wealth

In our current era defined by financial crises and the Panama Papers, the ultra-rich have taken extra steps to keep their private lives off the radar. When sociologist Brooke Harrington began to inquire into their secrets — through interviews with wealth managers who specialize in protecting the fortunes of the world’s richest people — she discovered not only how the rich keep getting richer, but also how they spend their limitless fortunes. In a vivid account of her research in The Guardian, she explains that the rich not only rely on wealth managers to preserve and expand their fortunes, but also to cover up drug addictions, promiscuous behavior, secret love affairs, and laziness at work. Her interviews highlight how behaviors that are often associated as ‘pathologies’ of the poor are considered to be mere ‘eccentricities’ among the rich. Harrington expands further,

“Behaviors indulged in the rich are not just condemned in the poor, but used as a justification to punish them, denying them access to resources that keep them alive, such as healthcare and food assistance.”

Her findings also reveal how the ultra-rich take advantage of conditions that would mean life-threatening experiences for people in poverty. For instance, having no-fixed residence exposes the poor to a high risk of homelessness and forced migration. The ultra-rich, on the other hand, can acquire different residences and nationalities from varying countries with ease. And this ‘homeless’ status actually allows them to avoid the taxation of their fortunes. As one of Harrington’s interviewees, an extremely wealthy businessman, declares:

“I am not tax resident anywhere. The tax man says ‘show me a utility bill’, and the only utility bill I can present is for the house I own in Thailand, and it’s in a language that the European authorities aren’t familiar with. With all the mobility going on in the world, international marriages, governments can’t keep up with people.”

In sum, Harrington’s research shows that we often stigmatize and punish the poor for behaviors that the rich can easily get away with, and that this deception and lack of accountability may have long-lasting impacts for income inequality in the United States.

While considerable media attention has been paid to the student debt crisis in the United States, few stories have detailed how this burden falls disproportionately on Black borrowers. Recently, CNBC interviewed Jason Houle about how student loans contribute to the racial wealth gap.

In their research, Houle and his co-author found that Black Americans accumulate nearly twice as much debt as their white counterparts by graduation. This disparity grows through adulthood as Black borrowers pay their loans at a slower rate than whites (4% per year vs. 10% per year). Fifteen years after college, Black borrowers hold 185% more student debt than whites. Houle contends that “the racial wealth gap is both the biggest and has grown the fastest among those with a college education,” and that student loans are a primary reason for this trend. In fact, student loans explain roughly 25% of the total racial wealth gap by age 30.

Houle offers several explanations for this gap. Black students on average have less financial capacity to pay for college than whites, causing them to pursue more loans. Additionally, Black students are more likely to attend expensive for-profit colleges and use private loans, both of which offer fewer protections to consumers. Houle uses the phrase “predatory inclusion” to describe this phenomenon, remarking that expanded access to higher education for Black Americans has also expanded opportunities for financial institutions to exploit them. These findings have made Houle rethink the metaphor of higher education as an engine of upward mobility: 

“In a world where we have rising college costs and rising student debt, it raises questions about whether or not that engine may be sputtering out.”

More than 20 million people tuned in to the Ford-Kavanaugh hearing on Thursday. Many sociologists provided perspectives on the hearing, outlining everything from the myths about rape to the connections (and differences) with the Anita Hill and Clarence Thomas case. In an op-ed for The Washington Post, Shamus Khan provides his take on how class privilege shaped many of Brett Kavanaugh’s actions.

In his book Privilege, Khan followed students at St. Paul’s, an elite private school in New Hampshire. He describes how elite institutions, including the ones Kavanaugh attended, like Yale, foster privilege among their predominantly upper-class student bodies. This privilege includes ideas that students are “exceptional” and that the “rules don’t really apply to them.” As Khan explains in the article,

“What makes these schools elite is that so few can attend. In the mythologies they construct, only those who are truly exceptional are admitted — precisely because they are not like everyone else…Schools often quite openly affirm the idea that, because you are better, you are not governed by the same dynamics as everyone else. They celebrate their astonishingly low acceptance rates and broadcast lists of notable alumni who have earned their places within the nation’s highest institutions, such as the Supreme Court.”

