Income & Wealth
What is Economic Inequality?
Income is defined as earnings; money received from a paycheck, stock return, or Social Security benefits.
lowest quintile: median income is $13,000
top 5 percent: median $345,000
Wealth is defined as assets; savings accounts, housing, cars, investment portfolios, etc.
Economic inequality is often tied to other factors like race
According to US Census Bureau data, asians and whites had the highest median household income in the past 10 years, with hispanics and blacks following far behind.
Kadowaki, J., fall 2021. SOC 339: Economic Inequality. slide #2,3,4,14,18, 22, 23.
Why Economic Inequality Matters
In an NYT article by Dr. Samuel Scheffler, he write that inequality is not just about some having less than others, but it's also about some people not having enough.
Economic inequality has further implications than money, like political power and influence.
Those who are wealthier have the means to ensure that their needs are met, while those at the bottom can be left behind.
Social relationships can be damaged by inequality by people putting themselves and others into groups based on how wealthy each person is.
It can be hard for some people to feel truly free if they are not able to move up in society because of a situation that they were born into.
Democracy can be threatened if there is too great of a divide and if certain citizens have a disproportionate influence on the system.
Kadowaki, J., fall 2021. SOC 339: Economic Inequality. slide #2,3, 4,14,18, 22, 23.
https://www.nytimes.com/2020/07/01/opinion/economic-inequality-moral-philosophy.html
Income and Wealth Trends Within The United States
Increasing Gaps in Income
The growth in income in recent years has shifted to upper-income households causing an increase in the wealth gap.
From 1971 to 2019, the share of adults in the upper-income class has increased from 14% to 20%.
The income level gap between the upper and lower class is increasing, which is causing middle-income households to diminish.
This trend is important to highlight since the U.S. middle class contains the majority of Americans.
From 1970 to 2018, the upper-class median income increased from 29% to 48%, the middle-class median income decreased from 62% to 43%, and the lower-class median income decreased slightly from 10% to 9%.
This demonstrates that there was more income movement to the top and the bottom of the median income ladder, which supports the wealth gap increase.
HOROWITZ, J., IGIELNIK, R. and KOCHHAR, R., 2021. Trends in U.S. income and wealth inequality. [online] Pew Research Center’s Social & Demographic Trends Project. Available at: <https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income- and-wealth-inequality/> [Accessed 8 December 2021].
Racial Wealth Divide
Not only are there income and wealth divide trends in the United States within the social classes but also racial divides.
The highest median household income levels are encompassed by Asian individuals with making an average of $94,903, while White individuals make a median income of $74,912 as of the year 2020. Black and Hispanic individuals have the lowest median income levels, with Black individuals making a median income of $45,870 and Hispanic individuals making a median income of $55,321 as of the year 2020.
HOROWITZ, J., IGIELNIK, R. and KOCHHAR, R., 2021. Trends in U.S. income and wealth inequality. [online] Pew Research Center’s Social & Demographic Trends Project. Available at: <https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income- and-wealth-inequality/> [Accessed 8 December 2021].
Factors Contributing to the Gap Trends
Changes in structural factors include:
technology
globalization
increasing college costs
declining power of unions
tax policies favoring the wealthy
Kadowaki, J., fall 2021. SOC 339: Economic Inequality. slide #2,3, 4,14,18, 22, 23.
Social class reproduction
Due to the greater concentration of wealth at the top, this leads to the wealthy have more influence and power politically. The upper class makes sure that their children maintain a similar status as their parents.
When an individual is born into the lower class they are faced with declining opportunities, greater segregation by income, increasing debt, and negative health and social outcomes that do not allow the individual to easily increase their social class. Most of the time, this leads to social class reproduction from their parents.
Kadowaki, J., fall 2021. SOC 339: Economic Inequality. slide #2,3,14,18, 22, 23.
Covid-19 Impact on Income and Wealth Trends Within the U.S.
Across the country, just 20% of Black Workers are able to work from home, compared to 30% of White workers and 37% of Asian workers according to the Economic Policy Institute.
