone else getting poorer, we’re not only talking about
income inequality; wealth inequality is just as important.
It’s probably not too surprising to learn that wealth inequality is closely associated with
income inequality, as Figure 4 suggests; it depicts the enormous gap between the rich and the
rest of society over the past 30 years. Notice how the shapes of the lines in this graph mirror the
lines in the income graph (Figure 3). Once again, we see that the privileged classes are
Social Class, Inequality, & Poverty (Fall 2021)
Page 17
accumulating most of the wealth in the country while the financial gains for those in the
majority and lower classes are modest at best.
Figure 3: Average Pretax U.S. Income, 1979-2007
Source: Wikimedia Commons
The gap between the rich and
the rest of us, or the haves and have-
nots, is even more evident when we
also consider race. As Figure 5 illustrates,
the amount of wealth we have is
strongly correlated with race and
ethnicity. The wealth of Whites dwarfs
the wealth of Blacks and Hispanics.
Remember, when we discuss
wealth we’re not focusing on income
earned from employment or
investments. We’re talking about the
amount of money and assets that
someone has accumulated over time
Figure 4: Family Wealth in the United States, 1989-2013.
(Source: Congressional Budget Office)
Social Class, Inequality, & Poverty (Fall 2021)
Page 18
from various sources. Two individuals can have the same yearly income but drastically
different levels of wealth. The more wealth you have, the more opportunities you have to
increase wealth, pass that wealth on to your children, and be protected against life events
that might create enduring financial hardships. This is a crucial point for understanding how
social inequality continues to rise: having some wealth makes it easier to get more of it.
Figure 5: Average Family Wealth by Race/Ethnicity
Many social scientists argue that inequalities in wealth are the most significant factor in
the reproduction of inequality, particularly in regard to race and ethnicity.23 Sociologist
Thomas Shapiro spent the past two decades documenting the wealth gap between Blacks
and Whites. His research demonstrates quite clearly that many of the problems that Blacks
face—high rates of poverty, mass incarceration, and joblessness—can be directly connected
to the great wealth gaps between Black and White individuals.24
Shapiro details the cumulative advantages—
built up benefits and resources—that allow people
to increase their wealth. On average, White
individuals have been able to pass much more
money to their children than Blacks have because
they have not been saddled with the various types
of discrimination, particularly in federal housing
policies, that have severely reduced Blacks’
opportunities to build wealth. For instance, Black
Americans suffered loss of lives, homes, and Shoe-shine worker and client in Washington, D.C.
(Source)
Social Class, Inequality, & Poverty (Fall 2021)
Page 19
businesses in the Tulsa Race Massacre of 1921 and the Elaine, Arkansas massacre of 1919,
making it impossible for families to develop generational wealth.25 Without being
systematically oppressed by slavery, violence, Jim Crow segregation, and institutional
discrimination, Whites have been able to increase their family wealth generation after
generation, whereas most Black families have never been able to anchor themselves
financially or have done so only very recently.
This whole process of cumulative advantages is largely invisible to Whites who benefit
from it. Most Whites cling to the notion of the American Dream and see their success as largely
the product of their own doing. Even those who have undeniably benefited financially from
their relatives (or from their ascribed social position) remain convinced that their social-class
status is wholly achieved. This belief that personal effort and smart individual choices can
overcome generations of structural inequality also contributes to the racial wealth gap, the
difference in accumulated wealth between different races and ethnicities. As long as
policymakers embrace the idea that social class is achieved, they will enact policies that
reflect this belief and ignore the external factors that produce and perpetuate social
inequality. Proposals to slash federal housing vouchers, food assistance, and Medicaid for low-
income individuals are indicative of this type of thinking.26
One idea to reduce the racial wealth gap is called “baby bonds,” a proposal from
Darrick Hamilton and William Darity. An account would be established by the federal
government for each child at birth, with the amount of money tied to the parents’ wealth. For
instance, a middle-class child might receive $20,000. Upper-class children would receive less,
poorer children would receive more. When the child turns 18, the funds become available to
use for college, a business venture, or to help buy a home. Over time, this program would help
alleviate the racial wealth gap and improve social mobility.27
The inability to recognize the existence and persistence of structural inequalities can be
demonstrated when we add more characteristics to the mix. When we look at the intersecting
effects of race, gender, education, and income, we see quite clearly that not everyone
enjoys the same path to financial success. As much as we may want to tout our own individual
efforts and accomplishments, there is no denying that some individuals are hampered by the
persistence of racism and sexism in American society.
