Sociology 1- Introduction to Sociology notes
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Sociology notes Introduction: What is sociology? How societies are organized how societies affect people living in them Links social sciences Economic sociology (network and markets) o Social networks that characterize markets Educational sociology It not speculating, scientific exercise that involves o Data Quantitative (population, census) Qualitative (participant observation) Use Data to test theories Challenges: o Always raise questions about the data o Validity Are you measuring what you think you're measuring Interview Bias interviewee could be not telling whole truth and be affected by external factors Asking the right questions o Reliability: Are you measuring it consistently get the same answer with same procedure e.g Different interviewers may distort responses (priest ask questions vs normal man) o Generalizability: How broadly relevant are your findings Sampling are undergrads like everyone else Don’t generalize findings from a small group to the whole population Big quantitative study vs small detailed study (general vs detail) Theory testing o “If…then” statement If governments intervene, then markets don’t do so well o Hypothesis: a testable derivative of the theory o If data doesn’t support the theory, test data first and don’t chuck the theory Marx in Adams Notes: Karl Marx and Friedrich Engels concluded that industrial capitalism was the source of the modern world’s problems When studying law at Bonn, transferred to Uni of Berlin and influenced by philosopher G. W. F. Hegel Marx identified himself with the leftist Young Hegelians, becoming an atheist, a democrat and a critic of prussian state After leaving germany they went to Paris, he met Friedrich Engels, son of an industrialist Engels was spokesman for the Young Hegelians Engels met Mary Bruns, a factory worker who was involved in the English workers’ movement Marx learned economics and criticised Hegel, Young Hegelians and liberal aspects of French Socialism He and Engels wrote The Communist Manifesto of 1848 Wrote The Grundrisse and Das Capital Financially and physically screwed Engels bailed them out After Marx died in 1883, Engels issued new editions of old works, such as the Manifesto and publishing unpublished works of Marx, such as The Critique of the Gotha Programme and the Theses on Feuerbach. Engels wrote “The Origin of the Family, “Private Property” and “The State” Engels finished “Das Kapital” after Marx died France just gone through bourgeois revolution and was struggling Britain was trying to avoid revolution Engels criticised Britain working class Germany was changing from collection of province to nation state 1848 Europe huge economic depression Italian civil war France unsuccessful coup German revolution was avoided by giving in to liberal pressure for a Reich, or nation In summary: o Major technological changes bound the world closer, while increasing wealth gap of owners and workers o Political struggles for land or power, involving Britain, France, Germany, Russia, Austria etc o Socialists and communists organized, but revolted unsuccessfully against bourgeois governments o Economic crisis occurred periodically, demonstrating fragility of capitalism Lot of interpretations of what MArx said, but still a lot of questions as to what he wanted to say Questions as to whether his intentions changed over his lifetime Change from humanism to economics When the “Grundrisse’ and the “Critique” are compared to his earlier and later writings, the gradual evolution of his concern with alienation in his writings on capitalist economics become evident Marx and Engels analyzed the contradictions and struggles of sub groups, while also predicting change in the form of revolutions They disagreed with Hegel’s metaphysical and dialectical ideas of reality and truth as being in the spirit world, finding and seeking, but not arriving Marx and Engels thought material world was reality Main concern was oppression of working class through capitalism and alienation of people from meaning of labor Marx believed that physical survival and material production are basic to people’s lives and to what they believe in good Hegel included 3 ideas o people view the world through fixed commonsense categories o gives incorrect understanding of the world o truth must be pursued through process and contradiction and must be found through mental struggle Ludwig feuerbach came up with Materialism He explained that thought was derived from the material world in which we live Young Hegelians, Max Stirner and Bruno Bauer said that religion is a fraud and must get rid of it Marx rejected nonbelief and metaphysical view of reality while accepting the materialist view and Hegel’s dynamic and dialectical process Marx made historical materialism process of change in the real world of material, physical existence Hegel and MArx believed that labor is essential to humanity Marx believed Alienation results from breaking apart the ownerworkerproduct consumer syndrome In capitalist industrial society, alienation is common condition Alienation of the worker means that it exists outside of him, as something alien and becomes a power confronting him Humans under capitalism suffere 4 forms of alienation o Their work o Their production o Humanity since meaningful labor is what makes us human, we have been alienated from the essence of our humanness o human beings externality of labor also results in competition against other people capitalists regard the goods and services produced by workers