Socioeconomic Status

Socioeconomic status (SES) typically refers to a person’s position and esteem in society based on economic and other resources. The most commonly cited indicators of SES are income, occupation, and education. In social science research, SES is often used interchangeably with the term social class. However, some would argue that these are different terms and that social class is determined both by the quantifiable amount of resources someone has and their relative standing in relation to others. For example, the terms lower class, middle class, and upper class can be thought of as income demarcations and are often used as such in census data, but others look at these terms as descriptors of job prestige (e.g., both a college professor and a lawyer may fit into the “upper class” category though their incomes differ greatly). N. Krieger, D. R. Williams, and N. E. Moss, in their paper on measuring social class in public health research, stated that “socioeconomic position” consists of both actual resources and status (i.e., qualities related to prestige and rank). The confounding between the terms SES and social class reflects the lack of clarity of these concepts in society due to the “myth of the classless society,” which is the idea that ability and effort alone are responsible for one’s class standing. Oppression by those with material and power and privilege also contributes to the confusion of these terms. This entry focuses on SES but integrates social class concepts as they are relevant to counseling psychology.

Socioeconomic Status Indicators and Disparities

Income and Wealth

Income is defined as money received (e.g., from wages, interest, child support, Temporary Assistance to Needy Families), whereas wealth consists of assets accumulated. Another way to define wealth is net worth, or assets (e.g., home ownership, stocks, cars, leftover income after expenses) minus debts. Typically, when talking about SES in the United States, the media focus on income. However, wealth statistics paint a more accurate picture of SES and inequality. In addition, income cutoffs for federal programs such as food stamps do not accurately portray the amount of money actually needed for U.S. families to meet basic needs.

According to the U.S. Census Bureau, the median income of families in the United States in 2004 was $44,389. There are significant income disparities based on race. In 2004, the median household income was $48,977 for non-Hispanic Whites, $30,134 for Blacks, $57,518 for Asians, and $34,241 for Hispanics. These figures are estimates and often omit working undocumented immigrants and intergroup differences, such as the status of Southeast Asian refugees.

There are also disparities in income between men and women. The median income for men with earnings in 2004 was $40,798, and for women with earnings it was $31,223. According to this estimate, women are making almost 77 cents on the dollar compared with men. Other estimates claim that the pay gap is decreasing, and women are making about 80 cents for every dollar of men’s earnings. However, part of this narrowing is due to the fall of wages for working-class men rather than increases in wages for women.

In 2004, 12.7% of the U.S. population lived below the poverty line. That year, the Department of Health and Human Services defined the poverty threshold as an income of $18,850 for a family of four. However, many economists and social scientists question the formula used to calculate this figure. The threshold is calculated using a formula that was developed in the 1960s, based on the cost of food for a family multiplied by three. This formula fails to incorporate rising housing and healthcare costs, not to mention the need for child care in most American families. Several economists have proposed new formulas for calculating the income that families need to meet their basic needs, and the results of these formulas suggest that families in the United States need an average of 2 times the federal poverty threshold to simply survive. In some regions of the country, the difference is even greater.

Continuing to use the Department of Health and Human Services definition of poverty, glaring differences based on race are apparent. The poverty rate (percentage of the population living under the federal poverty threshold) in 2004 was 8.6% for non-Hispanic Whites, 24.7% for Blacks, 9.8% for Asians, and 21.9% for Hispanics. Two-year average poverty rates (2003-2004) were calculated for American Indians/Alaska Natives and Native Hawaiian/Pacific Islanders, respectively: 24.4% and 12.9%. There are also disparities based on citizenship status. The poverty rate for U.S.-born citizens was 12.1%, compared with 9.8% for foreign-born naturalized citizens and 21.6% for noncitizens. Female-headed households are much more likely to experience poverty. The poverty rate for female households with no husband present was 28.4%. For male households with no wife present it was 13.5%, and for married couple households it was 5.5%.

Wealth disparities are even more staggering. The median net worth (i.e., assets minus debts) for White households in 2001 was $121,000. For Black households, the median was $19,000, and for Latino/a households the median was $11,500. Even as the gap in income between races decreases very slowly, wealth disparities have stayed the same or increased.