Table 3 should hit close to home for many of you. Focusing on those aged 25-34, this
table shows how income is affected by gender, race, and education. You don’t have to study
the table very long to see some telling trends. In every category of educational attainment,
men make significantly more than women. Race also has an effect, with Blacks and Hispanics
almost always making less than Whites and Asians, even when they have the same level of
education.
Social Class, Inequality, & Poverty (Fall 2021)
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Table 3: Median Earnings (in 2015 Dollars) of Full-Time, Year-Round Workers Ages 25-34, by
Race/Ethnicity, Gender, and Education Level, 2013-2015
Race/Ethnicity Gender Less than
HS Diploma
High
School
Diploma
Some
College,
No
Degree
Associate
Degree
Bachelor’s
Degree
Advanced
Degree
Asian Female $21,900 $25,900 $32,800 $32,200 $52,500 $66,400
Male $26,500 $30,500 $35,600 $36,200 $61,900 $80,200
Black Female $21,100 $25,400 $27,500 $31,200 $41,200 $50,900
Male $26,700 $27,800 $35,300 $36,500 $48,500 $52,600
Hispanic Female $21,000 $26,400 $30,100 $29,500 $44,800 $53,700
Male $25,200 $31,100 $36,300 $41,400 $50,500 $61,700
White Female $21,300 $27,400 $31,100 $33,200 $46,000 $55,500
Male $31,900 $36,700 $40,800 $45,000 $56,500 $66,900
All Female $21,100 $26,900 $30,500 $32,000 $45,800 $55,800
Male $26,400 $33,400 $38,400 $42,600 $55,600 $67,400
Source: Education Pays 2016: The Benefits of Higher Education for Individuals and Society28
Probably the most obvious fact from Table 3 is the importance of education. As
someone completes more education, their income level increases. This is true for every gender
and race; however, access to higher education is not evenly distributed. Race and class play
a large role in determining who attends and who graduates from college, as well as the type
of college they attend. The higher you are in the social class structure, the more likely it is that
you will attend and graduate from college. When we add race and ethnicity to the mix,
students of color are more likely than their White peers to attend community colleges or for-
profit colleges.29
You should see a pattern developing that helps explain the persistence of inequality.
Those of us who have ascribed characteristics that are not as advantageous as others (such
as being born into a lower social class, being a person of color, or being a woman) likely face
more structural obstacles than those who have more privileged ascribed characteristics.
Although many of us have faith in the idea of meritocracy, or a system where personal
responsibility and individual effort are the sole determinants of success, decades of research
make it clear that some individuals have an easier path to financial success than others.
Think about the idea of meritocracy in the context of the Operation Varsity Blues
scandal, which involved wealthy families paying bribes to have their children accepted by
prominent universities like Yale, Stanford, and Georgetown. In one example, Lori Loughlin and
Mossimo Giannulli plead guilty to paying $500,000 so their daughters could attend the
University of Southern California as recruits for the crew team. If paying a half-million-dollar
bribe isn’t egregious enough, their daughters weren’t actually involved in crew! Photographs
of the daughters on rowing machines were used to make it look like they were crew athletes.30
Social Class, Inequality, & Poverty (Fall 2021)
Page 21
In writing about the scandal, Shamus Khan notes that it’s commonplace for rich families
to spend enormous amounts of money so their children can accumulate the kinds of
experiences that impress elite colleges. He writes “…almost all rich families buy their kids into
elite colleges by purchasing advantages they pass off as talents, whether by way of sailing
lessons or elaborate vacations planned with an eye on admissions essays. We view these
vastly overrepresented children of the rich as having earned their spots. And that’s the great
American delusion we call ‘meritocracy.’”31
In trying to understand social class inequality in America, it’s imperative that we
consider how ascribed social class, race, and gender propel some individuals forward while
holding others back.
U.S. inequality in global context
Now that you have a better understanding of inequality in the United States, you may
wonder how we stack up against other countries. Social scientists use a statistical measure
called the GINI index to compare inequality. The GINI index looks at how family income is
distributed in a country. If everyone in a country had the same income and there was total
equality, the GINI score would be 0. If one person in the country had all of the income, it
would cause total inequality and the GINI score would be 1. No country actually has a score
of 0 or 1, but countries that have less inequality are closer to 0 and countries that have a lot of
inequality are closer to 1.
