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The term stratification system refers to the complex of institutions that generate inequalities in income, political power, social honor, and other valued goods. The main components of such systems are: (1) the social processes that define certain types of goods as valuable and desirable, (2) the rules of allocation that distribute these goods across various roles or occupations in the division of labor (e.g., houseworker, doctor, prime minister), and (3) the mobility mechanisms that link individuals to these roles or occupations and thereby generate unequal control over valued goods. It follows that inequality is produced by two types of matching processes: The social roles in society are first matched to ”reward packages” of unequal value, and individual members of society are then allocated to the roles so defined and rewarded.
There is a growing consensus among academics, policymakers, and even politicians that poverty and inequality should no longer be treated as soft ”social issues” that can safely be subordinated to more fundamental interests in maximizing total economic output. This growing concern with poverty and inequality may be attributed to such factors as: (1) a spectacular increase in income inequality in many late-industrial countries that was entirely unpredicted and contradicted the reigning paradigm that late industrialism would bring increasingly diffused affluence; (2) the persistence of various noneconomic forms of inequality (e.g., racially segregated neighborhoods, gender pay gap) despite decades of quite aggressive egalitarian reform; (3) the mounting evidence that extreme income inequality, far from increasing a country’s economic output, may be counterproductive and in fact reduce total output; (4) an emerging concern that poverty and inequality may also have negative macro-level effects on terrorism, ethnic unrest, and other collective outcomes; (5) a growing awareness of the negative individual-level effects of poverty on health, political participation, and a host of other life conditions; (6) the rise of a ”global village” in which spatial disparities in the standard of living have become more widely visible; (7) an idiosyncratic constellation of recent news events that have exposed troubling inequalities (e.g., Katrina, executive compensation scandals); and (8) a growing commitment to a broader conception of human entitlements that encompasses ”rights” to basic social amenities (e.g., housing) as well as rights to basic forms of social participation, such as employment.
The first task in understanding inequality and poverty is to specify the types of assets that are unequally distributed. It is increasingly fashionable to recognize that inequality is ”multidimensional,” that income inequality is accordingly only one of many forms of inequality, and that income redistribution in and of itself would not eliminate inequality. When a multidimensionalist approach is taken, one might usefully distinguish between the eight types of assets, each understood as valuable in its own right rather than a mere investment item.
It is now fashionable, for example, to examine the structure of inequality with respect to such outcomes as computer literacy, mortality and health, risk of imprisonment, and lifestyles.
Arguably, the most dramatic social scientific finding of our time is that income inequality has increased markedly since the 1970s, reversing a longstanding decline stretching from the eve of the Great Depression to the early 1970s. We have since witnessed one of the most massive research efforts in the history of social science as scholars sought to identify the ”smoking gun” that accounted for this dramatic increase in inequality. Initially, the dominant hypothesis was that deindustrialization (i.e., the relocation of manufacturing jobs to offshore labor markets) brought about a decline in demand for less-educated manufacturing workers, a decline that generated increases in inequality by hollowing out the middle class and sending manufacturing workers into unemployment or the ranks of poorly paid service work. This line of argumentation still has its advocates but cannot be reconciled with evidence suggesting that the computerization of the workplace and related technological change has been a driving force behind a heightened demand for highly educated workers. Because of this result, the deindustrialization story has now been largely supplanted by the converse hypothesis that ”skill-biased technological change” has increased the demand for high-skill workers beyond the increase in supply, thus inducing a short-term disequilibrium and a correspondingly increased payoff for high-skill labor. At the same time, most scholars acknowledge that this story is also an incomplete one and that other accounts, especially narrowly political ones, must additionally be entertained. Most notably, some of the rise in income inequality in the USA is clearly attributable to the declining minimum wage, a decline that in turn has to be understood as the outcome of political contests that increasingly favor pro-inequality forces.
Although inequality scholars have long sought to understand how different ”reward packages” are attached to different social positions, an equally important task within the field is that of understanding the rules by which individuals are allocated to these positions. The language of stratification theory makes a sharp distinction between the distribution of social rewards (e.g., the income distribution) and the distribution of opportunities for securing these rewards. It follows that social scientists have become interested in the study of opportunity and how it is unequally distributed. This interest leads to analyses of the net effects of gender, race, and class background on labor market rewards. The size of such net effects may be uncovered statistically by examining between-group differences in income (and other rewards) in the context of models that control all merit-based sources of remuneration. Additionally, experimental approaches to measuring discrimination have recently become popular, most notably ”audit studies” that proceed by: (1) sending employers resumes that are identical save for the applicant’s gender, race, or class, and (2) then examining whether call-back rates (for interviews) are nonetheless different across such groups.
- Grusky, D. B., Ku, M. C., & Szelenyi, S. (2008) Social Stratification: Class, Race, and Gender in Sociological Perspective, 3rd edn. Westview Press, Boulder, CO.