Some economists and social scientists, such as Chuck Collins and Felice Yeskel, the authors of Economic Apartheid in America with United for a Fair Economy and Class Action, argue that inequality is a critical social problem even if the standard of living has improved for Americans overall. They discuss inequality between racial and ethnic groups, men and women, and wealthy and poor (and, increasingly, between wealthy and middle-income people). Salaries of chief executive officers (CEOs) and other executives have increased exponentially, while workers’ wages are stagnant or even decreasing. In addition, CEOs’ salaries are positively correlated with downsizing, so as more and more working and middle-income people lose their jobs, the wealth of executives increases. In 2003, the average CEO made as much money as 301 workers. According to the U.S. Census Bureau in 2004, income for families in the top 5% of the population grew by 75% between 1979 and 2003, and for those in the middle 20%, income grew by only 15% during the same period. In 2001, 10% of the population owned 70% of all wealth, and 90% of the population owned 30% of all wealth. Collins and Yeskel reviewed several studies regarding inequality and public health and found that the regional gap between the rich and the poor predicts health better than poverty rates do. In the United States in particular, most working people are working longer hours and earning less; struggling to afford health insurance, higher education, and retirement; going into more debt to pay for everyday expenses; saving less; and working more temporary jobs with no security or benefits.

Occupation

Occupation is another indicator of SES used in social science research. Some researchers simply distinguish between the employed and unemployed, and others use various job categorization schemes. Nancy Lynn Baker noted that the current terms for distinguishing between social classes (e.g., working class, professional class) are simply job descriptions and do not capture important distinctions between occupations, such as personal control and level of danger.

Occupations are sometimes grouped by income, but most schemes rely on categories based on prestige, skill, or education required. The U.S. Census groups occupations into 23 major groups, some of which are management; legal; education, training, and library; protective services; building and grounds; cleaning and maintenance; sales and related; office and administrative support; construction and extraction; and transportation and material moving. According to the U.S. Department of Labor, in May 2005, the occupational group with the highest mean annual wage was management ($88,450), and the occupational group with the lowest mean annual wage was food preparation and serving ($17,840). However, understanding SES by these categories is not particularly meaningful, as management occupations include, for example, CEOs and social and community service managers, and food preparation and service-related occupations include both chefs and dishwashers. In both cases, these occupations differ greatly in terms of income, education required, prestige, and personal control over one’s workday. Prestige and power are associated with such categories, as captured by the Occupation Score of the Hollingshead Index of Social Position. The original Hollingshead Two-Factor Index grouped occupations from highest prestige (which could be called business management and professionals) to lowest prestige (unskilled employees). Industrialized nations seem to have similar conceptions of occupational prestige. Michael Argyle reviewed studies of occupational prestige across various countries and found that professionals are usually held in highest esteem, whereas unskilled service workers, farmers, and farm laborers are usually regarded in lowest esteem.

In his book The Working Class Majority: America’s Best Kept Secret, economist Michael Zweig defined social class in terms of the power workers have in different occupations. He discussed three types of power important in determining one’s social class: economic power (based on earnings and wealth, and power over the means of production, including other workers), political power (the power to influence policy), and cultural power (power over the processing of information, such as the media and education). Though someone could have one type of power and not another, all three types generally reinforce one another. He divided occupations into three major classes based on the amount of power each class has: the capitalist class (which includes the ruling class), the middle class, and the working class.

The capitalist class consists of business owners, particularly owners of corporations or “big businesses.” Many small business owners fit into Zweig’s definition of the middle class. The distinction is that members of the capitalist class do not come into much contact with workers or the process of production, though they have great control over the workforce through middle management. The ruling class consists of a small percentage of the capitalist class who serve on the boards of several corporations, affording them access to political and cultural leaders. Zweig defines the middle class as small business owners; supervisors and managers; and professionals, such as doctors, professors, and computer programmers. He described the middle class as caught between the competing interests of the working and capitalist classes: On the one hand, they have an interest in maintaining their privileges by limiting the power of working-class people, but on the other, they are losing control over their jobs (e.g., designing curricula, HMO policies) to the capitalist class. The working class is the largest class according to Zweig’s analysis (about 60% of the U.S. workforce) and is quite diverse. Working-class people are those with the least amount of power and control in their occupations. In the U.S. Census categories, they are typically found in sales, administrative support services, production, and technical occupations. Zweig estimates that 75% of the unemployed are working-class people actively looking for jobs.