merely as things to sell and sources of profit commodity becomes a fetish to the consumer, gives meaning to consumers life Marx solution is abolition of private property and division of labor. Communism is the solution In communist world, one's labor is the value by which one survives In today’s world, labor still produces value but it is a commodity that belongs to someone other than the laborer capitalist world is where the individual workers produce surplus value more exchange or commodity value than they are compensated for surplus value originates from slavery and feudal system rich gets richer poor get poorer Marx noted that surplus value could be increased for the benefit of capitalism in 2 ways o extending the work day or developing the productivity Engels suggests a 3rd way: some small business owners or owner workers are driven out by competition and end up in working class or proletariat increases ratio to workers to capitalists, producing more surplus value for each capitalist Marx and Engels saw danger of laying off workers and creating huge unemployment force that can attack status quo relations of production relations that involve the totality of economic life. Encompass both the means and mode of production commodity has use value utility which includes both what owners can accomplish that they could not without the commodity fetishes commodities that become ends in themselves, without giving true meaning to life Marx saw: o humans as capable of good, even of perfection o society as imperfect, bad o human perfection to be sought in the betterment of society degradation of society was result of alienated labor and private property human condition became one in which people want to own everything communism makes it so people no longer satisfy their own need by depriving others Marx and Engels are practical and ideological radicals, stating that capitalist society should be overthrown Engels said that all political struggles are class struggles for economic emancipation Marx believed that there are 2 classes in the long run, the bourgeoisie and the proletariat Four stages of polarization of classes o common conditions ruling class are classforthemselves, meaning they are aware of common interests workers are classinthemselves, though living in common conditions, do not recognize their common interests o consciousness or awareness working class develops class consciousness, thus becoming a classfor themselves competition among working class and bourgeoisie make proletariat feel appreciated through good deeds countered by herding of working class and discussion of oppression some bourgeoisie who understand history will break away and join proletariat o organizing o revolution Outcome of revolution will be communist society transitionary phase will be dictatorship of the proletariat This dictatorship constitutes the transition to abolition of all classes marxists argue that until world revolution is complete, there will be a dictator since capitalist nations is always a threat marx and Engels incompletely theorized about gender is because both saw relations between men and women as located primarily in the family Engel argued that women pushed for monogamy Monogamy made patriliny, tracking through male line patrilineal descent became important only when economic surpluses developed Division of labor and development of agriculture and technology allowed man to acquire a more important status than women Man represents the bourgeoisie and the wife the proletariat remedy is the same revolution as the one that abolish class oppression women must first enter productive work and abolition of monogamous patriarchal family Engels also saw the abolition of unequal property relations as the means of producing “true sex love” Marx and Engels did not clearly identify women as members of the oppressed proletariat Freedom and equality were central themes of their work, although not specifying racial groups and favorability Believed that thought must not be separated from action or praxis Wanted to abolish private property and take away bourgoeisie control of means of production Believed that family had to be abolished in which women were treated as “domestic slaves” Country or nationality had to be abolished Religion had to be abolished Darwin had an influence says Darwin’s books contains the biological basis of our conceptions Engel suggests the economics should be able to use the principles of cooperation found in plants and lower animals Engel believed that selection and adaption mya man regression just as well as progress Marx saw division of labor as society’s problem, while Durkheim saw it as a solution Marx believed that raising wages causes workers to work harder and shorten their lives. This is consistent with Durkheim’s point lot of people try to discredit marx Marxists later misunderstood and believed that we have been brainwashed into believing capitalism is good for all of us Feminists don’t believe you can solve gender inequality through economicscentered view Their views made people question society influence the world Sep 18 notes: How advanced societies developed Talk about o theory of history o problem of order o effect on individuals Marxism Conflict theory o Laid the foundation of conflict theory Durkheim o Evolution theory Max Vabor o more Nuanced Marx o Influences: o Student of philosophy o German Hegelian philosophy: dialectics o (Influence 1) Hagel basic arguments was that society changes over time as result of contradictory ideas clashing with one another, that lead to a resolution of the conflict o e.g