Socioeconomic Class in the United States

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Table of Contents

Introduction
Socio-economic Analysis
United States Chamber of Commerce
Role of Large and Small businesses
Conclusion
Works Cited

Introduction

Estimates from the World Bank since the occurrence of global financial and economic crisis in 2007, shows that over thirty million people were rendered unemployed. This was followed by hiking of food prices making the majority of the world population languish in poverty. Decline in aggregate level of demand has had negative influence within the employment field.

Despite the stability exhibited by the growth in GDP, the rate of recovery in level of employment continues to trail by almost seven years. Rural workers are assured of agricultural work which comes on a seasonal basis increasing the level of job uncertainty since most of the people also work under unpredictable highly informal conditions (International Labor Organization).

Public works and employment guarantee schemes concerned with job creation program support government plans on readdressing the need on creation of employment.

United States is considered a land of opportunity; this does not mean that everyone has got equal opportunity. Many people believe that there is nothing unjust concerning the issue on having lots of poor people within a rich country. It might seem bad but at the same time not necessarily unjust to the society.

There is belief that much of the inequality within American society results from ways in which institutions and rules are organized. For example, CEOs in the United States are not in anyway hard working than those in other countries such as Japan, but the difference is that they earn higher salaries owing to the cultural expectations and norms within the American society.

Research reveals that America has for a long time been classified as class unconscious society based on the world standards. Despite being regarded as the land of opportunity the country has never leaved up-to the standards of such billing. Comparative studies on the level of social mobility between the United States and other countries in the west have revealed that social mobility is low in U.S. than other industrialized nations.

The idea of social class has been defined within the confines if rich and poor marked by education and earnings in reference to the poverty line (International Labor Organization).

Socio-economic Analysis

Promotion of economic growth stands as the prerequisite to the elimination of unemployment hence reduction in the level of poverty. Over the last thirty years, America has not been successful in reducing poverty because much focus has been made on economic growth as the only means of reducing poverty levels. However, irrespective of one’s racial or ethnic background, reports reveal that higher percentage of those who are unemployed live in abject poverty hence records worse health compared to the elite group within the society.

The disparity in the level of income is identified as larger than that existing between races (International Labor Organization). The population with income less than $10,000 has disease problems almost three times greater than those earning more than $20000. The low income earners normally called near poor ‘near-poor’ always have high risk of remaining uninsured (28%), since they are considered by the government to be less eligible for Medicaid.

This makes the threshold to remain higher i.e.133% of the poverty level, for the most sensitive within the society being children and pregnant women. The high cost of such benefits makes the poor in the society to have the greatest risk of being uninsured. Statistics reveal that the rate of the uninsured among the nonelderly poor remains higher as the national average (37%-17%).

Amongst the unemployed, only 15% have job-based coverage, with Medicaid covering approximately 41% and this leaves 37% without medical insurance. This is further revealed in the fact that around 15 million women are uninsured; 18% of them without any coverage. This makes most of them vulnerable since they are unable to afford individual policies, at the same time do not qualify for Medicaid and sadly have no access to employer –sponsored plans (Sridhar 36).

United States Chamber of Commerce

The agenda of the U.S. Chamber of commerce could as well be described as ‘pro-business’. Majority of the actors dictating the Americans chamber of commerce is the nation’s largest corporations owned by the Elite group. In the year 2009 alone, single donation of over $ 85 million accounted for over 40% of the total chamber budget.

Out of these sixteen companies owned by the Elite group contributed more than $ 1 million each equivalent to 45% of the total budget. This reveals that the base of the United States Chamber’s funding pool is controlled by the few most powerful CEOs. The United States Chamber of commerce has approximately 300,000 members contributing close to $12 million (U.S. Chamber of Commerce 2-14).

The wealthy in the American society assists in building businesses from the ground up and at the same time support the growth of the existing enterprises and this act as one of the potential means of creating employment. Such operations help in the improvement of quality life within the community as well as creation of attractive business climate.

Based on the role played by job creation and innovative power of entrepreneurs, creation of a conducive environment for many businesses leads to creation of many opportunities (U.S. Chamber of Commerce 2-14).

Social reality and opportunities is further shaped by gender and ethnicity. cutting across different races as well as ethnic groups. Socio-economic stratifications are done based on levels such as education, occupation, income and world view on the various patterns of life. However, social class has been used for the purposes of marking the structure of economic and social opportunities which ultimately affects individual behaviors and associations.

Business cycle within United States can be identified by the level of fluctuations experienced within the past two decades. Calculations on the same are usually based on the values obtained from real domestic products. Business cycles within United States have been determined through various stages of economic growths and economic recess (U.S. Chamber of Commerce 2-14).

High unemployment rates and monetary policies within the United States have resulted into unexpected fluctuations. However, annual fluctuations always determine the nature of business cycle in operation. Economic stability within the country before recession was as a result of greater investment by the Elite group of America.

Role of Large and Small businesses

The Elite group owning large companies such as IBM and Microsoft find it. challenging building successful new businesses for the purpose of creating employment opportunities since they become skeptical concerning the idea of defining their strategic objectives together with boundaries. Such decisions are made because they make it an assumption that their strategies are already known and explicitly defined.

The Elite group together with their business companies has the tendency of delegating objectives as well as boundary definitions to the various newly established business units without considering the context within which corporate companies are governed (Anthony and Johnson 45-47). However, in the process of sharing and delegating their business objectives some risks are involved such as directions undermining corporate goals of the various companies.