Education

Education is often used as a descriptive indicator of SES, distinguishing between those who have not completed high school, those who have completed high school or have obtained a general equivalency diploma, those who have 2-year or vocational degrees, and so on. Education is considered a major vehicle of upward social mobility, as higher education is tied to occupations with higher incomes and prestige. However, the education and income of one’s family of origin are highly predictive of future educational opportunities. Income, occupation, and education appear to be intertwined and mutually reinforcing. In the United States in 2003, the median annual income for non-high school graduates was $15,610. This figure was $30,936 for those with associate degrees, $40,588 for those with bachelor’s degrees, $51,116 for those with master’s degrees, $70,985 for those with doctorate degrees, and $81,833 for those with professional degrees.

In the United States, there are stark racial/ethnic disparities in education. According to the U.S. Census Bureau in 2004, 89.2% of non-Hispanic Whites ages 18 and older had a high school diploma or more, compared with 79.5% of Blacks, 86.8% of Asians, and 58.9% of Hispanics. More striking disparities are found in higher education. Twenty-eight percent (28.2%) of non-Hispanic Whites age 18 and older had a bachelor’s degree or higher, compared with 15.6% of Blacks, 45.6% of Asians, and only 10.3% of Hispanics. Note that data were not available for American Indians, Alaska Natives, or Native Hawaiians and other Pacific Islanders, who typically fare worse than other groups on SES indicators.

Classification Schemes Based on Prestige

Two of the most popular classification schemes for SES are August B. Hollingshead’s Index of Social Status and Otis Dudley Duncan’s Socioeconomic Index. Both of these methods rank occupational categories based on prestige. These methods are based on census data from 1970 and 1950, respectively, and are thus outdated. The Hollingshead Index combines education, occupation, gender, and marital status into one social status score. The Duncan Socioeconomic Index classifies occupational prestige based on the income of, and education required for, the occupation. Another classification method is the Nam-Powers Socioeconomic Status Score, which uses a definition of occupational status based on median income and education of those employed in that occupation, combined with educational level and family income. Problems with these measures include few studies on validity and reliability, the combination of highly intercorrelated SES indicators into one measure, and equating socioeconomic resources with prestige.

Socioeconomic Status and Health

Socioeconomic Status and Physical Health

There is a clear relationship between SES and health, as indicated by studies that have found evidence of a gradient where low SES is correlated with most (but not all) diseases, and the likelihood of contracting or experiencing disease decreases as SES increases. Relationships between various socioeconomic indicators and physical diseases have been found, including cardiovascular disease, hypertension, and certain types of cancer. Level of education alone has been cited as a predictor of mortality and morbidity in the United States and other countries.

SES is highly correlated with physical health for various reasons. Access to health care, safe workplace conditions, and supportive social networks contribute to the health of those with higher SES. In addition, lower SES is associated with a greater likelihood to engage in risky behaviors, such as smoking and alcohol consumption. Individuals coping with the stress of a low SES environment are also less likely to engage in healthy behaviors such as exercise. The physical environment of low SES neighborhoods can also directly impact health. Impoverished neighborhoods are often exposed to pathogens, carcinogens, and environmental hazards. People in poor communities are also more likely to be exposed to, or experience, violence and may have less social support than people living in higher SES communities.

Nancy E. Adler, Elissa S. Epel, Grace Castellazzo, and Jeannette R. Ickovics conducted a study in which they found strong correlations between subjective SES and health, by asking 157 healthy White women to rank their social status on a 10-rung ladder. Significant negative correlations were found between subjective SES indicators of poor health (e.g., body mass index). The researchers also measured psychological health and found significant negative correlations between subjective SES and negative affectivity, chronic stress, subjective stress, pessimism, and passive coping. Significant positive correlations were found between subjective SES and control over life and active coping. This is one of several studies demonstrating relationships between SES and both physical and mental health.

 Socioeconomic Status and Mental Health

People living in low SES communities face multiple stressors and often do not have the material or social resources to cope with the resulting stress. Aside from severe financial crises that poor families face (hunger, threats of eviction, etc.), they face more hassles in their daily living than do families in higher SES communities. Those of higher SES have more access to high-quality housing, shops, banks, health care, and transportation. These resources alone can be buffers against stress.