French revolution people believed king and queen was chosen by god. After enlightenment and science, it conflicted with divine right of royal family o thesis> antithesis> contradiction > synthesis o French historians:class o (Influence 2) TAlk with french historians and in history, it’s the social classes that make things move o Frederick Engels: economics o (Influence 3) Went to England and meet Engels. Engels own textile mills in Manchester. Told Marx to take economics. Whole world runs around economy and need to make a living. o Engel supports Marx family o Marx creates theory of modernization and involves contradictions, class conflict and revolutionary conjunctures o MArx’s Conflict Theory of HIstory Basic economic frame Forces of Production commodities to create produce capital wheat, barley, Relations of Production Social relations that are dominant in that economic system Who owns the forces of production Who uses them social relationships between different social classes When conflict emerges then transition to next apoc Capitalist Mode of Production You have a mode of production and forces of production and relations of production (landlord and peasants) Around 15th century, landlords realize there's a boom in wool market landlords start raising sheep Don’t need as much peasants Peasants evicted Proletariat arises Capitalists arise Contradiction between changing forces of production and relations of production more peasants go to city and artisans start hiring and training them The artisans become capitalist, own the capital Change of forces of production and relations of production contradicts and transitions into a capitalist mode of production Forces of productions change > Relations of productions change > Capitalist mode of production > Socialist mode of production During industrial revolution, working class is downtrodden, terrible working conditions Made Marx interested in dynamic of capitalism Creates story of inequality and class struggle Capitalist system is based on the exploitation of working class in order to stay in business and competition because it’s a structural imperative Some capitalist that run out of business, go into the working class Immiseration rich get richer (also get smaller), poor gets poorer (gets bigger) As technology and capital develop, can reduce number of people hired class conflicts start to evolve Revolution explodes and everyone owns factory and shares means of production ends in communism Problem of Order, why the world isn’t communist and no revolution: The State: source of repression Source of legitimation enough protection to keep working class quiet Reserve army of unemployed can’t complain because someone else can take your job Ideology religion, even though your life is terrible, if you endure, you will be promised heaven Material payoffs overall standard of living in the population increases Effect on Individuals Alienation from work doing one thing over and over Alienation from product of work hate the product so much Alienation from people at work boss work Alienation from human potential As far as Marx could see into the the future, his alienation was theory According to Blauner’s theory, post industrial alienation goes down September 21st Notes on Durkheim: Gave birth to functionalism evolution and better society 3 influences o evolutionary biology Darwin Slow incremental development Gradual improvement of a species similar to society primitive societies have developed into complex societies Societies will move up to a higher form and better form o socialism Thought it was ridiculous because can’t force society to grow into something new believed growth became naturally developed organically from bottom up Tried to counter Marxist theory of modernization o positivism philosophy of science that says you can only know what you can observe to accumulate data The way to do science is to search for “social facts” Social facts correlation between 2 variables THAT they vary is matter of empirical fact, but WHY is matter of speculation Functional theory of history: o Change in Social Density: change of how compact people are in a geographical territory inevitable and natural change As social density changes, as population increases in specific area Migration Transportation Communication With over population, resources become finite, competition becomes bigger o Competition for Resources Fittest survive in bigger social density 2 possible outcomes: starve to death Change business Specialization Occupational niches o Change in Division of Labor societies have become more sophisticated with more complex division of labor Change of Social structure Traditional: Agriculture based everyone does the same thing everyone is a peasant homogenous self sufficient mechanical Transitions to modern Modern: specialization heterogenous interdependent on one another Problem of Order: o Shifts from mechanical solidarity to organic solidarity o Mechanical solidarity: Common/homogenous experience Functional independence Social Glue that stick people together is that everyone is all alike Can relate, common bond o Organic solidarity: different/homogenous Functional interdependence our recognition of this fact is what matters people rely on one another If one thing stops working the whole system dies Looks towards law and legal codes and get confirmation of his basic idea In history shift of law from repressive> restitutive punishments were harsher because symbolically, a crime against one person is against everyone since everyone is the same message goes out and no one does it Now in modern