These narratives of privilege among the elite can have some pretty nasty implications. Khan cites research by economist Raj Chetty demonstrating that admission to an Ivy League school is rarely the result of educational aptitude, but rather extreme family wealth. He asserts that this class privilege, masked by notions of “exceptional qualities,” is tied to beliefs about special treatment among the elite. For example, Kavanaugh’s supporters argue that he deserves the Supreme Court nomination and accountability for actions he committed years ago doesn’t really apply to him. Khan illustrates further how this privilege also shaped Kavanaugh’s actions on Thursday:

“This collective agreement that accountability doesn’t apply to Kavanaugh (and, by extension, anybody in a similar position who was a youthful delinquent) may help explain why he seems to believe he can lie with impunity — a trend he continued Thursday, when he informed senators that he hadn’t seen the testimony of his accuser, Christine Blasey Ford, even though a committee aide told the Wall Street Journal he’d been watching.”

In short, Khan’s research demonstrates how class privilege has shaped Kavanaugh’s actions from the outset, and how this privilege is cemented by the institutions and social circles around him.

The National Weather Service estimates that Hurricane Florence dropped over 8 trillion gallons of rain across North Carolina, and the Federal Emergency Management Agency (FEMA) has just started evaluating how much damage was done. While Hurricane Florence and other natural disasters impact thousands of lives every year, not all groups recover equally. Recent research reported by Mic reveals that non-white households tend to lose wealth after a natural disaster, while white households often profit.

Tracking families from 1999 to 2013, sociologists Junia Howell and Jim Elliot found that white families in the most disaster-hit counties gained $126,000 in wealth on average over the 14 years of the study. By contrast, Back, Latinx, and Asian families in the same counties lost $27,000, $29,000 and $10,000 respectively. “Put another way, whites accumulate more wealth after natural disasters while residents of color accumulate less,” Elliot explained.

After a natural disaster, FEMA provides grants and low-interest loans to offset the cost of property damage. While it would make sense that federal disaster relief would mitigate racial disparity, Howell and Elliot’s research shows that it actually makes it worse. Counties receiving the most FEMA aid experienced the starkest widening of the racial wealth gap. Black families in counties that received the least FEMA aid accumulated $82,000 more wealth on average than Black families in counties that received the most aid. The researchers tried to explain this puzzling finding:

“Based on previous work on disasters such as hurricanes Katrina and Harvey, we know FEMA aid is not equitably distributed across communities … When certain areas receive more redevelopment aid and those neighborhoods also are primarily white, racial inequality is going to be amplified.”

In other words, one potential explanation for this trend is that white communities within counties receiving federal aid tend to receive more investment for rebuilding after a disaster than non-white communities in the same county. And with climate change increasing the frequency and intensity of natural disasters, this discovery implies worsening racial wealth gaps in the future. However, Howell and Elliot see reason to be hopeful,

“The good news is that if we develop more equitable approaches to disaster recover, we can not only better tackle that problem but also help build a more just and resilient society.”

Most people think of sociology as marriage-neutral, or even anti-marriage because the institution has been linked to patriarchy, heteronormativity, domestic abuse, and a general suppression of women’s rights; however, the field has seen a shift toward a pro-marriage point of view (see, for instance, scholars like Andrew Cherlin). In the Boston Globe, Philip Cohen from University of Maryland College Park says, “Criticism of marriage as a social institution comes from the universal and basically compulsory system of marriage in the 1950s.” Since ‘50s-style marriage is no longer necessarily true, it makes sense to see an evolving scholarly outlook on the issue.

Those who say matrimony matters point to its advantages for low-income children. According to Sarah McLanahan, children with unmarried parents spend less time with their fathers and receive less financial support. Cherlin, for his part, says marriage, more so than cohabitation, contributes to family stability that leads to better child outcomes.

The evidence doesn’t necessarily mean that marriage causes the “good things” attributed to it, either. Yes, unmarried mothers tend to make less money than their married counterparts, but marriage thrives among the more educated. Those with college degrees wait longer to marry and have more resources to give their children. This means the specific people who marry make it look like married people have better outcomes, when usually they were privileged before exchanging vows. Putting a ring on it will not automatically make people healthier, wealthier, or wiser.