Among the 31 most developed nations in the world, the United States has the second-
highest GINI index, behind only Chile. This ranking is based on after-tax income, not before-tax
calculations. In most countries, the tax structure reduces inequality and brings down the GINI
index by taxing affluent individuals at significantly higher rates than the lower or middle
classes. In fact, a number of countries rank quite a bit higher in inequality than the United
States before taxes are taken into account. But because those countries have tax policies that
are more favorable to the poor than the rich, their GINI index is lowered more significantly by
taxes than it is in the U.S.32
As drastic as inequality is in the U.S., it is nothing compared to the inequality that exists in
the global context. According to a report from Oxfam International, global levels of class
inequality have reached astounding levels:33
The world’s 8 richest men have the same amount of wealth as the bottom 50% of the
world’s population.
The richest 1% of the world’s population owns more wealth than the rest of the 99%
combined.
The incomes of the poorest 10% increased by less than $3 a year between 1988 and
2011. During this same period, the incomes of the richest 1% increased by 182 times.
Social Class, Inequality, & Poverty (Fall 2021)
Page 22
7 out of 10 people live in a country
that has seen a rise in inequality in
the last 30 years.
Each of the 100 richest CEOs earns as
much in a year as 10,000 people
working in a garment factory in
Bangladesh.
There has been an economic
downturn in the global economy during the
COVID-19 pandemic, with millions fewer
people reaching the middle class than
what was anticipated prior to the
pandemic. The number of people in
poverty worldwide has increased significantly. The rise in global poverty during the pandemic
is strongly impacting South Asia and Sub-Saharan Africa, in particular.34
By all measures, these global inequalities are increasing every year. In fact, most
estimates suggest that within the next 25 years, the world may see its first trillionaire. But as the
wealth of the richest 1% increases to stratospheric levels, the world’s poor continue to suffer
from malnutrition and starvation, lack of access to clean water, exposure to sewage and
wastewater, illiteracy, poor housing, unsafe working conditions, and shortages of health care
providers and supplies. Poverty is the last topic of this chapter, but in many ways it’s the most
important for all of us, no matter our social class, to acknowledge and address. As former
South African prisoner and President Nelson Mandela once said, “As long as poverty, injustice,
and gross inequality exist in our world, none of us can truly rest.”
REVIEW SHEET: INEQUALITY
CLICK THE LINK FOR:
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Dharavi Slum, Mumai, India. (Source)
Social Class, Inequality, & Poverty (Fall 2021)
Page 23
POVERTY AND HOMELESSNESS
What is poverty and how is it measured?
Who is at risk of poverty?
Who are the working poor?
How has the homeless population changed in recent years?
What factors increase the risk of homelessness?
Desmond Spencer is a 39-year-old resident of Beaverton, Alabama. He dropped out of
school at 14 and eventually completed his GED. Before age 20, Desmond went to prison for
burglary. When he was released from prison his life improved somewhat when he found a
steady job as a roofer. But he suffered a knee injury when he fell off a roof on a job. He never
went to the doctor for his injury because he didn’t have health insurance. He eventually lost his
job during a difficult period in the economy. Desperate and unable to find steady work,
Desmond struggled with the decision to apply for federal disability benefits. Several people
close to him collect disability benefits, including his stepfather (who broke his back in a car
accident) and a cousin (who has bipolar disorder and receives $701 per month). Desmond
would prefer to work but was turned down for jobs at an upholstery factory and a horse-trailer
shop. He failed a math exam that would have allowed him to enroll at a community college
to take a welding class. Desmond makes $425 a month from a friend who pays him to take
care of his horses. Other than that, he relies on money from his parents and their disability
support checks. His mother finally convinced him to call the Social Security office and apply
for disability benefits. The question “Is this a permanent disability?” used to screen applicants
for eligibility stung him, but he answered yes.
The Washington Post article featuring Desmond reports that 13 million working-age
adults receive federal disability payments, an increase from 7.7 million in 1996. Rural America,
including where Desmond lives, has experienced the fastest increase in disability rates.35
Desmond's story is about poverty in America. Many of us have a specific image in mind
when we think of people who are poor, but their lives are remarkably diverse. In the final
section of the chapter we explore the persistent social problem of poverty and one of its most
visible forms: homelessness.
