Income, Wealth, and Occupations

Video Transcription

[MUSIC PLAYING] Welcome to this episode of Sociology, Studies of Society. Today's lesson is on income, wealth, and occupations. As always, don't be afraid to pause, stop, rewind, or even fast forward to make sure you get the most out of this tutorial.

Today, I'm going to be teaching you about the basics of income, wealth, and occupations. So let's start by getting a bunch of terms out of the way. These will help your understanding for both this tutorial and other tutorials, and just your general understanding of terms surrounded around the idea of income, wealth, and occupations.

First one we're going to look at is income. And that's money earned from paid labor or investments. What it's saying there is that income is what you're paid. And you can be paid for your physical work, maybe your physical labor or your mental labor, or you can be paid for your investments. So when your stocks make money or when you own a property and you sell that property, that is your income. That is what you make.

Now, wealth is the monetary value of your money in assets minus any money you owe as debts. So wealth is really what you're worth.

So you get paid income, and that income turns into wealth. You use your income to buy a house. That house would be considered part of your wealth. You have a savings account, that goes into your wealth. Anything that is an asset-- now, if you take out a loan to buy a car, that's also going to be under wealth and it's going to be under two different parts of wealth.

The car itself is going to be considered an asset, which is good for you. It is adding money to your wealth. And then the debt you take on-- so you take on a car loan-- that ends up minusing that money. So for example, actually, I just recently bought a house. Now, we were able to put a relatively small amount down. We put 5% down on our house. And that 5% of the total value of the house, that is money that is into this asset. So we own part of that house.

But what happens, though, is even though we now own this house, we also actually have less wealth, because we owe a lot of money in debt because of that. So wealth is really your balance sheet. At the end, where do you stand? How much money, not just physical money do you own, but how much are the things you own worth? And again, you minus things that are negative for you. You take away the debts.

The other term there, next term there is occupation. This is your job or profession. So your occupation might be a police officer or a doctor, or a teacher. Those are all occupations.

And there are two different ways you can break down occupations. Most generally, in society, you have blue collar and white collar. Not every job directly fits in these two categories, but it really is a good way for thinking about the two different types of jobs in society.

So blue collar worker is someone's job who relates to manual labor. Some examples of that are plumbers or carpenters, construction workers. Those are all blue collar jobs. They're using manual labor. Now, white collared occupations are ones which relate more to intellectual labor. So you can think about a blue collar person being out there in the world, making or fixing stuff, and a white collar person sitting in a cubicle, maybe, and working more on an intellectual type of labor. It doesn't mean that labor is easier or harder or better for society. It's just a way of trying to divide them up.

So now that you have those basic terms down, let's look at a really big term, and that's socioeconomic status, or SES. The actual term, what it means is the measurement of social standing based on a combined picture of different dimensions of inequality.

You're like, what? What does that mean? Basically saying, when you look at someone in society, you're trying to figure out where they stand in society, and you're taking apart many different dimensions. So let's use our most famous sociologist, Weber here, and look at how he defines SES, and then we can talk a little bit about how modern society uses that and tweaks that a little bit.

So Weber really saw SES as a combination of these three different things, of your class, of your status, and your party.

So class is your actual resources and wealth that you have. So if we're looking at someone and saying that they earn this amount of money, so they fall into this category, well, that can be one part of SES, and that falls underneath the class category there for Weber.

Now status, or prestige is another way that Weber looked at SES. And that's how much status you have as a person.

So for example, let's look at maybe a teacher here in modern society in America. Teachers, if you're looking at purely their class, they don't make that much money compared to a lot of society. So looking purely at class, they're not that high. But if you look at their prestige, their status spot in society, that's much higher. We look up to teachers and we really say that teachers are valuable. We just don't pay them financially.

The last part that Weber had was party. And this translate-- he actually talked about party being political power, but it can be power beyond just the political realm. So that's how much power you have as a person.

So all three of these things together, for Weber, combined to make what is SES. Now in modern society, sociologists, they really match at its core these three different parts from Weber, but there's different sociologists who want to include different aspects of society to equal SES.

So if you hear someone say, oh, I work with low SES families, it's going to tie into many different-- so we'll even look at the definition again-- combined picture of different dimensions of inequality. So it's going to take into effect many different things. It doesn't mean that this person is only working with minorities, or it's only working with poor people, or only working with people with low educational resources. All these things tie together to make what SES is.

So when we look at SES or any way that we're breaking down different hierarchies within society, there's this term called social mobility. And social mobility is when you can move up or down in this hierarchy. Well, I want to add to that definition a different twist on that, and that's when your kids can move up or down.

So intergenerational social mobility is the change of social position or rank from up or down from one generation to next. So if you're a society that has a really high rate of intergenerational social mobility, it means that while the parents may be born into a certain class, their kids can easily move up or down in social rankings.

We in America like to think about the American dream and the way our society is as having a really high intergenerational social mobility. So we like to argue for and kind of theoretically say that we have a lot of this in our society, that people can really make it. If you have parents that work really hard, they can help their kids do well and go to college and be successful.

And there is some truth to that. I think sometimes, though, our inner understanding of what it is versus where the numbers are don't quite match up. While we have much more intergenerational social mobility than some nations, it's not quite as high as many of us would think it is.

Just so there's no confusion, there's one more type of social mobility I want to talk about, and that's intragenerational social mobility. Now, intragenerational social mobility is when a person moves up or down social positions and this happens within a generation. So someone is born maybe into a low standing family, and in his or her lifetime is able to move up to a higher place on the social hierarchy. And of course, this type of mobility could also involve moving down.

Now, something associated with these earlier terms is conspicuous consumption. And that's when you're buying goods or services for social status. This happens a lot in American society. And we don't as they do it intentionally, knowingly that we're doing it, but it is happening.

There are many arguments out there that say that buying organic food is actually an act of conspicuous consumption. Now, I personally happen not to be one of these people. I buy organic food, I think not because I'm buying it for status, but because I think it's better for me and I think it tastes better. But many sociologists are out there studying and trying to figure out, well, do people buy-- the type of people that buy organic food, are they really saying something about their social status as much or more than just the health benefits or the presumed health benefits?

And this conspicuous consumption can happen in many different ways. Historically in America, this has really being closely tied with cars, automobiles in a lot of ways. Especially post-World War II, [INAUDIBLE] would come home and when your neighbor would get a really nice car, you would think, oh, I want a really nice car. And it was a way to show your status, to show that you had wealth, to show that you were a successful person.

So today's take away message, first, we looked at five basic definitions. Income is your money earned. Wealth is the value of all your assets minus your debts. Then we looked at occupations, which are jobs and professions, and we broke those down into blue collar jobs and white collar jobs, blue collar jobs being ones from manual labor and white collar jobs being ones associated around intellectual labor.

Then we looked at SES, and that's this measurement of social standing based on a combined picture of different dimensions of inequality. And we learned about intergenerational social mobility, which is moving up or down from generation to generation in social rank, and intra, the same move is happening, it's just happening within a generation. And we also looked at conspicuous consumption, which is buying goods and services for social status.