This disparity in findings and even recommendations about marriage points to an issue bigger than family values: “This class divide in marriage and family life is both cause and consequence of the growing inequality in American life,” said W. Bradford Wilcox, a sociologist at the University of Virginia and director of the National Marriage Project. Kristi Williams elaborates that economic circumstances can influence marriage, so trying to change marriage without fixing economic disparities is wrong-headed. Philip Cohen agrees, saying, “The idea that the culture is going downhill and we need a cultural revival happens to be very closely related to the idea that we should not address poor peoples’ problems by raising taxes and giving poor people money,” he said. “So there’s a political element” in marriage promotion efforts.

The latest controversy in criminal justice revolves around the defense of 16-year-old Ethan Couch, who killed four people when he hit them with his car, driving at double the speed limit and double the legal blood alcohol level (as an underage drinker, actually, there is no acceptable limit, but let’s stick with the charges). Couch’s defense argued that he suffered from “affluenza”—a condition under which he had lived such a privileged and entitled life, with so few consequences for bad behavior, that he could not now be held suddenly responsible for his actions. Bizarrely, the judge accepted this defense and sentenced Couch to ten years of probation and a stay in a rehab facility known for its hippotherapy (affectionately, if a bit dismissively, known as “having a therapy pony”). Had affluenza not been accepted as a defense, the usual sentence for Couch’s crimes would have been 10-20 years of prison time.

In an article for Forbes, Dr. Dale Archer reminds us that the lack of consequences that accompanies privilege isn’t anything new:

Economist and sociologist Thorstein Veblen introduced the term ‘conspicuous consumption’ in the 19^th century to explain the behavior of […] families who spent their accumulated wealth in ostentatious ways to show off their newfound prestige and power.

Archer goes on to stress that the real worry is how common the modern trend of affluenza seems to be. He worries that the Keeping Up With the Kardashians era may be breeding a generation of narcissists, if not sociopaths who not only don’t understand punishment but also balk at the idea that they have anything to be punished for. He cites social psychologist Sara Konrath of the University of Michigan:

Her study of 13,737 college students found that there was a 40% decrease in empathy currently, when compared with 20 or 30 years ago.

In the end, it may be the application of the cute name “affluenza” that proves most offensive: personal responsibility is all the rage when it comes to the poor and people of color, but wealthy whites’ privilege appears to have found yet another way to keep them above the fray.

See more on “Affluenza” at: https://thesocietypages.org/sociologylens/2013/12/20/catching-affluenza-the-role-of-money-in-criminal-justice/

Much of Switzerland’s wealth is built upon its powerful and secretive financial sector.  While it has long been a safe haven for wealthy individuals seeking to stash their cash, sociologist Jean Ziegler (no relation) argues that it is time for the famously neutral nation to reform its banking sector. In an interview with German newspaper Der Spiegel, he asserts that the country has enriched itself through stolen goods:

Money comes to Switzerland through three illegal sources: tax evasion in other developed countries, the blood money of dictators and other rulers in the Third World and organized crime.

Ziegler, who served on the Swiss National Council for 18 years and also acted as the U.N. Special Rapporteur on the Right to Food for another 8, is lukewarm about the prospects for change. On the one hand, he sees popular pressure from neighboring Germany and data leaks that could reveal the origins of deposits in his country’s banks.  That said, he notes that much inertia must be overcome before real change can happen.

The structure of the Swiss ruling class is rock-hard, and unchanged since the time of Napoleon. They sit on their mountains and lecture the world on democracy.

A social problem examined by sociologists for decades, the white-black wealth gap has widened to record highs during the recession, with the median wealth for white households at twenty times that of their black counterparts. On the Boston Globe’s Brainiac blog, Kevin Hartnett shares a recent study by Princeton sociology graduate student Rourke O’Brien. The study quantitatively tests the idea that this wealth discrepancy is due, in part, to giving or loaning money to relatives.

Middle-income blacks are more than twice as likely as middle-income whites to have a poor sibling and more than four times as likely to have parents below the poverty line. And because of these relationships, they’re called upon more often to provide financial assistance.

Whereas investments can be used to generate more wealth, gifts and informal loans to family members are usually spent  paying bills or covering immediate financial needs. O’Brien argues that informal financial support networks can account for roughly 27% of the white-black wealth gap.