Social Class, Inequality, & Poverty (Fall 2021)
Page 24
What is poverty?
There are various ways to define, and to think about, poverty.36 One is to consider the
basic necessities of life, such as food, shelter, and clothing. People without these necessities
would be considered poor. This is absolute poverty. The U.S. Census Bureau takes this
approach to measuring poverty. The Census uses poverty thresholds to estimate the number
of Americans in poverty each year. For example, the official poverty threshold in 2020 was
$26,246 for a family of two adults and two children.37 This poverty threshold (also known as the
poverty line) establishes the minimum income level that the federal government says is
required to buy the basic necessities of life. According to the Census Bureau, in 2019 there
were 34 million Americans in poverty (4.2 million fewer people than 2018), for an official
poverty rate of 10.5% of the population. The poverty rate has decreased 4.3 percentage
points since 2014.38 However, the most recent Census Bureau figures are based on data from
before the COVID-19 pandemic.39
Another way to calculate poverty is to look at relative poverty. This measure takes into
account the relative economic status of people in a society by looking at how income is
distributed; those in the lowest income brackets would be considered poor in comparison to
others in their society. Mark Rank and Thomas Hirschl focus on the likelihood of experiencing
relative poverty between the ages of 25 and 60.40 They find that those who are younger (ages
25-34), non-White, female, not married, with 12 years or less of education, or who have a work
disability are significantly more likely to encounter poverty.
What does poverty mean to those who experience it? Being poor means having to
compromise and make difficult choices about food, shelter, clothing, healthcare,
transportation, and other needs. It means sometimes choosing between putting food on the
table and paying the heating bill to stay warm. It can mean being stuck in a high-crime
neighborhood with low-quality schools. As Mark Rank writes, “poverty extracts a heavy toll
upon those who fall into its ranks, particularly children. Countless studies have demonstrated
the physical and psychological health costs for children experiencing poverty.”41
Social Class, Inequality, & Poverty (Fall 2021)
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Figure 6: U.S. Poverty Levels 1959-2016
Source: Wikimedia Commons
Characteristics of the poor
Poverty is not an equally shared experience. In the U.S., several characteristics place
some groups at more risk of poverty than others:
1. Household type – If you are in a household headed by a single mother, you are much
more likely to be poor than those in married-couple or single-father families.
2. Education – There is a high rate of poverty among adults who have not completed high
school. People without high school degrees are more than six times as likely to be poor
as those who have completed college.
3. Paid work – Those with no income are substantially more likely to be poor than are those
who earn even low incomes. The risk of poverty falls as someone’s attachment to the
labor market increases. Put simply, working for pay (especially high pay) is a poverty-
prevention tool.42
4. Disability status – For people aged 18 to 64 with a disability, the 2019 poverty rate was
22.5%, which amounted to 3.3 million people living in poverty.43 The unemployment rate
is high for individuals with disabilities. Even if their disabilities don’t prevent them from
working, they may face transportation challenges getting to work or encounter
employers who are hesitant to hire people with disabilities.44
Social Class, Inequality, & Poverty (Fall 2021)
Page 26
5. Race – The poverty rate is approximately two times higher for African Americans,
Hispanics, and Native Americans than it is for Whites and Asian Americans. One factor
in the racial poverty gap is unemployment; the groups with higher poverty rates all
have higher unemployment rates than Whites and Asian Americans. The economic
impact of COVID-19 has been especially harmful to Black workers, who have been
more likely to lose jobs during the pandemic.45 Experiencing poverty within a family for
three generations is over 16 times as frequent among Black adults as among White
adults. This means one in five Black Americans are experiencing poverty for the third
generation in a row, with one in a hundred White Americans experiencing poverty for
three generations. Families being poor for three consecutive generations is almost
