Tag Archives: inequality

When looking at the minimum wage, should we consider whether a poorly paying job is better than no job?

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I ran into an argument about whether the minimum wage should be raised in the United States and it got me thinking about the reasons behind the argument for raising it. To start, here is some of the debate:

One of the harshest realities of America’s slow economic recovery — and there are many — is the fact in spite of modest job growth, pay for workers is falling. Year over year, average inflation adjusted wages have dropped by 0.6 percent for all private sector employees. They’re down a full 1 percent for non-supervisors — your retail salespeople, your shop floor factory workers, your cashiers. In other words, even as the overall employment picture has improved in fits and starts, the working poor are getting poorer.

Some believe this is a sign of the recovery’s weakness, and today the National Employment Law Project used it as a rallying point to call for a higher minimum wage. According to their analysis, which is current through the beginning of 2011, while the bulk of job losses during the recession affected medium wage earners, such as paralegals and nurses, most of the hiring post-recession has been for low-paid service work. Middle class jobs, they argue, have been replaced with poverty wage jobs…

But here’s the alarming part. All of this might simply mean that the same forces that caused wages to stagnate before the recession will make them stagnate after the recession. It’s just another sign that income inequality is here to stay, unless something radical changes that will give working class families a larger slice of the pie. Will raising the minimum wage do that? It might help on the margins, certainly for the 3.8 million workers who earn it.  (I’m not one of those who believes that a higher minimum wage actually kills jobs. This great, short Slate piece from 2004 explains why.) But the vast majority of American workers won’t see much benefit from it. Rather, fixing the wage problem means we need to think about the fundamental problems skewing income growth towards the top, from spiraling CEO pay to an inadequate education system.

Falling wages are taking us back to where we were before the recession. For many workers, that’s not a good place. And there aren’t any easy ways out of it.

Of course, arguments for raising the minimum wage often focus on the idea that it is not enough money to live on. Hence, calls for a living wage that is more closely tied to a more steady standard of living.

But I wonder if there isn’t a bigger issue at work here: the idea that low-paying jobs may not be worth having. In other words, people might be better off without a minimum wage job. The low-paying job may be helpful in securing a new job (you don’t want an unemployment gap in your resume) or moving up but too many of these low-paying jobs pay so little that employees may not be able to do the things they need to do to move up (move to a new area where jobs are more plentiful, own a reliable car to expand job prospects, enroll in classes, etc.). Additionally, a number of these jobs don’t really offer chances for advancement; if they do, it is limited to a small group of workers. So these workers can get trapped in a cycle of low-paying positions that meet some basic needs to survive but never provide the hope to do something better. This is reflected in books like Nickel and Dimed: it is hard enough to do the daily grind, let alone find some light at the end of the tunnel in terms of a better-paying job.

In this sense, making a small adjustment to the minimum wage wouldn’t seem to do much. It might offer a little more money but this is likely eroded quickly by inflation (past and future). What we then need is more jobs that provide a higher standard of living and give more employees the opportunity to move on and up to something better.

(I realize there is a lot more going on here. But I wanted to get at the idea that simply having a job isn’t a guarantee of having the chance to reach the American Dream. Being willing to work doesn’t necessarily guarantee a good outcome. This also reminds me of Katherine Newman’s book No Shame In My Game about the working poor who want to work but can’t access the jobs that would lead to success.)

Chicago second in the country in economic segregation

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I recently noted a Brookings Institution report about how zoning contributes to differences in academic achievement. Looking further at this data, Chicago shows that Chicago doesn’t do well among metro areas:

* In Chicago, the “housing cost gap” is large: costs (a combination of renting and buying) are over twice as high in neighborhoods near high-scoring elementary schools than in low ones. In context, the metro area has the 32nd biggest gap out of the 100 largest metros.

* The area does worse on the “test score gap”: 24th in the country, with a 26-point gap between middle/high-income schools and low-income schools.

* The authors pinpointed zoning as a driver of these inequalities, because of the relationship between restrictive zoning, low density, and high prices, but on that the area does best, the 70th most restrictive out of 100.

