Monday, March 1, 1999
Announcements:

• Class is canceled on Friday, March 5, on the condition that students watch the movie Amistad and write a paper analyzing the movie using the theories which will be discussed in Wednesday’s lecture. The paper will be due Monday, March 15 – the Monday after spring break.
• Students may contest their blue-book grade within 48 hours of Monday’s class.
• Reaction papers to the movie seen last Thursday (worth 3 bonus points) are due Wednesday.

1. Theoretical Explanations of Poverty and Inequality

1. Personal Inferiority Theory – similar to Spencer’s Survival of the Fittest ideas – says the poor are unfit members of society that have personal deficiencies (either intellectual, emotional, social, etc.) These innate deficiencies make them unable to compete in society. This is a biological explanation of poverty, which ignores how society creates poverty. Also known as the "Blaming the Victim" theory.
2. Cultural Inferiority Theory – deals with the unique value structure that poor people have in response to their economic situation. These people are hopeless, have lower expectations, have no work ethic, and consider poverty as their fate.

1. Oscar Lewis – unique value structure - "Culture of Poverty" – the people are stuck in a cycle of poverty that is passed down from generation to generation. The children perpetuate the cycle of poverty. The poor lack cultural capital (values, beliefs, competence) of the middle class.
2. Edward Banfield – unique value structure – Poor people do not know how to deter gratification – they are unable to control basic desires. They spend their money very quickly on instant gratification. Society is divided into 2 groups – Present oriented (poor) and Future oriented (students).

1. Marxist Theory – inequality is due to unequal distribution of societal resources. Capitalists step on poor to get rich. The rich have the concentration of power and they are self interested and indifferent to other classes. They perpetuate the class system because social inequality benefits those in power. Capitalists exploit the workers. Poverty is a consequence of exploitation and weakness in the economic system itself.
2. Davis-Moore Perspective (functionalist) – Poverty is a natural feature of society. To motivate the bright, most competent people with the most vital roles in society they are rewarded with a high income, power, and prestige. The poor are not educated and have minimal societal competence so there is no reason to reward them. Poverty is a latent function of societal arrangements.

1. Contributing Factors to Growing Inequality in the USA

1. Corporate Power – corporations are powerful and rich and control the major markets in any society. ONE PERCENT of the population is corporate elite. Big companies are indifferent to other classes and create inequality (Marxist theory)
2. Political Economy – symbiotic relationship between corporations and government. Government makes policies favorable to upper class through tax laws and tax breaks – The government creates inequality.
3. Structural Changes and Rising Unemployment – In the American Economy the blue-collar occupations (manufacturing jobs) have been moved overseas to cheaper labor or have been eliminated through automation. Industrial Reserve Army – blue-collar workers are hired when economy needs it and fired when the economy is good. The gap between skilled and unskilled workers has widened – people need a college education. Middle class incomes have gone down.
4. Education – Not everyone can afford college. Example: Nobody in the class is from a family that makes under $25,000 a year. Education is a great divider of classes: 74% of kids from affluent families go to college. A person is 12 times more likely to avoid poverty if he has a college degree as opposed to a high school diploma. Educational Tracking System – creates different employment possibilities.
5. Income Differentials – the richest 20% of people take in more than 49% of the nation’s income – the poorest 20% of people take in 3.7% of the nation’s income. Of all industrial nations, America has the greatest inequality. 80% of all wealth is held by the richest 20% of people – poorest 20% of people hold 0%. This is due to loss of manufacturing jobs to other countries. The richest 10% of households hold 66.8% of wealth. The rich get richer and the poor have more children.