uniquely a Black experience.46
6. Region – The South has the highest poverty rate, while the Northeast has the lowest.
However, differences in poverty rates between regions are narrowing.47
7. Concentrated neighborhood poverty – High-poverty neighborhoods are Census tracts
where at least 40% of the population is poor. This concentration of poverty is significant
in light of the various social problems that exist in high-poverty areas (for instance,
crime, underfunded public schools with high dropout rates, social networks that lack
connections to good jobs). Growing income inequality, and income segregation in
neighborhoods as people of different classes are less likely to live in the same
neighborhood, has exacerbated concentrated poverty.48 Research shows that when
White families live in a poor neighborhood, it is typically for a single generation; their
children are able to move to a higher-income area. In contrast, neighborhood poverty
is most commonly multigenerational for African-American families.49
8. Child poverty – In 2019, 10.5 million children (those under 18 years old) lived in poverty;
children represented 30.8% of all people in poverty.50 Poverty levels among children
have remained high since the early 1970s. A racial disparity in child poverty rates has
also existed for decades, with much higher poverty rates among African-American and
Hispanic children than for White and Asian-American children. Poor children have been
at risk of suffering food insecurity and housing insecurity caused by financial distress
during the COVID-19 pandemic.51 Changes to the Child Tax Credit in the American
Rescue Plan of 2021 are intended to significantly reduce child poverty. As part of the
legislation, eligible families will temporarily receive monthly payments of up to $250 for
each child 6 to 17 years old and $300 for each child under age 6.52
Social Class, Inequality, & Poverty (Fall 2021)
Page 27
Figure 7: U.S. Poverty Rates by County
(Source: Wikimedia Commons)
The working poor and the jobless poor
Maya Warren is one of millions of Americans who are working poor. She works as a
home health aide providing care to the elderly, earning about $300 a week. Late in her first
pregnancy, she took a second job as an Uber driver. The baby’s father does not have steady
income. When she went into labor the doctor recommended a Caesarean section (C-
section). This is major surgery that calls for 12 weeks of rest. However, six days after giving birth,
she had no choice but to go back to work driving for Uber.
Maya lives with her mother and is grateful for her support. Without her mother’s help,
she thinks she would be homeless. Her employer doesn’t provide paid family leave to home
health aides. The federal Family and Medical Leave Act (FMLA) allows workers to take up to 12
weeks of leave after a birth, but it is unpaid leave. And FMLA only applies to employees who
have worked at least one full year for their employer, and only if their employer has more than
50 employees. “You don’t work, you don’t get paid,” Maya explained, summing up her
situation and the reality of many low-income parents who don’t have the kinds of jobs that
come with paid family leave.53
Stereotypes of poor people are that they are lazy and don’t want to work. But millions
of poor people do work. Approximately 10.5 million individuals can be categorized as working
poor, defined by the Bureau of Labor Statistics (BLS) as people who spent at least 27 weeks
(half of the last year) in the labor force but whose incomes still fell below the official poverty
level.54 A BLS report reveals the following characteristics of the working poor:
Social Class, Inequality, & Poverty (Fall 2021)
Page 28
More women than men are classified as working poor.
Blacks and Hispanics are more than twice as likely as Whites and Asians to be working
poor.
Families headed by women are more likely to be poor than those headed by men.
Families with children under age 18 are more likely to be working poor than those
without children.
Married-couple families are less likely than families headed by a single parent to fall
below the poverty level.
Full-time workers are less likely than part-time workers to be working poor.
People with higher levels of education are less likely to be working poor. More
education means better access to higher-paying jobs.
Low earnings and periods of unemployment are key factors in falling below the poverty
line.
Service occupations account for nearly 40% of the working poor. Fast-food employees
are a good example of workers who struggle in low-wage service jobs. They are featured in
Katherine Newman's book No Shame in My Game: The Working Poor in the Inner City:55
Nadine comes from a poor family and has not yet finished high school. Her father died
during her childhood and her mother relies on public assistance. She dreams of leaving her
neighborhood and describes the building where she lives as disgusting and roach-infested.
Larry struggles to finish high school while he works, but is determined to do so. He can’t
remember a time when his mother worked. He hopes that one day he will be able to attend
college: “The only way you’ll be able to survive life is to get a good education.”
Roberta is a manager with a steady salary. She can make ends meet but still lives
paycheck to paycheck. She knows that an emergency or an unexpected bill will put her
immediately into major financial distress. She doesn’t make enough to save and wonders if
she’ll ever be able to retire.