society, punishments become restitutive to restore interdependent relationship Durkheim says that the shift from mechanical to organic solidarity is shown and proven by the shift of law from repressive to restitutive Symbolically, religion provides sacred symbols to remind us of how we fit into society to reinforce solidarity Religion reinforces mechanical society in ancient days In current society, rituals like birthdays, reinforces the notion that we are interdependent on one another and reinforces organic solidarity Effect on Individuals: o Egoistic suicide Social integration: too low Protestants o Fatalistic suicide Social integration: too high Too much social control and forces people to kill themselves Combat soldiers o Altruistic suicide Social integration: too high Al Qaeda o Anomic suicide Social integration: too low cannot control situation Don’t know what you are doing, too confusing Teenagers When social integration is too high, you lose your individuality and you lose yourself When social integration is too low, you feel like you have no place in society, not enough commitment Catholics vs protestants Catholics longer more developed and more traditions so less suicides Durkheim tried to demonstrate empirically that his results have validity to them Tried to take empirics of natural science and used them to demonstrate that his theory of evolution of social sciences actually stands up Sep 23: Robert Merton’s Functionalism o Nothing survives unless functional o What about apparently dysfunctional things? e.g crime o Latent vs manifest functions: manifest functions we see on the surface latent hidden functions mafia loans, protection o Problem of falsifiability problem with methodology can keep digging deeper and deeper to find latent function make it impossible to falsify Weber influences: o Studied german socialismLots of debate, he believed socialism was worse than capitalism o economic history more perspectives o More historical papers, more perspective o Parents Dad was involved in politics, mom was extremely religious and thought it was important part of life Weber said world is too complicated with multiple factors, not the case that you will inevitably get capitalism in every part of the world. There is no universal law about society that we can discover Development of Capitalism is based on rationalism Bureaucratic plus religion=capitalism Creation of Capitalism in order: look down Bureaucratic State: o Fairness o pro administrators o pro jurists o meritocratic recruitment o Without this, no rational law o rational law law that is predictable and treats us fairly impartially o Needs stable laws to rationally calculate profit margins o Provides citizenship rights Religious Ethic: o “spirit of capitalism”self sacrifice, plow money back into business, buy more cows o epitome of that ethic is found in Protestantism o Teaches asceticism o being frugal and self disciplined brings big payoff later on o Goes straight to heaven o Used his wide knowledge of country development to empirically prove that both religion and bureaucratic state to create capitalist country o China and India both didn’t have capitalism, no bureaucratic state, no religious ethic o China no bureaucratic state o India religion believes in Caste, no incentive, no social mobility Rational Law: o citizenship rights Capitalist Institutions: o Entrepreneurs without private property, there's no capitalism. Individuals with the ability to increase their private wealth o Rational Capital accounting allow people to calculate whether they should engage in an economic transaction. Debit credit, balance sheet. Rational calculations o In traditional societiesPersonal relationships may override rational behavior. System based on personal relationships. Not efficient way of setting up economy Free Labor Markets o can hire people with the skillset I need o Slaves and turfs make it inefficient Free Factor Markets o Get factors and materials for the company To maintain order: o Religious Legitimation protestant ethic, work hard and self sacrifice and spirit of capitalism religious asceticism o Political Legitimation Rule of law helps maintain order in society people believe in fairness of rule of law Legal rational authority stable not tradition authority not charismatic authority o Political violence when things get out of hand to maintain order Effect on individuals: o Iron Cage of bureaucracy: good for maintaining system and organization, bad for individual individuals have less freedom rules restricts us Look on Canvas to compare 3 Founding Fathers of Sociology Sep 25th: Table percentages from 16 top 5% of class get 21 percent of wealth 15 p 28 meals 20 people 23 meals 20 people 15 meals 20 people 9 meals bottom 20% of income get 4% of income top 1% is 352,000 Athletes, CEOs and Entertainers get the most money Growing income inequality between 19702919 Gini Coefficient value of dispersion, from 01 0=equality 1970 0.365 gini coefficient 20100..457 gini coefficient Household income from 19792007 is stable,flatline except for top 1% lot of money increase Growing income inequality change in share of income (19792007: o top 1% increases but lot of volatility o bottom 20% decreases and goes negative o everything is negative except top 20% Average CEOtoworker salary ratio o 1965: 201 o 1978: 301 o 1995: 1231 o 2013: 2951 lower class and middle class have increased work hours but salary remains flat line Income money coming to you o earned income (Wages, salary, tips) o unearned income (interest, dividends Wealth: Value of assets o Financial wealth (stocks, bonds, real estate o Net worth (financial wealth less debt) income!