9.2.3 Stratification of Socioeconomic Classes

In the last century, the United States has seen a steady rise in its standard of living, the level of wealth available to acquire the material necessities and comforts to maintain a specific lifestyle. The country’s standard of living is based on factors such as income, employment, class, literacy rates, mortality rates, poverty rates, and housing affordability. A country with a high standard of living will often reflect a high quality of life, which in the United States means residents can afford a home, own a car, and take vacations. Ultimately, standard of living is shaped by the wealth and distribution of wealth in a country and the expectations its citizens have for their lifestyle.

Wealth is not evenly distributed in most countries. In the United States, a small portion of the population has the means to the highest standard of living. The wealthiest one percent of the population holds one-third of our nation’s wealth while the bottom 50 percent of Americans hold only 2 percent. Those in-between, the top 50 to 90 percent hold almost two-thirds of the nation’s wealth (The Federal Reserve, 2021).

Many people think of the United States as a “middle-class society.” They think a few people are rich, a few are poor, and most are fairly well off, existing in the middle of the social strata. Rising from lower classes into the middle-class is to achieve the American Dream. For this reason, scholars are particularly worried by the shrinking of the middle class. Although the middle class is still significantly larger than the lower and upper classes, it shrank from 69 percent in 1971 to 51 percent in 2020. Arguably the most significant threat to the U.S.’s relatively high standard of living is the decline of the middle class. The wealth of the middle class has also been declining in recent decades. Its share of the wealth fell from 32 percent in 1983 to 16 percent in 2016 (Horowitz, Igielnik, & Kochhar 2020).

People with wealth often receive the most and best schooling, access better health care, and consume the most goods and services. In addition, wealthy people also wield decision-making power over their daily life because money gives them access to better resources. By contrasts, many lower-income individuals receive less education and inadequate health care and have less influence over the circumstances of their everyday lives.

Additionally, tens of millions of women and men struggle to pay rent, buy food, find work, and afford basic medical care. Women who are single heads of household tend to have a lower income and lower standard of living than their married or single male counterparts. This is a worldwide phenomenon known as the “feminization of poverty”—which acknowledges that women disproportionately make up the majority of individuals in poverty across the globe and have a lower standard of living. In the United States, women make up approximately 56 percent of Americans living in poverty. One reason for this difference is the struggle of single mothers to provide for their children. One in four unmarried mothers lives in poverty (Bleiweis, 2020). The wage gap, discussed extensively in the Work and the Economy chapter, also contributes to the gender-disparity in poverty.

In the United States, poverty is most often referred to as a relative rather than absolute measurement. Absolute poverty is an economic condition in which a family or individual cannot afford basic necessities, such as food and shelter, so that day-to-day survival is in jeopardy. Relative poverty is an economic condition in which a family or individuals have 50% income less than the average median income. This income is sometimes called the poverty level or the poverty line. In 2021, for example, the poverty for a single individual was set at $12,880 for one individual, $17,420 for a couple, and $26,500 for a family of four (ASPE 2021).

As a wealthy developed country, the United States invests in resources to provide the basic necessities to those in need through a series of federal and state social welfare programs. These programs provide food, medical, and cash assistance. Temporary Assistance for Needy Families (TANF) provides cash assistance. The goal of TANF is to help families with children achieve economic self-sufficiency. Adults who receive assistance must fall under a specific income level, usually half the poverty level, set by the state. TANF funding goes to childcare, support for parents who are working or training a required number of hours a week, and other services. TANF is time-limited. Most states only provide assistance for a maximum of 5 years (CBPP).

One of the best-known programs is the Supplemental Nutrition Assistance Program (SNAP), administered by the United States Department of Agriculture and formerly known as the Food Stamp Program. This program began in the Great Depression, when unmarketable or surplus food was distributed to the hungry. It was not formalized until 1961, when President John F. Kennedy initiated a food stamp pilot program. His successor Lyndon B. Johnson was instrumental in the passage of the Food Stamp Act in 1964. In 1965, more than 500,000 individuals received food assistance. During the height of the pandemic in 2020, participation reached 43 million people.