Newman describes working poor people like Nadine, Larry, and Roberta as one
paycheck away from welfare. The working poor are constantly on the edge of getting fired
(often due to unreliable transportation or childcare for their children) or evicted. Many suffer
from inadequate housing, poor diets, bad schools, and lack of medical attention. It is a life of
being insecure and vulnerable.
As Newman points out, the U.S. economy has drastically changed over the past several
decades, with a sharp decline in high-paying jobs and a surge in low-paying jobs. The
economy now favors the well-educated, and high-paying jobs are especially hard for those
with lower levels of education to get.
Service workers have been deemed essential during the COVID-19 pandemic, placing
grocery store, retail, and fast-food workers at risk, leading some to participate in strikes for
better work conditions. Workers at one McDonald’s location said they were told to make
Social Class, Inequality, & Poverty (Fall 2021)
Page 29
masks using coffee filters. Delia Vargas was quoted as saying: “McDonald’s is treating us like
dogs. We don’t want to die for their hamburgers so we are going on strike, to protect
ourselves, our families and our communities.”56
The transformation of the economy has hurt people in a variety of places. William Julius
Wilson addresses the decrease in job opportunities for people in urban areas, especially in the
Northeast and Midwest.57 Think of Philadelphia, Chicago, and Detroit. A shift away from
manufacturing in these and other cities resulted in a decline in high-paying factory jobs for
people with less education. New jobs were more often located in suburban locations, creating
a challenge for city residents who don’t own cars and rely on public transportation. The
decline of manufacturing, plus lack of access to work in the suburbs, led to more joblessness.
These changes were especially damaging for African Americans in urban areas, since they
often found it difficult to move to the suburbs and lacked college degrees that might allow
them to pursue high-skilled jobs in cities. The rise of joblessness was also a factor in the
deterioration of neighborhoods: Families with more resources were able to move, leaving
behind poor families who often struggled to maintain their homes and yards.
In $2.00 a Day: Living on Almost
Nothing in America, Kathryn Edin and H.
Luke Shaefer shed light on the hardships of
living in poverty in places such as
Mississippi and Kentucky.58 The decline of
coal mining in eastern Kentucky and the
mechanization of farming in the Mississippi
Delta are part of the reason for high rates
of joblessness in these places. Imagine
poverty so extreme that you would sell
your children’s Social Security numbers for
cash (so people can use those numbers
for tax benefits). Or consider Jessica
Compton, who sells her plasma several
times a month to cover rent. The $30 she
receives each time is the only money to count on now that her husband, Travis, no longer gets
shifts to work at McDonald’s. They are three months behind on rent and worried they may be
evicted. Jessica and Travis are barely able to support themselves and their two children.
Homelessness
Dasani spent three years of her life at a homeless shelter in Brooklyn. The shelter’s
problems included spoiled food, mold, lead paint, bedbugs, roaches, discarded crack pipes,
and sexual misconduct by employees. This 11-year-old is one of more than 20,000 homeless
There's some protection from the rain but little from wind
and cold, making for a difficult wait for transportation to
work or school. (Source: Photo provided by the authors)
Social Class, Inequality, & Poverty (Fall 2021)
Page 30
children in New York City. One room was the main living space for Dasani, her parents, and
seven siblings, including a baby sister she is often responsible for feeding, changing, and
babysitting. Her parents are unemployed and suffer from drug addiction. She does her best at
school, admires her teachers, and made the honor roll, but is occasionally teased for where
she lives and the clothes she wears. A fight with a classmate lead to a week of suspension.
Prior to the shelter, Dasani and her family lived in a duplex, and before that, an
apartment. They were dependent on rent subsidies that eventually expired. Rent kept going
up; one-bedroom apartments cost $1,300 a month. The demand for public housing far
exceeds the supply. Families like Dasani’s are desperate for affordable housing at a time when
nearby condominiums sell for $1.5 million and brownstone homes for more than $2 million.
“If I could grant you three wishes, what would they be?” a school counselor asked
Dasani. She wished for a home, a lot of money, and three more wishes. One wish came true
when a space finally opened at another shelter. This shelter had an apartment with a kitchen,
a full bathroom, and two bedrooms. The mattresses are in good condition, a welcome
change from broken mattresses with exposed coils.