* On economic segregation? As a measure of how many low-income students would have to move to achieve equal distribution (a measurement similar to how racial diversity is measured), Chicago is second-worst in the country, behind Bridgeport, Connecticut, 61 to 58 percent.

Whet Moser argues that this economic segregation doesn’t bode well in a city that is also known for racial segregation. Of course, racial and economic inequality is linked so perhaps this shouldn’t be too surprising.

To solve this issue, you would need to find some way for students of different backgrounds to mix in schools. Of course, this has a long history in the United States. The Coleman Report suggested this back in the 1960s. In response, the government promoted busing but this proved unpopular. Today, Chicago claims to deal with this by allowing kids to attend other schools throughout the city but of course there are not enough spots in these high-performing schools and the poor performing schools still need help.

Sociology article helps lead to getting diversity information on NYC financial firms?

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Earlier this week, two major financial firms said they would release data on the gender and race of their employees:

There is no requirement that Corporate America disclose its diversity data, but Monday two major companies – Goldman Sachs and MetLife — announced they’d be giving up the long-held secret…

The information is available and has been since 1964, because under the Civil Rights Act of that year, companies with 100 workers or more have had to report the data on race and gender annually to the U.S. Department of Labor. The problem has been, they were not under any requirement to release that data to the public, or even to local governments such as New York…

And there’s a lot of inequality, especially in the higher ranks at companies where the lack of diversity is greatest.

When I saw this, I was disappointed we didn’t get any information willing these companies were to start releasing this data or whether they were feeling enough public or government pressure. And then the article had a quote from the author of a recent sociology article on the topic that was published in a top journal and I wondered if this article made any difference…

Liu’s push for disclosure is a good first step on the road to more diversity, said Emilio J. Castilla, professor at MIT Sloan School of Management and author of  an article titled “Bringing Managers Back In: Managerial Influences on Workplace Inequality,” published in the American Sociological Review late last year.

“But this might not be enough,” he stressed. “They’re increasing transparency, showing some percentages, but I’d think about accountability. Are there organizational procedures in place to make sure these efforts result in the outcomes they want?”

I’m probably too hopeful here that an article in a sociology journal was influential but it couldn’t hurt…right?

Argument: growing income inequality reflected in “unseemly” larger houses

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In his new book, Charles Murray (not a sociologist) apparently makes the case that the “unseemly” big houses in the American suburbs today reflect growing levels of income inequality:

He begins by noting that the distribution of income was far more compressed in 1963 than it is today. Back then, the median family income of professionals and managerial occupations was only about $62,000 p.a. in today’s dollars. Less than 1% of American families in 1963 had incomes higher than $200,000 p.a. and only 8% had household incomes higher than $100,000 p.a. (again, all figures in today’s dollars).

The housing of the time reflected the same degree of compression. Even the elite didn’t usually live in what we think of today as a mansion. He recommends viewing an episode of Mad Men to see the sort of house – remarkably modest by today’s standards – that the Drapers live in. That, he says, is “the kind of house that the creative director of a major New York advertising agency might well have lived in”.

In 1963, great mansions were something most Americans saw in the movies, not in person. Only the richest suburbs of New York, Chicago, and Los Angeles had entire neighborhoods consisting of mansions.

The nature of the change since then can be seen by driving around suburban neighborhoods where the affluent of the 1960s lived, such as Chevy Chase, Maryland; Belmont, Massachusetts; or Shaker Heights, Ohio.

Most of the housing stock remaining from that era looks nothing like the 15,000- and 20,000-square-foot homes built in affluent suburbs over the last few decades. No reproductions of French châteaux. No tennis courts. No three-story cathedral ceilings.

Interesting argument. I wonder if some other factors might also be at play here.

(1) Perhaps people today are more willing to spend their wealth on impressive houses. This could be the case if homes have become more important markers of status since the 1960s.

(2) Perhaps home builders weren’t building these types of homes on a large enough scale for more wealthy Americans to access them. The early 1960s is not that far removed from the under 1,000 square feet Levittown houses and the big builders (as opposed to more local or regional builders) were just taking off. In other words, there was no Toll Brothers yet. Additionally, you need lenders who would be willing to service more mortgages for bigger houses.