=wealth net worth=assetsdebt Top 20% have 93% of wealth Bottom 80% own 7% of wealth Distribution of wealth is more unequal than that of distribution of income Distribution of net worth and financial wealth, although greater inequality, is much more stable If you have wealth, likely to get income because wealth generates income Top 1% about ⅓ of income is generated by their wealth bottom ⅕ 43.1% income are government transfers There are ebbs and flows of income that are associated with economic recessions and expansions volatility of market is most evident in income stream of rich people than poor people rich gets richer o salaries up o wives working o Capital gains rising/stock market booming o tax cuts poor gets poorer o rising female headed families problem is that woman on average tends to make less money than a man o wages declines (controlling for inflation) Shrinking Middle Class o white collar recessions o job skidding when recessions hit, people who had blue collar jobs get laid off and look for another job and get a worse job o declining union membership due to technological changes o No need as many office workers cuz we got computers o wage stagnation Income inequality in USA is a lot worse than other capitalist states USA is number 1, biggest Gini inequality, biggest income inequality and wealth inequality However, USA lot of economic mobility mobility over small distances within quintiles mobility at the margins of quintiles mobility up and down social mobility in USA is a lot less than other countries due to income inequality Sep 28: Why is mobility related to inequality? The illusion of middle class prosperity Maryist Theory of inequality Functionalist theory of inequality Weberien theory of inequality US compared to a lot of developed city, it has higher income inequality and lower social mobility Why mobility is greater in low inequality countries: o more equal educational opportunity o more equal family resources o more equal health outcomes o better public transportation o better child care Wage stagnation pretty much flat line, despite o international competition even though productivity increases, it’s hard to pass productivity increases to avg workers for higher wages, and may result in raise prices o productivity gains to top managers rising payroll taxes increased in cost of living rising health care and education cost declining purchasing power easy credit: deregulation debt borrowing and credit used to fill gap of wage stagnation and rising costs illusion of prosperity and middle class meltdown Marxist theory: o Class: Ownership of means of production o Two classes: Capitalist own means of production (bourgeoisie) Working class labor power (proletariat) o Sorting Mechanism: o Accumulation process where capitalist is constantly trying to reduce wages and increase profits and keep difference for himself o Proletarianization size of working class keeps increasing since people who are driven out of business must join working class Contradictory class locations: ownership, control, autonomy (Modern Marxist) o class locations that fall between the 2 Marxist class o World is more complicated than 2 classes o your class is based on intersection of ownership, control, autonomy Functionalist Theory of inequality: o only 2 classes? No o Class: Functional position within society o Sorting mechanisms functional needs utility to society o One problem is that some jobs are pretty poorly paid but of great utilitarian value to society, e.g farmers o How is functionality even defined in society? Weberian Theory of inequality o Critique of functionalism: data and mechanisms o Sorting Mechanisms: Social closure class: Market position= education, skills, etc ability to buy stuff in the market status: prestige value can bring about benefits power: political influence o Ralf Dahrendorf( no need to remember name) sorting mech: ownership organizational position credentials power How to get less inequality in society: o political power matters: direct effects welfare generosity less inequality proportional representation 15% of votes, 15% of seats o political power: indirect effects union strength labor movement is stronger leftist government labor government's, social government women in legislature voter turnout Max meets Weber: Wealth distribution o Intergenerational transfers inherit family stuff o education o entrepreneurship Sep 30: Racial economic inequality Take median of income figures of races Can’t take mean cuz outliers are so big In general, family income has increased White: 55,000 Black: 32,000 hispanic: 38,000 Asian: 64,000 ratio to white: black: 100:58.7 hispanic:69.1 Asian: 1.2 Poverty rates Black and Hispanics have a way higher percentage in 2010: white: 9,9% and black: 27.4% and hispanic 26.6% There is a relationship between family structure and income If you are a married couple with kids, you will do a lot better economically Female headed households tend to be greater risk at poverty than any other family type only 44% of blacks are married couples 29.3% of blacks is female headed households what explains persistent differences in economic status Now you compare incomes pinned to educational equals income gaps between whites and black shrinks a lot to 1012% Emergent black middle class, but significant emergent underclass of blacks underclass: high unemployment higher female headed households higher poverty Debate: 1960s1970s o Intelligence bernstein made this argument: Measure IQ IQ is inherited IQ causes life outcomes argument was the black people