White workers get the privilege to work remotely whereas blue-collar workers like service industry workers must go to work and risk being exposed to Covid-19 or go without income at all.
A recent survey from World Economic Forum states that 3 in 4 households suffered declining income since the start of the pandemic.
1 in 5 African American households in the U.S. says they are going hungry.
According to the World Economic Forum, the pandemic is a booster for the ultra-rich which again contributes to the wealth gap.
In the U.S., the top five billionaires increased their wealth by 26%, whereas over 44 million people lost their jobs since the pandemic started.
Goldin, Ian. 2020. “Covid-19 Is Increasing Multiple Kinds of Inequality. Here's What We Can Do about It.” World Economic Forum. Retrieved December 8, 2021 (https://www.weforum.org/agenda/2020/10/covid-19-is-increasing-multiple-kinds-of-inequality-here-s-what-we-can-do-about-it/).
Adamczyk, Alicia. 2020. “Inequality Has Been Building for Decades in the U.S., but Experts Say the Pandemic 'Ripped It Open'.” CNBC. Retrieved December 8, 2021 (https://www.cnbc.com/2020/10/23/coronavirus-is-exacerbating-economic-inequality-in-the-us.html).
Wealth Inequality is not an isolated issue. It connects to nearly all other forms on inequalities.
Crime and Policing
People living in poverty are arrested at much higher rates than those above the poverty line.
Police are more likely to target poorer communities.
Lead poisoning can affect brains and lead to more violent behaviors, which can often result in crime. Impoverished communities often cannot afford to have their lead pipes taken out and replaced.
Poverty and its effects are criminalized.
Poor people without housing could be targeted for loitering.
Poor people without food or other necessities could be targeted if they are driven to stealing.
Poor people with unfixed cars could be targeted for having broken brake lights, an expired license plate, nonfunctioning windshield wipers, etc.
Hayes, T. N. and Barnhorst, M,. Jun. 30, 2020. "Incarceration and Poverty in the United States," American Action Forum, https://www.americanactionforum.org/research/incarceration-and-poverty-in-the-united-states/
Education
A large portion of public school funding often comes from their local communities, meaning that the less money a community has, the less resources their school will have.
Children from wealthy families often have more access to tutors, learning materials at home, and parents with the time to help them with their school work.
Kadowaki, J., fall 2021. SOC 339: Educational Inequality, slide #4-6, 12-16.
Environment and Pollution
Residencies near factories and away from nature are often low-cost, thus making them the only option for some living in poverty.
Similarly, it is often cheapest and easiest legally for factories and other high polluters to build in poor communities.
Poor communities typically have less resources to protect against the dangers of climate change.
Kadowaki, J., fall 2021. SOC 339: Environmental Inequality, slide #7-9.
Gender and Sex
Women are paid less than men at comparable jobs.
Anti-abortion laws have forced many people with vaginas into having babies, and many of them are forced to raise the child on their own. Children are expensive, thus putting many of these people into poverty.
Queer individuals often experience discrimination when applying for both jobs and housing, both of which can contribute to their socioeconomic status.
Some queer young people are kicked out of their home by their family due to homophobic and transphobic attitudes. They are then left with no financial support, putting them in poverty from a young age.
Kadowaki, J., fall 2021. SOC 339: Gender and Sex, #13-17
Libardi, M., Feb 26, 2020. "Anti-Abortion Laws: A War Against Poor Women," https://www.equaltimes.org/anti-abortion-laws-a-war-against#.YbDwg9DMI2w
NBCnews, Jun 22, 2020. "Pride Month: 12 Key Numbers Highlighting the Economic Status, Challenges that LGBTQ People Face," https://www.nbcnews.com/know-your-value/feature/pride-month-12-key-numbers-highlighting-economic-status-challenges-lgbtq-ncna1231820
Health and Food
Healthy food is significantly more expensive than unhealthy food. Thus, people in poverty can often only afford to eat food that is not good for them.
Sometimes, no healthy food is even available in high-poverty areas.
Healthcare in America is expensive. Healthcare benefits are often based on employers, with higher paying jobs typically offering better benefits. Thus, many people in poverty are forced to pay for all or most of their medical bills out of pocket, which they might simply not be able to do.
