slaves were unlikely to rise very much in the class hierarchy—even over several gen-
erations. Race and class tend to covary—being African American is a good predictor
of a lower-class position than being white.
Yet a few do make it, and at the same time as African Americans are over-
represented among the poor, there is also a growing Black middle class, a class of pro-
fessionals, corporate entrepreneurs, and other white-collar workers. While the
existence of this Black middle class reveals that there is some mobility in American
society, its small size also illustrates the tremendous obstacles facing any minority
member who is attempting to become upwardly mobile.
And, on the other side, there is a significant number of poor Whites in America.
Largely in rural areas, former farmers, migrants, and downsized and laid-off White
workers have also tumbled below the poverty line. In cities like Flint, Michigan, where
a large GM auto manufacturing plant closed, former workers, both White and Black,
were suddenly and dramatically downwardly mobile. Race may be a predictor of
poverty, but poverty surely knows no race.
Globally, poverty is also unequally distributed by race. The economic south, largely
composed of Africans, South Asians, and Latin Americans is the home to more than four-
fifths of all the world’s poor—and a similar percentage of the world’s people of color.
On the other side of the global divide, the predominantly White nations of Europe are
among those with the highest standards of living and the lowest levels of poverty.
Poverty in the United States
and Abroad
In 1964, when President Lyndon Johnson declared “war on poverty” in the United
States as part of his dream of a Great Society, he asked economist Mollie Oshansky
to devise a poverty threshold, a minimum income necessary to not be poor. She
POVERTY IN THE UNITED STATES AND ABROAD 219CEO Compensation
The income gap between rich and poor is evident in
the corporate world. Between 2001 and 2003, corpo-
rate profits increased 87 percent, while workers’
wages and salaries enjoyed only a 4.5 percent cost
of living increase. Average CEO pay today is $10.5 mil-
lion a year, compared with just $28,310 for the av-
erage American worker. In 1970, the average CEO made 28 times
what the average worker earned; today it is 400 times more (up
from 282 times more in 2001).
And the gap is particularly big in the United States
America’s chief executives earn almost twice as much as their
European counterparts (Towers Perrin, 2006).Sociologyand ourWorld
HIGHEST-PAID CEOs in 2004Executive Company Annual Compensation
Terry S. Semel Yahoo! $120,100,000
Lew Frankfort Coach $ 58,700,000
C. John Wilder TXU $ 54,900,000
Ray R. Irani Occidental $ 37,800,000
Petroleum
Paul J. Evanson Allegheny Energy $ 37,500,000
Robert I. Toll Toll Brothers $ 36,400,000
Bruce Karatz K.B. Home $ 34,500,000
James E. Cayne Bear Stearns $ 32,600,000
Edward J. Zander Motorola $ 32,300,000(Source:“A Payday for Performance,” Business Week, April 18, 2005)