Dasani’s experience with homelessness
provides an introduction to one of America's most
devastating social problems.59 Someone is
homeless if they lack a fixed, regular, and
adequate nighttime residence.60 The homeless
population in the United States is established by
what is known as the point-in-time count. In late
January, communities across the country count
the number of homeless people living in
emergency shelters, transitional housing, or on the
street. From this data collection, we know that
580,466 people experienced homelessness in the
U.S. in 2020; 18% of those (106,364) were children.
Single individuals make up 70% of the
homeless population; the remaining 30% are
families. When we focus on individuals
experiencing homelessness on their own,
approximately 70% are men. But when we look at
homeless families, approximately 60% are
comprised of girls and women.
In 2020, the sheltered homeless (people staying in emergency shelters, transitional
housing programs, or safe havens) accounted for 61% of the homeless population, with the
remaining 39% experiencing unsheltered homelessness (their primary nighttime residence is a
Migrant Mother by Dorothea Lange (1936).
(Source: Wikipedia Commons)
Social Class, Inequality, & Poverty (Fall 2021)
Page 31
public or private place not designated for, or ordinarily used as, a regular sleeping space,
such as the streets, vehicles, or parks). Approximately 8% (or 37,252) of people experiencing
homelessness are military veterans.
Approximately 25% (or 110,528 people) of the homeless population experiences chronic
homelessness. A chronically homeless individual is someone with a disability who has a) been
continuously homeless for a year or more or b) has experienced at least four episodes of
homelessness in the past three years where the combined length of the homeless episodes is
at least 12 months. Disabilities include substance use disorders, serious mental illness,
developmental disabilities, posttraumatic stress disorder, cognitive impairments resulting from a
brain injury, or chronic physical illness or disability.
Keep in mind the challenging task of counting the homeless population. Suburban and
rural areas are difficult to cover. It’s hard to collect information on people sleeping in
makeshift locations, such as vacant lots and railway yards. These counts leave out people in
marginal living situations, such as prostitutes who stay in hotels paid for by clients.61 Young
people may try to hide their homelessness due to embarrassment, and may be reluctant to
report they are homeless when they encounter adults doing counts.62 For these reasons, point-
in-time counts are imprecise and may undercount the homeless population.63
Figure 8: Number of Homeless Individuals in the U.S., 2007-2017
Source: Data from U.S. Department of Housing and Urban Development 2017
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2017
5
40,000
5
20,000
549,928
553,742
5
60,000
5
64,708
5
76,450 5
80,000
5
90,364
6
20,000
6
623,788
621,553
6
30,227
6
37,077 6
40,000
6
39,784
6
47,258
6
60,000
People Experiencing
Homelessness
Social Class, Inequality, & Poverty (Fall 2021)
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In 2007, the homeless population was 647,258. The homeless population has decreased
since then, as the economy improved after the Great Recession that began in December
2007 and officially ended in June 2009. It wasn’t until 2013, several years after the end of the
recession, that the number of homeless individuals fell below 600,000. However, the homeless
population has increased each year from 2017 to 2020.
Martha Burt identifies three types of factors that create the conditions, such as extreme
poverty, that increase the risk of homelessness.64 The first type is structural factors such as
changes in the housing market, employment opportunities, criminal justice policies, and
institutional support for poor people and people with disabilities. The second type is individual
characteristics such as disabilities, mental illness, addiction, and a felony record. The third type
involves public policy. Effective policies can prevent homelessness and reduce the impact of
structural and personal factors that place people at risk of homelessness. “It would not be a
bad policy decision to provide every household that has a worst-case housing need with a
rent subsidy for as long as possible,” she says. Recently, policy approaches have shifted away
from emergency services for the homeless to a broader focus on preventing and reducing
homelessness. Strategies increasingly focus on permanent housing solutions.
The importance of affordable housing
Arleen Beale and her family have no stable housing. They have lived in a homeless
shelter. They have lived in an apartment where they couldn’t count on having running water.
And they have lived in an apartment complex described as a haven for drug dealers. They
were evicted on multiple occasions.
Arleen’s son Jori attended five different schools during seventh and eighth grades. Their
most recent home, the bottom unit of a duplex with a rent of $550 a month, was better than
some of the places they lived. But the rent used up nearly 90% of her public assistance check.
A long time ago, at age 19, Arleen rented a subsidized apartment for $137 a month. But she
left public housing to move in with a friend. She didn’t realize how hard it would be to get
back into public housing; the waitlist is long and moves slowly. Looking back, she regrets
leaving a place where she imagines she could still be. Unable to keep up with her current rent,
she is a few days away from another eviction.