Citing national epidemiological studies, Yan Yu and David R. Williams stated that in 1994, individuals who did not complete high school were almost two times more likely to be diagnosed with a major affective disorder than individuals who had a college education or more. In addition, people of low SES were almost 2 times more likely to suffer from a substance abuse disorder than people in the highest SES group. Though these disparities may be the result of the stressors described above, it is possible that classism, racism, and other forms of oppression affect rates of diagnosis in people of low SES. Considering the SES disparities between races in the United States, it is clear that racial/ethnic minorities are more likely to be diagnosed with a psychiatric illness than are White individuals.

Depression has been linked consistently with poverty in adults and children. According to Deborah Belle and Joanne Doucet, adults in poverty are at double the risk for experiencing a new episode of major depression than are other adults. This compounds children’s risk for depression and other mental health problems. Poor household economic conditions increase the risk for childhood depression and the poor physical health correlates of depression. Other risk factors for childhood depression that are linked to SES are living in a single-parent home, parental unemployment, and low educational attainment by parents. A recent meta-analysis by Vincent Lorant and colleagues concluded that there is a moderate to strong relationship between SES and depression, and this is especially true for persistent depression.

Socioeconomic Status and Counseling

Classism and Counseling Psychology

Bernice Lott and Laura Smith have called attention to the classism that exists in psychological research and practice. Classism, like other forms of oppression, results from those with unearned class privilege exerting their power over others. Lott discussed notions of class superiority and inferiority that result in psychologists and others distancing themselves from poor people through cognitive means such as stereotyping; exclusion of low SES individuals from institutions such as education, housing, and politics; and interpersonal means such as blatant discrimination and invalidation.

Smith traced the history of psychotherapy’s treatment of the poor, including the political backlash against community mental health centers and therapists’ expectations of clients based on White middle-class norms. Current therapeutic models are most likely not addressing the needs of those from lower SES groups, as evidenced by higher treatment dropout rates. An example of an attitudinal barrier is counselors seeing their interventions as less significant because poor clients are facing multiple stressors. As the multicultural counseling competencies have helped to address counselors’ attitudes regarding race and ethnicity, identification of attitudinal barriers to working with low SES clients will begin to increase counselors’ competence to work across socioeconomic groups.

The Social Class Worldview Model

William M. Liu developed the Social Class Worldview Model (SCWM) to address the definitional problems surrounding class and SES and to analyze the complexity of within-group differences (i.e., not all people within a certain class or SES are assumed to share the same characteristics). This model specifically addresses the subjective experience of SES most often known as social class. This has important implications for counseling, as clients’ and counselors’ perceptions of both their own and the others’ SES impact the counseling relationship and process.

Liu chose a worldview model because the underlying construct he is describing reflects people’s subjective experience of belonging to a specific group. The subjective context of the SCWM is one’s perceived class and status position. This influences saliency, consciousness, and attitudes toward social class issues, which interact with referent groups, material objects, lifestyle, and behaviors. Though all aspects of the SCWM influence one another, saliency, consciousness, and attitudes are placed at the center of the model. Perceived class and status position is a person’s answer to the question, “What is your social class background?” Saliency indicates a level of awareness of an SES system in which there are differential opportunities for people in different classes. Consciousness refers to the level of awareness an individual has about belonging to, and being influenced by, a social class system. Attitudes refer to feelings, beliefs, attributions, and values about social class. Social class attitudes are shaped by one’s early socialization experiences.

Referent groups are groups that inform one’s socialization experiences. They influence the development of the SCWM and one’s behaviors. The three referent groups that Liu names are the group of origination (e.g., caretakers, relatives, early peers), cohort group (those with whom one spends the most time and are most similar to him or her in their own worldview and behavior), and group of aspiration (the group that one would like to belong to). Material objects, lifestyle, and behavior can be considered “performance” variables, as they are the visible indicators of class and status. Liu discussed the objective SES measures of income, occupation, and education as limits on one’s SCWM. One’s class aspirations may not match one’s resources.

Because of the paucity of research on the subjective experience of social class, this is a preliminary model that has not been validated. The SCWM places a person’s subjective interpretations of social class in ecological context by considering cultural values, social comparison groups, and other important systemic variables. It is a promising paradigm for understanding how people make sense of social class.