Kadowaki, J., fall 2021. SOC 339: Health Inequaltiy, slide #14-26
Housing and Homelessness
People living in poverty often do not have enough money to afford a quality living residence, if they can even afford any living residence at all.
People living in poverty may not have the money to pay for utilities and rent from month to month. This can lead to lowered living standards or even eviction.
Houseless individuals are at a strong disadvantage in the job market. They may not have the professional clothes, access to hygiene, training , or transportation that might be needed to succeed in a job interview. Thus, houseless individuals are often trapped in poverty.
Kadowaki, J., fall 2021. SOC 339: Community, Neighborhood, and Housing, slide #2-7
Race and Ethnicity
America's roots in the colonization and exploitation of Indigenous land and people, the enslavement of Black people, and the nationalism and its resulting xenophobia towards immigrants has set People of Color in America on a path of oppression.
POC usually have less generational wealth, and with America's low economic mobility, this means that many of them are stuck in poverty.
POC are discriminated against in healthcare, housing, jobs, and more, all of which affect one's wealth and income.
Kadowaki, J., fall 2021. SOC 339: Race and Ethnic Inequality, slide # 2-9, 20
To learn more about any of these issues, see the pages on each topic.
Resource to learn more:
https://www.census.gov/library/visualizations/2021/demo/p60-273.html
Income and Wealth Trends Within The City of Dayton, and How it Compares
Historical Context:
In the early 20th century, thanks to its proximity to waterways, railroads, and other major cities, Dayton was economically booming.
The population in 1910 was about 116,000, which was nearly four times more than it had been just forty years prior.
Dayton factories were evolving quickly to keep up with the latest trends, changing from producing things like iron plows and wooden rail cars to producing things like gasoline engines and electric generators.
Dayton was home to successful entrepreneurs and inventors such as John H. Patterson, Charles Kettering, and the Wright Brothers.
In 1900, Dayton generated more patents per person than big cities such as New York and Boston.
Issues started popping up in the mid 20th century.
More Americans moved west, moving Dayton further away from America's center of urban population.
The population growth slowed through the 1950s, then reversed into a population decline in the next decade.
Wealthier young people began moving into the suburbs at higher rates.
Manufacturing began to lower in importance, taking away employment from many Daytonians.
Dayton's growing Black population were forced by the Federal Housing Association to live almost entirely in the poorer west side.
Many Daytonians were dissatisfied by their local government, leading those who had the money to to move away.
The late 20th century and early 21st century brought Dayton even further into economic trouble.
White flight, encouraged by the racist and classist housing practices of the Federal Housing Association, led even more Daytonians to move out of the city and either into the suburbs or further south.
The construction of interstate highways took away the importance of the railroads near Dayton.
Dayton's rate of educated residents was shrinking as the wealthy and white people (often the only people who could receive high education) moved out of the city.
Many auto-manufacturers, one of Dayton's strongest businesses, shut down due to the growth of Asian auto-manufacturing.
NCR, Dayton's flag ship company, shut down in 2009. This company was both economically and culturally important to Dayton.
The average wage of Daytonians has been declining in proportion to other Ohio cities.
Thus, throughout the 20th century, Dayton saw a loss of population, jobs, and wealth.
The city of Dayton now has one of the highest poverty rates in the nation. In 1994, Dayton had a poverty rate of 14.1%, an 18.6% difference compared to 2021. Since 2002, Ohio's population alone has increased by 1.2%, while the number of people in poverty has grown by 41.7%.
https://www.mercatus.org/system/files/millsap-dayton-ohio-case-study-mr-mercatus-v4.pdf
Present Day:
Households in Dayton, OH have a median annual income of $32,540, which is less than the median annual income of $65,712 across the entire United States.
The poverty rate in Dayton is 32.7%. One out of every 3.1 residents of Dayton lives in poverty.
The Poverty Rate across the state of Ohio is 14.9%, meaning Dayton has a dramatically higher than average percentage of residents below the poverty line when compared to the rest of Ohio.
The economic mobility in Dayton is low.