(3) Overall, all American homes increased in size over this time period. The average square footage of a new home was 1,660 square feet in 1973 and peaked at 2,521 square feet in 2007. It could be true that the top 10 or 20% of houses have really increased in size but on the whole, all new homes have gotten bigger.

(4) Another factor that might be overlooked here is that the wealthy in the 1960s tended to live with other wealthy people in suburbs or subdivisions and this is likely still the case today. Sure, Don Draper might have had a smaller home but Draper still lived with white-collar professionals. Even if their house sizes have really ballooned, one issue is that the wealthy still live apart from other Americans. Perhaps we should be more concerned with residential segregation than just the size of homes.

Is there such a thing as “wealth addiction”?

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Citing the writings of a PhD in sociology, a commentator suggests that we should pay attention to wealth addiction:

The Occupy Wall Street and the 99 Percent Movement named the core issue of our time: the overwhelming power of Wall Street and large corporations. Now it’s time we named the problem underlying this issue. It’s called addiction. I’ve been treating addicts for more than 40 years and when I hear the descriptions of those for whom millions and billions of dollars in wealth drives them to want more and more, I know we’re dealing with addiction.

Philip Slater has an A.B. and Ph.D. from Harvard and taught sociology at Harvard, Brandeis and UCSC. He is the author of numerous books including Wealth Addiction. He says:

“Those who devote their entire lives to amassing or retaining huge sums of money are neurotically addicted, trying to fill an inner void with money. And since such psychic voids cannot be filled with money — any more than with alcohol, tobacco, cocaine, food, or sex — even a billion dollars doesn’t satisfy them.”We say people who can’t stop drinking when they’ve had enough are alcoholics. We say people who can’t stop eating when they’ve had enough are food addicts. We say that people who can’t stop gambling when they know they should quit are gambling addicts. “But people with a billion dollars who can’t stop trying to make more,” Slater says, “we call successful.”

I imagine this could be a good conversation starter. But this would have to be part of a larger conversation taking place right now about some other kinds of addiction including sex addiction and Internet addiction. Some might ask whether saying billionaires are suffering addiction lets them “off the hook” for amassing so much wealth.

Differences in who blogs by race and education

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A new sociological study shows that who blogs is affected by both race and education:

While African Americans as a whole are less likely to afford laptops and personal computers, Internet-savvy blacks, on average, blog one and a half times to nearly twice as much as whites, while Hispanics blog at the same rate as whites, according to a study published in the March online issue of the journal, Information, Communication & Society.

“Blacks consume less online content, but once online, are more likely to produce it,” said the study’s author, Jen Schradie, a doctoral candidate in sociology at UC Berkeley and a researcher at the campus’s Berkeley Center for New Media.

Schradie analyzed data from more than 40,000 Americans surveyed between 2002 and 2008 for the Pew Internet and American Life Project, which tracks Internet use and social media trends. Her latest findings follow up on a 2011 study in which Schradie found a “digital divide” among online content producers based on education and socio-economic status…

But, she said, “While blacks are more likely to blog than whites, it doesn’t mean the digital divide is over. People with more income and education are still more likely to blog than those with just a high school education and Internet access.”

There is not a whole lot of public discussion about this “digital divide” but it is interesting to see how this plays out with blogs. Of course, blogs are just one part of the content of the Internet and are a form that generally lends itself to longer pieces of writing (say compared to Twitter, Facebook, comment sections, discussion boards). In general, how involved are minorities in other forms of web content?

I wonder if the link between blogging and education is tied to the idea that more educated Internet users feel like they have something to say and contribute. Or perhaps education leads people to think that they should have a voice. For example, if you think about Annette Lareau’s theories about two types of parenting, “concerted cultivation” leads to adults who are assertive and comfortable in conversing with others.