are less intelligent so didn’t do well o Critique IQ tests are biased language format twin studies are misleading even though genetically identical people are different, families that are screened aren’t much different correlation does not equal causation controlling education reduces differences o Culture of poverty and Moynihan Report: family structure as a result of slavery, family structure is in disarray, continued up till reconstruction and 20th century absence of male role models did not nurture work ethic, responsiblity etc illegitimacy, female headed households poverty “tangle of pathology” self perpetuating, one generation to the next with no male role models o critique: control for social class no control group, compared whites to black if you give control family structure problem disappears slavery and inequality, black people did this to themselves? “pathologies” are strengths feminists yo, Blaming the victim o The big chill: academic community see Moynihan get destroyed and lot of people walk away from the topic Debate:1980s1990s o Perverse government incentives welfare spending rising welfare causes laziness if low paying jobs, can just quit and depend on welfare welfare causes high fertility family support programs based on amount of children welfare causes female headed families don’t need husband o Critique in inflated adjusted terms, welfare spending did not rise from 19801990s welfare recipients want to work people on welfare wanted to work, but couldn’t find it comparative data states with the highest welfare expenditures, actually had lower rates of female headed family o Intelligence (2): intelligence is inherited cognitive elite spend money to educate smart people o critique: IQ test administered to teens Army intelligence test, what about people younger than 14 failed to control key variables (joblessness) Structural FActors: o intra class competition competition for jobs blacks excluded from good jobs, unions excluded black from membership blacks subject to political discrimination racism/prejudice o inter class competition employers divide and conquer Oct 2: Structural vs individual characteristics Structural factors: intraclass competition o competition for jobs o blacks excluded from good jobs, unions o blacks subject to political discrimination o Racism/prejudice structural factors; interclass competition o employers divide and conquer o capitalist want to keep wages down o Drive racial wedge into working class to keep it divided Debt Traps: o racially targeted predatory lending mortgages subprime mortgage credit cards o Wages flatlining, but everything increasing Julius Wilson: o Declining Significance of RAce Preindustrial (<1875) souther: interclass competition people defending slavery to keep wages for poor white people down North: intra class competition Industrial Era (18751940) Migration:urban, north, blue collar moving into cities due to increase automation heading north intra class competition everywhere inter class competition everywhere Modern era AFter WW2 economy is booming blacks move into labor force during war effort two black americas suburbanization jobs are moving to suburbs, so those who can afford it do so. Migration #2 affirmative action all kinds of opportunities appear for blacks if they are qualified for the jobs (high school education) Lot of public sector jobs if you miss it, you're stuck racism barrier becomes of declining significance declining significance of race historic discrimination blacks are super vulnerable to certain economic changes thats about to happen o Truly disadvantaged: growing “underclass” root causes historic discrimination big vulnerability in black communities in urban areas lot of them are in manufacturing sector competition starts to increase from Europe and Japan Lot of heavy industry lose their place in international competition A lot of good jobs for black people start to disappear structural change: job loss, women, baby boomers baby booming generation start to move into labor market woman also start going into labor market Transformation of black urban class structure strong communities with different classes start breaking up jobs start heading to suburbs manufacturing starts moving down to south where labor is cheaper communities start to falter fewer people start to go to church and giving taxes schools start sucking family start to breakdown: female headed families\ shift in amount of marriageable men: pool of economically attractive men start to shrink increase in poverty and crime o When Work disappears: When he interviewed people: they said don’t want welfare Single Mom’s hate it. Rather marry Everyone wants a job These poor people all hold traditional American values, despite being in prostitution and drugs Cultural adaptation to environmental constraints since work has disappeared in the communities Wish they could do real work, but no opportunities o More Than just Race Structural Change Structural change in economy political changes (affirmative action) 2 black Americans baby boomers and woman enter labor markets Community Change transformations of social institutions Rise of black urban underclass social isolation deteriorating family poverty crime Culture Black: cool poise, defeatism white: statistical discrimination laissez faire racism Cultural Capital: o ability to navigate institutions o poor blacks haven’t learned to navigate institutions educational system need a certain knowledge base health care system labor market Oct 5 Poverty rates are higher for blacks than that of white more poor people that are white than black