In the majority of Dayton addresses besides directly surrounding downtown, no matter how rich ones' parents are, a current child is most likely to be earning a below average income by age 35.
https://www.opportunityatlas.org/
Conditions in Dayton offers examples of the connections between wealth inequality and other forms of inequality.
Crime and Policing
The areas in Dayton with a lower medium family income tend to be the areas in Dayton with a higher crime rate.
2021. "The Safest And Most Dangerous Places In Dayton Metro, OH: Crime Maps And Statistics." Crime Grade.org. Retrieved December 1, 2021 (https://crimegrade.org/safest-places-in-dayton-oh-metro/).
2021. "Dayton, OH | Data USA." Datausa.io. Retrieved December 1, 2021 (https://datausa.io/profile/geo/dayton-oh/).
Education
Oakwood Schools, located in a suburb of Dayton, scores above average on both test scores and college readiness. In contrast, Edison PreK-6 School repeatedly scores below average on those same measures.
The area surrounding Oakwood Schools has a median family income of $112,917, while the area surrounding Edison PreK-6 school has a median family income of $13,510 .
This example follows the trend of schools in lower-income areas performing worse than schools in higher-income areas.
2021. "Dayton, OH | Data USA." Datausa.io. Retrieved December 1, 2021 (https://datausa.io/profile/geo/dayton-oh/).
2021. "Explore Edison Prek-6 School In Dayton, OH." GreatSchools.org. Retrieved December 1, 2021 (https://www.greatschools.org/ohio/dayton/691-Edison-Elementary-School/).
2021. "Explore Oakwood High School In Dayton, OH." GreatSchools.org. Retrieved December 1, 2021 (https://www.greatschools.org/ohio/dayton/1242-Oakwood-High-School/)
2021. "Oakwood, OH | Data USA." Datausa.io. Retrieved December 8, 2021 (https://datausa.io/profile/geo/oakwood-oh).
Environment and Pollution
In the less wealthy areas surrounding Downtown Dayton, most residences are either apartments, or houses with small yards. There are only a few smaller parks scattered throughout.
In the wealthier suburbs just outside of Dayton, more residences have larger yards, and there are several large, well-kept parks.
Thus, the more impoverished the neighborhood, the less access to nature they typically have in the Dayton area.
2021. "Dayton, OH | Data USA." Datausa.io. Retrieved December 1, 2021 (https://datausa.io/profile/geo/dayton-oh/).
2021. "Dayton, OH." Google Maps. Retrieved December 1, 2021 (https://www.google.com/maps/place/Dayton,+OH,+USA/@39.7597641,-84.1981138,15.52z/data=!4m5!3m4!1s0x884080d5aedd1403:0xa640e392f20e4ce4!8m2!3d39.7589478!4d-84.1916069).
Gender and Sex
Of adults aged 18 to 44 in Dayton, between 1% and 5% more women live in poverty than men.
2021. "Dayton, OH | Data USA." Datausa.io. Retrieved December 1, 2021 (https://datausa.io/profile/geo/dayton-oh/).
Health and Food
In 2019, 20% of Daytonians were food insecure. Much of that statistic comes from the West Side of Dayton, which, up until recently was a part of a major food desert.
West Dayton is significantly less wealthy than other areas in Dayton.
Gem City Market, which opened in 2021, has been working to combat this food desert.
2021. "Dayton, OH | Data USA." Datausa.io. Retrieved December 1, 2021 (https://datausa.io/profile/geo/dayton-oh/).
Caswell, Bryn. 2021. ""The Need Is Great," Local Organizations Continuing Efforts To Eliminate Area Food Deserts." WRGT. (https://dayton247now.com/newsletter/the-need-is-great-local-organizations-continuing-efforts-to-eliminate-area-food-deserts).
Housing and Homelessness
Roughly 550 people in Dayton and Montgomery county are homeless, yet there are approximately 11,000 vacant properties in Dayton.
Thus, homelessness is not a problem of lack of houses, it is a problem of lack of money.
2021. "Statistics." homefull.org. (https://www.homefull.org/aboutus/statistics/#:~:text=Local,17%25%20are%20families%20with%20children).
