Lecture 5 Flashcards
Social Class and Economic Inequality
what is operationalization?
turning abstract concepts into measurable observations
what is the Dunning-Kruger effect?
when people with limited knowledge overestimate the amount of knowledge they have
what is inflation?
rate of increase of prices over a period of time
what is average income?
total score divided by the number of scores
what is median income?
ranking all scores from least to greatest then finding the middle score
why is median income preferred over average income?
rich people calculated in the average income is more likely to skew the results
what are the two types of income?
- active income
- passive income
what is active income?
income received by performing a service
what is passive income?
income not tied to active labour like stock market
why is it important to learn about passive income through the stock market?
- important to know in real life
- help understand how the rich stay rich
what is the Matthew effect?
those who begin with advantages accumulate more and more advantages
what are ascribed statuses?
status given at birth
what are assigned statuses?
status assigned at birth
what are income quintiles used for?
to study how income has changed over time for people of different socioeconomic classes
what is before tax or market income?
new earnings earned before taxes
what is after-tax income?
measure of income after taxes are paid
what is the GINI coefficient used for?
measure of how the income in society deviates from the equal distribution of income
what does a score of 0 or 1 mean in the GINI coefficient?
0 means income is equally distributed in society whereas 1 means income distribution is completely unequal
why have the rich gained so much?
RBC
- the rich tend to get richer
- workers losing bargaining power
- corporate consolidation causes fewer small business owners
what are labour unions?
organization from a particular trade made to fight for better working rights
what is oligopoly?
when a small number of businesses control the market resulting in competitors’ price-matching in mutually beneficial ways
what are the two main reasons for inequality growing with little response?
- growth of two-income households
- access to loans and debt
why has inequality risen?
globalization
how has inequality risen?
- wealth
- access to loans
what is wealth?
another word for net worth which is assets (money earned) minus liabilities (loans)
what are assets?
something that holds value
what are liabilities?
something that can potentially takes away value
back then, how was debt viewed?
poorly
what is absolute poverty?
when the subject lacks the means to meet basic needs
what is invisible inequality?
inequality that can only be known if someone told you about it
what is relative poverty?
how poor someone is relative to someone else
what is extreme poverty?
living on less than 1.25 dollars a day