Sociologist: lower rates of poverty the result of “robust social policy”

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A profile of sociologist David Brady summarizes his arguments about how a larger welfare state limits poverty:

Brady’s 2009 book Rich Democracies, Poor People: How Politics Explain Poverty, offers an analysis of social inequality that is counter to the prevailing notion that it is an inescapable outcome of individual failings – known as the “culture of poverty” – or the result of rising unemployment. It shows that among affluent western societies there are immense variations in poverty: from almost 20% of the population in the US at one end of a scale, followed by Canada, Australia, Spain and Italy, to less than 10% at the other end – where the Scandinavian countries sit – with the UK and Germany somewhere in between.

The reason for such stark differences lies not with the numbers of single mums or jobless people but with whether a country has made larger investments in the welfare state, argues Brady. For those countries that have spent proportionately more on pensions, healthcare, family assistance and unemployment compensation – what we in Britain call the welfare state and Brady refers to as “social policy” – poverty levels will be lower…

British attitude surveys have shown a marked decline in support for redistribution since the mid-1980s, and opinion polls suggest a majority of the British public believes that the government pays out too much in benefits and that welfare levels overall should be reduced…

He challenges poverty campaigns in the UK to address head-on politicians’ concerns around benefit dependency and the so-called something for nothing culture. “Spending on social policy is something for something,” he asserts. “[It is] a social investment in the next generation – on good schools and childcare – that manages against risk by preventing people from falling into poverty. And, above all, it is a citizen’s right.”

While this profile talks about how Brady’s work fits with current British politics and government cost-cutting, I imagine he would have some commentary about the current situation in the United States.

I would be interested to hear Brady discuss whether there are trade-offs for this kind of welfare state spending or whether it really is more good than not. For example, if you spend all of that money fighting poverty, does it limit a country’s abilities to spend in other important areas?

This gets more complicated when Brady introduces the ideas of rights. In America, we often have costs-benefits arguments about government spending – can we afford it or is it worth the money spent? If we spend money in one direction, say, promoting job creation, will we get money on the other end, say less paid out in unemployment? The idea of rights shifts the discussion away from just the finances and suggests it is more about values than money.

Maybe I should just track down the book…

Have enough money, pay others to wait in line for you

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The Jakarta Post reports on a phenomenon found in a number of places: people being paid an hourly wage to wait in line.

Student Ansari Haja has endured bad weather, hunger and the call of nature to stand in line for hours and secure an apartment at Bedok Residences.

The catch – the apartment was not for himself. The 19-year-old was paid $300 last November by a real-estate agent to spend 28 hours in a queue. He did it again a month later, for another showflat launch in Serangoon North – this time queuing for 14 hours…

It appears that apartments, clothing and gadgets top the list of things people will pay others to queue for.

Associate Professor Xiao Hong, from the Nanyang Technological University’s Division of Sociology, said that this practice reflects the affluence of a society that allows one person to buy another’s time.

‘Everyone’s time has a value on it. But because of social-economic factors, others have more value placed on their time. To compensate for a lack of it, they use economic resources to ‘extend’ the hours that they currently have in a day,’ she added.

And Singapore is not alone when it comes to the phenomenon of ‘queue-sitting’.

In Japan, businessmen have paid people to stand in line for the launch of the PlayStation 3, while in Britain, students at Edinburgh University were paid to help secure the best flats on the market.

I’m surprised I haven’t heard of this in the United States. This past Thanksgiving, I stood in line for 45 minutes before midnight at Best Buy and you could see that people were jumpy about things like people joining their friends in line right before the doors opened or not getting in the store even a few minutes after midnight. Would Americans accept the idea of someone in front of them being paid to wait in line and then changing places with the payee at the end?

The concept of paying for extra time is interesting. How is this any different than paying a personal assistant or a personal shopper to take care of certain tasks during the day? If you have the money, you can afford this. Does this suggest that inequalities of wealth can be translated into inequalities of time? People with more money or resources can literally do more each day.

Parents who share about their kid’s success may be engaging in a helpful networking strategy

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Sociologist Annette Lareau argues that parents who make their kid’s accomplishments known may be engaging in important networking activity:

Parents today are more anxious about the economy and their children’s futures than their predecessors, says University of Pennsylvania sociology professor Annette Lareau, and that can complicate the bragging versus sharing issue.

But she also points out that talking about your child’s extracurriculars is an effective networking strategy.