Lott, Smith, and Liu each have made significant contributions to the understanding of the relevance of SES to counseling. In U.S. society, the ideology of the “American dream” reinforces a cultural myth that there is no class stratification and that anyone can climb the social class ladder with effort. An understanding of class-based oppression is crucial for counselors who may be working with individuals from different SES groups. More often than not, counselors hold a relatively high SES in U.S. society because of their education and occupational prestige. It is crucial for counselors to examine their SES and social class biases, in addition to examining biases based on race, gender, and other social identities. Liu’s model offers a helpful framework for counselors to ask themselves questions about their SES-related beliefs, attitudes, and behaviors. It also provides a model for understanding how social class may be related to clients’ presenting concerns. Because social class and SES are complex and often misunderstood constructs, models such as the SCWM can provide structure to the exam-ination of these issues.

Future Directions

SES and social class are inadequately defined in social science research, including counseling research. Socioeconomic indicators such as income, wealth, occupation and occupational prestige, and education have clear implications for health and mental health and will benefit from further research. In addition, counseling psychologists have begun to address the subjective meaning of social class and how it plays out in their lives, including in counseling relationships. An important aspect of this research will focus on understanding discrimination and oppression based on SES and how it affects the work of counselors and psychologists.

References:

  1. Adler, N. E., Boyce, T., Chesney, M. A., Cohen, S., Folkman, S., Kahn, R. L., et al. (1994). Socioeconomic status and health: The challenge of the gradient. American Psychologist, 49, 15-24.
  2. Adler, N. E., Epel, E. S., Castellazzo, G., & Ickovics, J. R. (2000) . Relationship of subjective and objective social status with psychological and physiological functioning: Preliminary data in healthy White women. Health Psychology, 19, 586-592.
  3. Argyle, M. (1994). The psychology of social class. London: Routledge.
  4. Baker, N. L. (1996). Class as a construct in a “classless” society. In M. Hill & E. D. Rothblum (Eds.), Classism and feminist therapy: Counting costs (pp. 13-23). New York: Haworth.
  5. Belle, D., & Doucet, J. (2003). Poverty, inequality, and discrimination as sources of depression among U.S. women. Psychology of Women Quarterly, 27, 101-113.
  6. Boushey, H., Brocht, C., Gundersen, B., & Bernstein, J. (2001) . Hardships in America: The real story of working class families. Washington, DC: Economic Policy Institute.
  7. Collins, C., & Yeskel, F., with United for a Fair Economy and Class Action. (2005). Economic apartheid in America: A primer on economic inequality & insecurity. New York: New Press.
  8. Krieger, N., Williams, D. R., & Moss, N. E. (1997). Measuring social class in U.S. public health research: Concepts, methodologies, and guidelines. Annual Review of Public Health, 18, 341-378.
  9. Liu, W. M. (2001). Expanding our understanding of multiculturalism: Developing a social class worldview model. In D. B. Pope-Davis & H. L. K. Coleman (Eds.), The intersection of race, class, and gender in multicultural counseling (pp. 127-170). Thousand Oaks, CA: Sage.
  10. Liu, W. M., Ali, S. R., Soleck, G., Hopps, J., Dunston, K., & Pickett, T., Jr. (2004). Using social class in counseling psychology research. Journal of Counseling Psychology, 51, 3-18.
  11. Lott, B. (2002). Cognitive and behavioral distancing from the poor. American Psychologist, 57, 100-110.
  12. Smith, L. (2005). Psychotherapy, classism, and the poor: Conspicuous by their absence. American Psychologist, 60, 687-696.
  13. Taylor, S. E., Repetti, R. L., & Seeman, T. (1999). What is an unhealthy environment and how does it get under the skin? In I. Kawachi, B. P. Kennedy, & R. G. Wilkinson (Eds.), The society and population health reader: Vol. 1. Income inequality and health (pp. 351-378). New York: New Press.
  14. Yu, Y., & Williams, D. R. (1999). Socioeconomic status and mental health. In C. S. Aneshensel & J. C. Phelan (Eds.), Handbook of the sociology of mental health (pp. 151-166). New York: Kluwer Academic/Plenum.
  15. Zweig, M. (2000). The working class majority: America’s best kept secret. Ithaca, NY: ILR Press.

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