As Matthew Desmond explains in his award-winning book, Evicted: Poverty and Profit in
The American City, the majority of poor renting families like Arleen’s spend more than half their
income on housing; nevertheless, millions are evicted annually.65 In Milwaukee, where
Desmond conducted his research, landlords legally evict roughly 16,000 adults and children
each year. A high percentage of Milwaukee’s evicted tenants are Black women. As Desmond
points out, incarceration is a significant force in the life of poor Black men, while eviction is a
significant factor in the life of poor Black women: “Poor Black men were locked up. Poor Black
women were locked out.”66
Social Class, Inequality, & Poverty (Fall 2021)
Page 33
The eviction crisis is expected to get worse. Temporary eviction moratoriums put in
place at the beginning of the U.S. COVID-19 outbreak in spring 2020 provided some protection
for renters. But when those moratoriums end, low-income and unemployed renters are at high
risk of eviction. Aaron Carr, founder and executive director of the Housing Rights Initiative,
says, “Allowing eviction moratoriums and expanded unemployment benefits to expire will
undoubtedly lead to a perfect storm of instability, homelessness, and human suffering.”67
The importance of having an affordable place to live cannot be overstated. If
someone is asked to identify the main necessities of life, a likely response is food, shelter, and
clothing. As Desmond explains in Evicted, “Without stable shelter, everything else falls apart.” A
stable home supports our psychological well-being, encourages social relationships, and
provides a consistent educational setting for children. When people are secure in a home, our
communities are made stronger. But millions of low-income households have limited options
for permanent affordable housing. Those with a record of eviction or bad credit scores face
rejection from landlords. Increasingly, the best option for many low-income Americans is to
seek temporary living situations in extended-stay hotels. Hotel living is so common that the
school system in Columbus, Ohio, makes 16 bus stops at hotels and motels. The Gwinnett
County school system in Georgia makes 91 bus stops at hotels and motels to pick up 600
students.68
Desmond believes that housing is not just a need but a right. He recommends
expanding the Housing Choice Voucher Program. This is a federal program for low-income
families (and the elderly and disabled) to afford decent and safe housing in the private
market, including single-family homes, townhouses, and apartments. Too many poor families
are forced to spend most of their income on housing. Desmond calls for a universal housing
voucher program for every family below a certain income level. Millions of poor families would
then be able to seek housing in the private market. More families in stable homes would mean
far less government money spent on the costs of homelessness.
Social Class, Inequality, & Poverty (Fall 2021)
Page 34
Desmond’s arguments
reflect many of the larger themes
we have addressed throughout
this chapter. We have shown how
our social class standing is not just
a matter of individual efforts and
initiatives; there are larger
structural and institutional forces
that influence our class positions
and are responsible for the
growing inequality in the U.S. and
around the world. If we address
some of these structural and
institutional forces, we have a
greater likelihood of reducing
social class inequality and poverty.
The popular conception of social class in America is that there is a tried-and-true
formula: hard work translates to success, which leads to upward mobility. If you work hard and
stay on track you can achieve the American Dream. But the reality of social class is much
more complicated. There are drastic levels of income and wealth inequality in America.
If we think of ourselves as contestants in a race, those who have more wealth have a
head start. We like to think that everyone is running in a fair race, but those with built-in
advantages (high income, better schools, good health care, easy access to nutritious food,
secure housing, reliable transportation) have a significantly better chance of succeeding in
the race than those like Alex Russo or Desmond Spencer or Arleen Beale’s son Jori. It isn’t that
those who are disadvantaged shouldn’t bother to compete or that they have no chance to
succeed. But we need to be honest about social class and recognize that it greatly enables
some and severely constrains others.
Possessions placed on the sidewalk after an eviction. (Source)
Social Class, Inequality, & Poverty (Fall 2021)
Page 35
REVIEW SHEET: POVERTY AND HOMELESSNESS
CLICK THE LINK FOR:
LEARNING OBJECTIVES KEY QUESTIONS
AUDIO KEY POINTS
PRACTICE QUIZ KEY PEOPLE
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Social Class, Inequality, & Poverty (Fall 2021)
Page 36
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Cover Photo Source: Todd Schoepflin