10.1: Why It Matters- Stratification and Inequality

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Why understand stratification and inequality?

Every society, both past and present, has a system of layering (or stratifying) people within that society. In most societies, there are a few at the top and many at the bottom. You may have heard of wealthy Americans such as Jeff Bezos (Amazon), Bill Gates (Microsoft), or Mark Zuckerberg (Facebook), but there are several other international billionaires who made the Forbes’ top 10 list in 2018, including Mexican billionaire Carlos Slim Helu (American Movil), French billionaire Bernard Arnault (Louis Vuitton and Sephora), and Spanish billionaire Amancio Ortega (Zara).

How many of us can imagine a billion dollars? If one were to make one billion dollars in a year, that would amount to approximately $2,739,726 per day. Figure 1 helps us to “see” 1 billion dollars. Figure 1. One billion dollars. Now imagine Jeff Bezos’ accumulated wealth–112 billion. ([1].It’s quite mind boggling, isn’t it? How much do employees at Bezos’ largest company (Amazon) earn? According to company filings, the median Amazon worker was paid$28,446 in 2017, which is just above the federal poverty level for a family of four, and public records obtained by the New Food Economy show that thousands of Amazon employees rely on Supplemental Nutritional Assistance Program (SNAP) to make ends meet, with as many as 1 in 3 Amazon employees in Arizona receiving food stamps[2]. The “Amazon Effect” has also been credited for the decline of brick-and-mortar stores, which affects small business owners in the United States and abroad. It has created new low wage service positions for people who want to utilize personal shoppers at Whole Foods, which Bezos bought in 2017, and/or utilize Amazon lockers, which are now found in Whole Foods stores across the country.

Another top five billionaire (worth $78.7 billion) is Frenchman Bernard Arnault, who is most famous for his brand Louis Vuitton Moët Hennessy (LVMH). The high fashion items with the signature LV logo cost several thousand dollars, and the cognac brand Hennessy became a pop culture phenomenon with Busta Rhymes and P. Diddy’s 2001 hit “Pass the Courvoisier” (which caused sales of Hennessy to jump 30 percent).[3]. Arnault oversees an empire of 70 brands. According to RankaBrand, a company dedicated to rating the performance of brands on sustainability and social responsibility, Arnault’s company Louis Vuitton gets a “D” score (visit Louis Vuitton’s website to see how these ethical ratings are calculated). Figure 2. Rana Plaza collapse High-end fashion like Louis Vuitton and low-end fashion companies like Walmart have both come under scrutiny for the exploitation of workers in factories around the world. The April 24, 2013 collapse of the Rana Plaza in Dhaka, Bangladesh killed over 1,100 people. It was the deadliest garment factory accident in history, and it was preventable (International Labour Organization, Department of Communication 2014). In addition to the garment factories in the building that employed about 5,000 people, the building contained a bank, apartments, childcare facilities, and a variety of shops. Many of these closed the day before the collapse when cracks were discovered in the building walls. When some of the garment workers refused to enter the building, they were threatened with the loss of a month’s pay. Most were young women, aged twenty or younger. They typically worked over thirteen hours a day, with two days off each month. For this work, they took home between twelve and twenty-two cents an hour, or$10.56 to $12.48 a week. Without that pay, most would have been unable to feed their children. In contrast, the U.S. federal minimum wage is$7.25 an hour, and workers receive wages at time-and-a-half rates for work in excess of forty hours a week (though some employers of “temp” contract workers, seasonal employees, and persons employed in certain fields are by law exempted from the overtime pay requirement).

Bangladesh has a $28 billion dollar garment industry, second only to China. Efforts to increase openness and accountability through measures like the Transparency Pledge have only been adopted by 17 out of 72 clothing and shoe manufacturers in the wake of the Rana Plaza tragedy[4] Did you buy clothes from Walmart in 2012? What about at The Children’s Place? Did you ever think about where those clothes came from? Of the outsourced garments made in the garment factories, thirty-two were intended for U.S., Canadian, and European stores. In the aftermath of the collapse, it was revealed that Walmart jeans were made in the Ether Tex garment factory on the fifth floor of the Rana Plaza building, while 120,000 pounds of clothing for The Children’s Place were produced in the New Wave Style Factory, also located in the building. Afterward, Walmart and The Children’s Place pledged$1 million and \$450,000, respectively, to the Rana Plaza Trust Fund, but fifteen other companies with clothing made in the building have contributed nothing, including U.S. companies Cato and J.C. Penney (Institute for Global Labour and Human Rights 2014). Walmart has refused to sign the Transparency Pledge, maintaining that it has its own mechanisms in place for worker safety.

By looking at the interconnectedness of billionaires and their employees, or between owner-shareholders and workers, we can begin to uncover some of the key sociological issues related to stratification in societies all over the world. In an increasingly global market, we can see how the decisions of the 1% can impact tens of thousands of peoples’ social stratification. We can also see how consumers like ourselves contribute to stratification by purchasing goods and services through politically and economically powerful multinational corporations.