Psychology assignment.

! Question 1 from Lectures and Schiller


 PERSPECTIVES OF POVERTY

1

Question 1 There are two opposing perspectives relative to the causes of poverty. (1) The Individualistic Perspective and (2) the Structural Perspective. From the two (2) categories listed below select two (2) theories from each category: Category 1 and Category 2. Discuss in detail how each theory explains why people or countries are poor. Include in your discussion the strengths and weaknesses of each theory, you should discuss a total of four (4) theories.

CATEGORY 1: Individualistic Perspective a. Flawed Character Theory b. Human Capital Theory c. Biological Theory d. Cultural Theory ! ! ! ! ! ! CATEGORY 2: Structural Perspective

2

Individualistic Perspective ■ Personal responsibility of the individual ■ The poor are poor because of their individual traits and actions/inactions. ■ Four Theories

1. Flawed Character Theory 2. Human Capital Theory 3. Biological Theory 4. Cultural Theory

3

Flawed Character Theory ■ Micro-level theory ■ Poor people lack of motivation, aspirations, and work ethic ■ Meritocracy: if you work hard you will get rewarded based on your individual

ability or achievement ■ Major component of liberal individualism

– Based on self interest and profit maximization – Measures a person by their wealth

■ Assumptions of Flawed Character Theory – There are abundant opportunities – Individuals are in full control of their socio-economic status

4

Human Capital Theory ■ People are poor because of lack of education, skills, and work experience ■ Those the get ahead made the necessary investments

– The poor did not invest enough time, energy, or money into the development of their own human capital

■ Assumptions – Human capital is rewarded in the marketplace – Everyone starts out with a certain set of abilities – Rational Choice: people know their options and can choose from them.

They are poor because they make the wrong choices. o There are universal opportunities for everyone

■ Flaws – Does not adequately deal with structural constraints – Misleading views of the labor market-the process which individuals convert

their human capital into employment and earnings.

5

Biological Theory ■ Poor people have innate inferiority and are naturally unintelligence- they are born that

way – Genetically handicapped – Innate is a term typically used for animals

■ Darwinism: “survival of the fittest,” only the strongest will survive due to natural selection and the inferior are eliminated

■ Social Darwinism and Herbert Spencer – The poor are at the bottom and the elite are at the top of social hierarchy

because of natural development – Free and natural competition: the most able will be able to rise to the top and

the least able will sink to the bottom ■ Welfare programs to help the poor will not be able to help the poor

6

Cultural Theory ■ Anthropologist Oscar Lewis first articulated term ■ People are poor because of “the culture of poverty:” a set of norms and values

that are characteristic of the poor ■ Internalizing poor values becomes inherent and passed on one generation to

another through socialization ■ Poor people are not psychologically geared to adapt to change or the

mainstream. They have a lack of control, are impulsive, have female-headed families, less interested in education, etc.

■ Flaws – How they explain culture is not how sociologists would define culture – Does not focus on economic conditions, oppression or lack of opportunities – The only thing which poor people have in common is that they are poor, all

other aspects of culture can not be generalized across ethnicities, races, religions, etc.

7

Structural Perspective ■ Forces outside the individual-poor are poor because of structures ■ Six Theories

1. Political Economy Theory 2. Restricted Opportunity Theory 3. Big Brother Theory 4. Critical Race Theory 5. Modernization Theory 6. Dependency Theory

8

Table 1 The Quintile Distribution of Household Income

Table 1 reveals that a household needed to earn only $100,241 in yearly income in 2012 to make it into the highest quintile. Other highlights of household income delve further in quintiles, identifying the top 10 percent, top 5%, or the top one (1) percent. As shown in Table 1, without question, the U.S. distribution of income is highly unequal. The top 20 percent household income is more than 14 times larger than the lowest (bottom 20%) quintile. Source: US Census Bureau, Income, Poverty and Health Insurance in the United States: 2008 (Table 1)

Quintile Income Range Income Shares Top 5% $191,157 or more 22.1% Highest $ 104,097 or more 49.9% Fourth $ 64,583 – 104,096 22.9% Third $ 39,765 – 64,582 14.8%

Second $ 20,600 – 39,764 9.0% Lowest $ below – 20,599 3.4%

9

Table 2: Global Comparison of the Percentage of Income Share Country Bottom 10% Top 10%

Industrialized Nations Australia 2.0 25.4 Canada 2.8 23.8

Germany 3.3 23.7 Japan 4.8 21.7

Sweden 3.7 20.1 United Kingdom 2.6 27.3

United States 1.8 30.5 Developing Nations

Brazil 1.0 47.6 China 2.4 30.4

Ethiopia 3.0 33.7 India 3.5 33.5

Philippines 2.3 36.6 Zimbabwe 1.8 46.9

10

Figure 1: Pie Chart of Global Income Shares among Industrialized Nations

Table 2 shows provides comparisons of the percentage of income shares among industrialized nations, the United States appears to be the least equal in how the pie is sliced (Figure 1). Inequality is generally more severe in poor nations (smaller middle class and a huge working and peasant classes). China has an income share very close that of the United States (Figure 2)