Frolik, Cornelius. 2021. "Dayton Has One Of Highest Housing Vacancy Rates In Ohio." daytondailynews.com. (https://www.daytondailynews.com/local/dayton-has-one-of-highest-housing-vacancy-rates-in-ohio/MKIJ5XSXDVEWBJDX6J7VA5ULXQ/).
Race and Ethnicity
Black people in Dayton are 7% more likely to be living in poverty than white people in Dayton.
2021. "Dayton, OH | Data USA." Datausa.io. Retrieved December 1, 2021 (https://datausa.io/profile/geo/dayton-oh/).
What is Being Done to Address These Issues:
There are a variety of non-profits and government programs in Dayton that primarily aim to either support those currently living in poverty, or aim to make jobs more widely available in order to prevent future poverty.
Non-Profit Resources:
YWCA
Women's shelter focusing on combating racial injustice, oppression of women, and economic inequalities
Fights economic inequalities by provide basic needs that must be met before jobs and budgets can be focused on
Hope Center
Service organization focusing on aiding families experiences economic instability
Provides free child health services, early childhood education, and career training
United Way
Non-profit focusing on connecting families in poverty with resources they need
Uses a 24 hour call line and a donation-powered program to provide aid
Government Projects:
https://sudbury.ma.us/selectboardsoffice/2021/11/03/american-rescue-plan-act-of-2021-arpa/
American Rescue Plan for Dayton
https://www.daytonohio.gov/953/American-Rescue-Plan-for-Dayton
Pres. Biden's plan for helping cities recover financially and physically from the pandemic
Initiatives involving community programs, job creation, funding for at-risk industries
https://knowledge-leader.colliers.com/stephen-newbold/u-s-economy-2020-in-review-and-outlook-for-2021/
Dayton Economic Attraction Program
The City of Dayton and the Downtown Dayton Partnership's plan to revitalize the city
The plan focuses bettering infrastructure, amenities, and living conditions to invite more businesses and tenants
https://4vector.com/free-vector/dayton-area-chamber-of-commerce-47621
Dayton Area Chamber of Commerce
https://daytonchamber.org/services/business-resources/financial-assistance/\
Part of city government with aims to help businesses to create jobs
Provides tax credits, loans, assistance, and grants for businesses expanding the job market
What Else Could be Done, in Dayton and the Whole Country
It depends on what the goal is.
Some argue that our current level of wealth inequality is okay. They say it leads to productivity.
Some argue that we need less inequality, but still a little is okay. They say too much inequality is unfair, but no inequality is either impossible or harms productivity.
Some argue that the goal should be to eliminate inequality entirely. They say that inequality of any amount hinders a society's ability to flourish to its full potential.
If you agree with #1:
Programs that support businesses and economic success should be sought out and created
Capitalistic policies; such as rights of business owners, lowering taxes, and the privatization of prisons, healthcare, education, etc., should be encouraged
If you agree with #2:
Support should be given to programs that:
Provide aid to those in poverty
Provide job training
Bring in more businesses
Support should be given to policies that:
Raise taxes
Support public, free, and universal education and healthcare
Make participation in democracy easier
If you agree with #3:
Advocate for systemic change
Educate others about the benefits and logistics of a more collectivist and cooperative society
Listen to the needs of those who are currently oppressed and forced into poverty, and provide immediate help to those while we are still in this system.
Resources:
Kadowaki, J., fall 2021. SOC 339: Economic Inequality. slide #2, 3, 4,14,18, 22, 23.
https://www.brookings.edu/blog/up-front/2017/06/01/new-evidence-that-lead-exposure-increases-crime/
https://crimegrade.org/safest-places-in-dayton-oh-metro/
https://datausa.io/profile/geo/dayton-oh/
https://www.city-data.com/income/income-Dayton-Ohio.html
https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/
https://www.mercatus.org/system/files/millsap-dayton-ohio-case-study-mr-mercatus-v4.pdf
https://www.cnbc.com/2020/10/23/coronavirus-is-exacerbating-economic-inequality-in-the-us.html