“It takes a lot of informal knowledge to have your kids in organized activities,” she says. You need to know about sign-up dates, carpool opportunities and how competitive, challenging or welcoming an activity will be.

“Mothers are very dependent on other mothers to share information,” Lareau says.

In this view, mothers and parents are sharing information about their own kids in order to build relationships with other parents as well as learn more information about social and community opportunities. Perhaps the bragging doesn’t haven’t to be overt but it is signalling to other parents about the abilities of their children and could lead to specialized information that could help their children even more. If you think your kid has special talents, then you would want to talk to other parents who have traveled similar paths and already some of the legwork.

More broadly, I wonder how much social networks are implicated in the Matthew Effect (“the rich get richer, the poor get poorer”), whether we are talking about children or people of different backgrounds and opportunities. It certainly plays a role but how much (i.e., could we put a percentage on it)?

Affirmative action and equality of opportunity vs. equality of outcome

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Since the Supreme Court recently decided to take on a case that involves using race in college admissions, I was intrigued to run across a new sociological study that suggests people with more education are not more likely to support affirmative action.

“I think this study is important because there’s a common view that education is uniformly liberalizing, and this study shows—in a number of cases—that it’s not,” said study author Geoffrey T. Wodtke, a doctoral student in the Department of Sociology at the University of Michigan…

Wodtke’s study finds that while being better educated does not increase the likelihood that whites and minorities approve of affirmative action in the workplace, it does increase the probability that they support race-targeted job training. “The distinction between those two policies is that one is opportunity enhancing and the other is outcome equalizing,” Wodtke said. “I think that some of the values that are promoted through education, such as individualism and meritocracy, are just much more consistent with opportunity enhancing policies like job training than they are with redistributive or outcome equalizing policies like affirmative action.”…

According to Wodtke, there could be a couple of reasons why more educated blacks and Hispanics are no more likely to support affirmative action in the workplace than are their less educated peers. “One possibility is that affirmative action programs may have the unintended effect of stigmatizing people who have benefited from them,” Wodtke said. “As a result of this stigmatization, people who have seemingly benefitted from affirmative action may just lose faith in the efficacy of these programs to overcome racial discrimination in the labor market.”

Another possibility is that people with more advanced educations, regardless of race, become socialized in such a way that their own support for more radical social policies is somewhat diluted, Wodtke said. “The data suggest that one ideological function of the formal educational system is to marginalize ideas and values that are particularly challenging to existing power structures, perhaps even among those that occupy disadvantaged social positions,” Wodtke said.

I assume Wodtke addresses this in his article: who then does support affirmative action and do supporters primarily see it as a way to improve their standing in society?

I like the way this is framed in terms of equality and this is a way that I talk about inequality in my introduction to sociology class: as a country (or within other institutions) we could aim for different kinds of equality. Equality of opportunity is a more common American response and suggests that it is the role of government and other institutions to try to offer a level playing field, particularly in education, but then individuals have choices about how they respond to that. If people don’t succeed or don’t take opportunities provided for them, it is their fault. Of course, this view is limited in that it is extremely individualistic and fails to account for structural issues (race, class, gender to start) that affect the ability of individuals to respond to these choices.

On the other hand, we could set up a system that is aiming more for equality of outcome where different individuals end up at similar places. In this view, people or groups may need extra resources or help to get to these more equal outcomes. To steal an idea from my wife, this could be the difference between being equal and fair: acting equally in the classroom could mean devoting the same amount of time to each student while being fair would mean devoting more time to the students who need a little more help. (Another way to put it: if you were the student who needed the extra help, would you rather it be an equal or fair classroom?) This reminds me of a discussion from last year about the education system in Finland where the goal was not to have the highest achieving students but rather to bring up the bottom group of students and have more proficient students overall. This may also take the form of a more comprehensive safety net or baseline standard of living where citizens are guaranteed a certain level of income, health care, and housing.

Having this larger discussion about equality of opportunity versus equality of outcomes, how far we would want to lean toward one or the other as a country, and what policy routes would help us achieve our stated goal might be more productive in the long run instead of having skirmishes in court about particular policies every few years.