Thursday, August 26, 2010

On class structure and income inequality

Lenin's Tomb

In 1979, Erik Olin Wright produced a book on the relation between class and income inequality with the aim of persuading social scientists working in the field of inequality to take marxist ideas seriously. He was, to put it mildly, in the wrong place at the wrong time. But his procedure was to rigorously conceptualise class as an antagonistic relationship centred on exploitation, rather than a system of gradations, or a competitive system based on the technical division of labour, market position, or authority relations.

Having done this, he proceeded to show that with this understanding of class divisions in mind, it was possible to provide a powerful explanatory framework for understanding how income inequalities are perpetuated. I don't know whether much work is really being done on this subject these days, but here's one recent sociological attempt to situation inequalities in terms of production, which should be the basis of further research:

"These growing inequalities are clearly related to changes in employment relations. The work of entrepreneurs, managers and a top elite of professionals and technical experts has been considered increasingly worthy of high economic rewards, while rank and file workers have been subjected to pay restraints and wage cuts. Gosling et al. (1996) report on the widening gap between skilled and unskilled workers, along with increasing disparities within skill categories. Generally the picture is one of polarization between the well qualified and unqualified; between 1997 and 1993, the median wages of those with higher education rose by one third, while for those who left school by sixteen the figure was 10 per cent.

"Throughout the 1980s and 1990s, chief executives and directors received massive pay rises, along with huge bonuses and stakes of shareholdings in their companies; for example, in 1998 Sir Richard Sykes of Glaxo Wellcome had a 53 percent increase to bring his salary to £1.7 million, sir Geoff Mulcahy of Woolworths and B&Q a rise of 39 per cent to reach £1.5 million. In America Rifkin (1995) reports that the 4 per cent of what he terms the ‘knowledge elite’ earn as much as the bottom 51 per cent of wage earners: their gains were made at the expense of the mass of employees, who faced lower pay levels, loss of jobs and declining state benefits: ‘While millions of urban and rural poor languish in poverty, and an increasing number of suburban middle-income wage-earners feel the bite of re-engineering … a small elite of American knowledge workers, entrepreneurs and corporate managers reap the benefits of the new high-tech global economy’ (p. 180). The prosperity of the super-rich is shown in the fact reported by Kirby (1999a) that the ten richest men in the world earn more than the total wealth of the forty-eight poorest countries in the world, whose populations total some 560 million people. The UN estimates that $40 billion would be needed to achieve basic education and health care for everybody in the world, along with adequate food, water supplies and sanitation: $40 billion is less than 4 per cent of the combined wealth of the world’s 225 richest people."

— Harriet Bradley et al, Myths at Work, Polity, 2000, pp. 138-9

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