Wilson’s policy solutions o Universal programs to reduce poverty and black white inequality o programs that apply to everyone o economic growth policy o full employment policy o active labor market policy o social policy child care health care earned income tax credit These disproportionately helps lower class Married household get a lot more median income lowest income female headed Rise of single mother families Creates feminization of poverty If you look at poor families, over time, they are increasingly headed by woman Why the rise in single parent families: o government welfare policies declining benefits rise in single mom families, but flat line or decline of value of welfare benefits international comparisons advantaged women o Independence effect as more and more women entered labor force, they had the means to support themselves Divorce rates rising Marriage rates declining men’s attitude towards marriage changed in 1950. Men became less and less attractive great sex life without marriage men greater chance of disease due to higher stress since have to provide for family marriage is killing men as people grow older, interests change eventually interests in man and woman change and stifled each other's development not marrying in the first place, not trusting other men in the ghetto due to financial and social well being o Declining in men’s earnings o Norms about divorce and childbearing women make less than men and put single mother families more at economic risk Woman hold more service sector jobs, management, sales However in each of the job sections, they have the lower paying jobs, e.g nurses compared to doctors Child support policies: o single parent families in other countries are better off and got better child support o 40% of time not eligible to pay child support o 20% get no award o 20% get partial award o 20% get full award non payment by absent parents was a big problem problems with child support system o Law varies across states o Awards vary across courts within states o payment is voluntary o enforcement is ineffective Experimental Child support program o Standard Awards: 1 child=17% 2children=25% 3children=29% 4 children= 31% 5 or more children = 34% o payroll withholding if doesn't pay, then can withhold income, pay goes straight to court o minimum benefit: $3000 per child if unemployed o childcare subsidy: $1 for each hour mom worked Reduced the amount of single mom families that were poor child support became uniform State of Wisconsin was saving money on traditional welfare payments by doing this Family Welfare policy: o pre1800: not much o 1800s: still not much free public education kids have somewhere to go civil war pensions short term, once last widow dies, it ends o progressive era: a little bit more workmen’s compensation after workmen get injured widow’s pensions o 19301995: Means tested programs there's a threshold New Deal:major expansion (FDR) AFDC meanstested discourage women from working strings attached to how much women can get AFDC. More you make, less you get. Post War Era: Major reform (Johnson/Nixon) AFDC eligibility loosened increase the budget encourage working penalties for woman working decreased Attack on Welfare(Reagan/Bush) budget cuts Trying to get women into workforce to decrease welfare work requirements Volunteerism (thousand points of life!) if state decreases welfare, local community will start rising up o Reagan Bush era (Theory) reduce attraction of welfare force women to work eliminate incentives to have kids reduce incentives for husbands to leave o Reagan Bush era policies actually hurt families (reality) go to table work requirements expectations worked women went out to work, less dependent on wefare but on IF economy is healthy, IF employers are hiring, IF unemployment rate is low however independence effect is encourage more likely to dumb the guy Child Support worked the way it was suppose to work Family Welfare 1996 o end welfare as we know it (Clinton) o temporary assistance for needy families act (TANF) 5 year lifetime maximum on traditional welfare payments tougher work requirements no adjustments for family size block grants money given to states and they have good latitude to spend the money o But… earned income tax credit (EITC) when you file federal income tax, check threshold and you get a tax credit to make up the difference if you have a full time job. You get a refund strong economy higher minimum wage and then great recession Middle Class Meltdown in America: Middle class is standard by which economic opportunity and prosperity is judged Middle class prosperity in the late 20th and early 21st centuries is an illusion Lots of middle class are struggling Stereotypes of work hard, steady jobs doesn’t apply as much now Move from a manufacturing economy to one centered on services changed realities of Middle class Americans shift from long term employment to short term employment Live paycheck to paycheck No economic security from being a retiree or marriage Neoliberalism promotion of free markets, reduced trade barriers and global movement of capital and labor to different parts of the world incorporates a search for quick profits and ability to deliver these in short time frame American welfare is least generous in the world As technology becomes more advanced, no need for as much labor, very temporary jobs unions have no power credit replaced earnings for middle class Economic prosperity is not benefiting everyone observers assume American who are struggling are not skilled enough. This is not true since system is so unstable Chapter 2: Middle