Figure 2: Pie Chart of Global Income Shares among Developing Nations

11

The median of white families ($55,530) substantially exceeds that of minority families (Blacks $34,218, and Hispanics $37,913). Married couples have the highest median incomes ($73,010), followed by father-only families ($49,186), and mother-only families ($33,073). Mother-only families make less than half of the income of married couples. In 2007, women earned 77.5 cents for each dollar earned by men, statistically unchanged from 2005. Real median earning of both men and women who worked full- time, year-round declined between 2005 and 2006. The median earnings for men fell 1.1 percent to $42,300; for women, the corresponding numbers were 1.2 percent and $32,500. ! Source: United States Census Bureau. Retrieved September 7, 2010 http://www.census.gov/ PressRelease/www/releases/income_wealth/010583

Table 3: Median Incomes by Race and Family Structures

12

Political Economy Theory ■ Economic, political and social systems obstacles caused by social forces and

arrangement set up by society ■ Nature of American capitalism perpetuates poverty

– What and how much one gets is determined by private profit rather than collective need

– Business owners makes investments decisions in order to reduce costs by using new technologies, such as robots, to replace workers

■ Michael Herrington- wrote the book The Other American – “The real explanation of why the poor and where they are is that they made

the mistake of being born to the wrong parents, in the wrong section of the country, in the wrong industry, or in the wrong racial or ethnic group” (Harrison, 1963:21).

– Structural conditions are to blame

13

Restricted Opportunity Theory ■ When the Great Depression occurred, people started to see a flaw in the individual

perspective ■ The New Deal came out of the Great Depression ■ No amount of work ethic can get you out of poverty ■ To end poverty, improve opportunities for people ■ According to the Restricted Opportunity Theory:

1. Poverty may result from forces beyond the control of the individual 2. Poor are poor because they do not have adequate access to good schools, jobs,

and income 3. Poor are discriminated on the basis of color, sex income, or class 4. Poor are not furnished with a fair share of government protection, subsidy, or

services

14

Big Brother Theory ■ Social welfare policies of the federal government produced poverty by making people

dependent on aid ■ “Blight of dependency”- the poor are lazy and less motivated to work because they

depend on the welfare system ■ Destroyed work incentives and rewards poor for not working ■ Government is trying too hard to take care of people and they should do less and force

the poor to stand on their own ■ Government spending and taxes should be reduced and there should be a cut back on

affirmative action

15

Critical Race Theory ■ Race lies at the very nexus of American life ■ There are not a set of methodologies that defines CRT but have several broad ideas:

1. Race is a social construction 2. Racism is a normal fact of daily life in America

– White privilege is so ingrained in the nation’s political and legal structures that it is almost unrecognizable

3. Racial separation has complex historical and socially constructed purposes that ensure the location of political, economic, and legal power in groups considered superior to people of color

4. Racism has been virtually permanent and periods of “progress” have been followed by white privilege backlash

■ Social polices are analyzed as part of the discursive practiced that reproduce white privilege

16

Modernization Theory ■ Changing from traditional society to modern society (urbanization and industrialization) ■ Nations need modern technology

– To improve society there needs to be technology, industries, factories, assembly lines, etc. – Need computing power, and endless electrical grid necessary to organize production

■ Developing nations need modern ideas – Traditional values such as fatalism, patience humility, communal cooperation need to be

replaced with modern values such as ambition, entrepreneurship, advancement, achievement and competition

■ Developing nations need modern institutions – Electoral democracy should replace theocracy and monarchy – Modern banks, financial institutions, schools, insurance companies and free market

institutions ■ Modern technology brought multinational corporations and international organizations such as the

International Monetary Fund (IMF) and World Bank

17

Dependency Theory ■ The Western World (first world) brought many things to poor nations (third world) and most of it was

negative and destructive. The poor was not always poor, they were made poor ■ Countries were robbed of their resources and then exploited for their cheap labor

– Trade was rigged against the poor countries – Capitalist nations took raw materials and the countries cannot afford to buy them back

■ Domination of countries and companies over poor nations and peoples – Military threat and interventions from western countries if countries did not comply

■ Distortion of the poor countries by multinational countries – Countries get help or borrow money to build roads and rails but these roads/rails lead to port

cities to facilitate exports – Goods are produced to serve foreign markets not local needs – Countries never have more than 2 or 3 cash products

■ Immanuel Wallerstein’s World Systems Theory (1974): Wealthy core countries are supported by the poor periphery

18