Social Stratification and Inequality
Social Classes in the United States
Socioeconomic status is just a way of describing the stratification system of the United States. The class system, also imperfect in classifying all Americans, nonetheless offers a general understanding of American social stratification. The United States has roughly six social classes:
- Upper class
- New money
- Middle class
- Working class
- Working poor
- Poverty level
The Upper Class or Old Money
The upper class, which makes up about one percent of the U.S. population, generally consists of those with vast inherited wealth (sometimes called “old money”). Members of the upper class may also have a recognizable family name, such as Rockefeller, DuPont, or Kennedy. Some members of the upper class work, but their salaries are not their primary sources of income. Most members of this strata have attended college, most likely at some of the most prestigious educational institutions in the country.
Example: The Kennedy family is a prime example of an upper-class family. Joseph P. Kennedy made his fortune during the 1920s and passed it down to succeeding generations.
The category called new money is a relatively new rung on the social ladder and makes up about 15 percent of the population. New money includes people whose wealth has been around only for a generation or two. Also referred to as the nouveaux riches (French for “newly rich”), they have earned their money rather than inheriting it. Unlike the members of the upper class, they do not have a family associated with old money.
Example: Oprah Winfrey, Michael Jordan, Bill Gates, and other celebrities, athletes, and business people fit into this category.
The nouveaux riches merit their own category because they make so much money that they lead very different lives from those in subsequent SES groupings. The newly rich simply do not have the day-to-day financial concerns that often plague the rest of society.
The Middle Class
The next rung on the ladder is the middle class, which includes about 34 percent of the population. The members of the middle class earn their money by working at what could be called professional jobs. They probably have college educations, or at least have attended college. These people are managers, doctors, lawyers, professors, and teachers. They rarely wear uniforms, although some might wear distinctive clothing, such as a physician’s white coat. They are often referred to as the white-collar class, referring to the tendency of many middle-class men to wear suits with a white shirt to work.
The Working Class
The working class makes up about 30 percent of the population. Its members may have gone to college, but more have had vocational or technical training. The members of the working class have a variety of jobs, including the following:
- Factory worker
- Truck driver
- Police officer
This category is also called the blue-collar class in recognition of the likelihood that many of these individuals wear uniforms to work rather than suits. People in the working class are more likely to be members of unions than are people in the middle class. While there are differences between the working class and the middle class in terms of their values, behaviors, and even their voting records, their standards of living are often similar, but not identical.
The Working Poor
Another new rung on the socioeconomic ladder is the working poor. Estimating how many Americans are in this category is difficult because the line separating them from those who are at or below the poverty level (see next section) is not solid. Estimates say that approximately 20 percent of the population could be classified in either the working-poor or poverty-level categories.
People in the working-poor category have a low educational level, are not highly skilled, and work at minimum-wage jobs. They often work two or more part-time jobs and receive no health insurance or other benefits. These individuals are vulnerable to falling below the poverty line. They have very little or no job security, and their jobs are easily outsourced to countries where labor is cheaper.
Every economy needs a group of workers that it can hire during an economic upswing and lay off when the economy weakens. The members of the working poor are such people; they are the “last hired, first fired.”
The Poverty Level
People at the poverty level lack the means to meet their basic needs for food, clothing, and shelter. The poverty level, set by the federal government in the mid 1960s, is an estimate of the minimum income a family of four needs to survive. The poverty level is currently about $18,000 per year—a figure that has come under fire for being woefully inadequate, mainly because poor people, particularly those in urban areas with high costs of living, need more money to survive.