class based of socioeconomic status (SES), income of 4000080000 Reason for middle class struggling to pay bills involves globalization and the ability to move productive investment to different parts of the world electronically and the spread of neoliberal economic ideologies that promote free trade, low trade barriers and reduced government regulations No US social safety net to provide insurance etc 21st century new indentured servitude “post industrial peasant” someone who is so in debt that those to whom they owe money control his or her life people are indebted to bankers Chapter 3: Macroeconomics study of the relationship between supply, demand and income Keynesian economics increase AD and government intervention Lot of stagflation Did not work well All form of intervention has unintended consequences Gov should use fiscal policy: buying and selling of bonds, taxes to decrease inflation Supply side econ: o should take away perverse incentives tat made people work less o take away disincentives to work, invest, and save productivity and savings would increase and improve o less regulation in big corps o more competition o privitization rise of supply side economics led to spread of neoliberalism neoliberals believed that international trade and domestic economic activity are best governed by open and free markets, minimal government regulations, maximum capital and labor movement Since 1980s due to supply side econ income inequality increased substantially record federal deficits Purchasing power of the middle class was a public good, something that was good for everyone but that nobody had any incentive to help This is root of “income/credit squeeze” Decline of real income and purchasing power of middle class in recent decades family incomes have ballooned for the upper classes and stagnated for the middle class CEO salaries increased dramatically Lower wages and job instability increased during the 1990s economic instability has increased faster than economic inequality Consumer economy to grow despite all this This is cuz they increased their work hours, reduced their savings and increased their debt load Productivity relative rate at which inputs turn into outputs measuring productivity is an inexact science Gains in market economy must be reinvested into capital to get new technology REinvestment creates worker displacement instead of investing in new tech, corporate managers overpaid themselves and took money Corporate profits increased but reinvestment declined level of stock market activity has risen, but only 22 % of all US households have direct stock holdings Most is in upperclass Median family net worth has declined for middle class families by 40% despite wealth gains Chap 4 Merger and acquisition activity act of buying, selling and merging existing businesses through stock and equity exchanges Through these activities, CEO can sell their stock option shares when the price is at its peak and pocket money, while not changing productivity of company Less regulation allowed more merging and allowed big companies to write off debt when they merge or acquisition. Layoff often result from the massive debts and acquisition executives could falsely announce their companies profits, when in fact it was going down and sell high stock prices real wages have declined as productivity has increased, indicating that there are considerable revenues and profits to redistribute productivity has been at its highest Sometimes when companies invest profits in markets, and money that provides backing for lending institutions to extend credit that money can be used to increase compensation Middle class has been loaned money that it could have been paid Chap 5 After deregulation of banking industry, most types of credit available and increased profitability of lending investors have fueled the lending industry by purchasing assetbacked securities that help lenders spread the risk of lending and further maximize profits Deregulation led to: o maximum interest rates on bank deposits were eliminated o constraints on securities dealing were removed o interstate branch banking blossomed Lot of banking and industry consolidation Lot of fraud and abuse from lending Increased use of credit cards due to aggressive advertisement to lower class, college students and children Revolvers people who don’t pay all debt in one billing cycle and have to pay interest next cycle convenience users people who pay all money owed first cycle still make profit off convenience users due to merchants pay issuing companies a fee based on a percentage of every purchase made with their cards Credit card is convenient so people use it more this is called “temptation to imprudence Lot people started shifting from credit card debt to home equity loans Used homes as collateral more flexible lower interest rates and high loan to value ratio home equity was more likely to be paid back during billing cycle Lot of people turned to leasing cars, despite in the long run being more expensive than simply buying Lot of people go to pawnshops Lot of people also go to checkcashing outlets for cash that you haven't gotten, payday loans and title loans PAyday loan often make problems worse Since consumers believe that they could be prosecuted for passing a bad check, the payday loan become their priority debt Rent to own is popular too, but the items are 3 times more expensive To spread risk, investors by assetbacked securities annual growth in consumer debt was between 5 and 18% in all but 6 years during 1989 2012, but
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