At times the big companies find difficulties when it comes to innovation owing to application of appropriate technological principles as well as the commendable influence in controlling and directing employee behaviors. The companies have experienced lots of difficulties in making employees accept and embrace change.

This is because the price required for change to be accomplished seems too high for the parties involved. Inclusive is the incorporation of authority and gender and their contribution towards administering and exercising of power over change (Bates 114-350).

Large companies like IBM have the tendency of defining their boundaries under tight conditions making them sometimes share into their innovator’s uncertainties and dilemma. Such like actions has made the companies loose the principles underlined for business growth which could ultimately lead to empowering transformation within their new businesses.

In America, incidences occur where companies realize that the methods they use for the purposes of resource allocation do not tally with their set strategic objectives. The existence of social stratification sometimes makes it difficult when it comes to appropriate allocation of resources required for innovation and such determines the kind of strategies utilized (Bates 45-47).

Large companies as compared to small businesses undergo deep structural problems which expose them to financial woes. The results on sales, assets and equity dropped drastically twenty years ago, this was because of inability of investment companies to innovate appropriate technologies which could cope with the economic recession at that time (Anthony and Johnson 45-47). During such time various struggle was experienced amongst the autonomous divisions and at the same time high fixed cost were experienced (Anthony and Johnson 46).

Wealthy individuals such as CEOs usually takes the initiative of making company employees develop interest in serving one another with respect and great regard for their needs. There are normally laid down strategies touching on the management and sourcing employees from far including business analysts as well as experts concerned with various sectors of the economy.

This assists in the process of integrating and provision of countries solutions alongside other senior executives. However, each executive is at times involved in the activity of drafting recommendations required by the country for solving employment related problems as well as creating opportunities (Bates 45-47).

Companies like IBM at some point were involved in outsourcing manufacture of some of its products hence making it easier for their employees to progress as a team with shared goals and equal opportunities. Such move gives the country the ability to cut the costs on Information Technology; other approaches used by IBM included reduction in the number of data centers. This helps in centralizing operations hence ensuring that most opportunities are given to Americans and not foreign countries.

Such firms assist in reorganization of employee teams and upgrading them into vertical industry teams involved in special line of duties. This incorporates the setting of productive principles with the capability of being used for governing purposes within business cycles (Bureau of Labor Statistics).

Introduction of downsizing by big companies at some point helped in building bureaucracy since most of business operations were centralized at management level. This saw networks being converted, as well as development of systems taking place hence reducing the level of the countries internal applications. Such moves ensured positive experiences in development of huge profit (Edmiston 74-90).

However, corporate management teams formed by the elite group at times assist in designing the countries business strategies and operations. Such strategies include ideas on the reorganization and equitable distribution of companies’ businesses for the purposes of serving whole population (Edmiston 74-90). The CEOs at the same time contributes in the development of necessary communication networks which simplifies the whole process of linking the country and its business world including the people.

The wealthy class within America has got the responsibility of reengineering projects for the benefit of the whole population. This helps in sustenance of national cost competitiveness by championing for the removal of unprofitable governing structures and processes (Anthony and Johnson 45-47).They at the same time through their companies reversed the use of some technologies such as internet not only to involve browsing and marketing to consumers but also incorporate application of business-to-business and e-commerce within the countries businesses corridors (Bates 45-47).

Most of the economic analysis concerning poverty levels starts with the markets. Labor markets favor those who have market power since they have got necessary tools to eliminate competition from the less powerful sectors. This shows that labor markets controlled by the elite group have got the ability to create employment hence offer a way out of poverty (Bates 45-47).

For innovative processes to succeed owners of big companies utilizes the use of resources of all sorts incorporating capital, customers, suppliers and lucrative business networks. The Elite are more so concerned about treatment of different types of innovation opportunities in different ways hence providing job opportunities. They usually don’t rely on using single set of metrics in running their companies for longer period of time.

Their new inventions are normally taken through iterative development process where various specialists are contacted for the purposes of identifying and addressing possible profitable outcome results. They normally incorporate lots of innovations because of their capability to come up with new ideas unlike the poor within the American society. However, the wealthy within America should appropriately use their positional power as means of exercising command and control over people and the countries economy.

However, the current beliefs within US society demands equality and harmony within the social sector. This calls for the Elite group to be considerate of their demands and principles concerning available resources. There is power struggle within the American society and this has resulted into resistance from the poor and the middle class. This calls for the big companies to consider appropriate application on diversity and conformity (Grant 114-350).

The issue on tax cuts for the wealthy was for the purpose of benefiting the country’s economy as well as extending unemployment benefits. This is because the government realized the fact that the richest Americans as well as corporations help in creating jobs for the citizens. However, the same corporations are currently experiencing higher earnings but not driving the economy as expected.

Research revealed that currently instead of corporation small businesses are the drivers of bigger percentage of the economy while the corporations on the other hand drives the United States chamber of commerce (U.S. Chamber of Commerce 8). The tax cuts benefits the chamber’s CEO’s, for example CEO Tom Donohue earns approximately $ 3.7 million annually. Others like David Kepler and Dow Chemical Company earns over $ 4 million.

The chemical company pumped close to $1.7 million to Chamber in the year 2010, on the other hand the CEO of health insurer WellPoint earned over $13 million during the year 2009 but further gains over $6 million resulting from the tax cuts. The same company gave approximately $ 86 million to the chamber in the year 2009. However, there has been concern whereby the country’s richest members continue to grow richer at the expense of many Americans who are considered victims of “class discrimination” undergoing unfair punishment (U.S. Chamber of Commerce 2-14).

Large businesses owned by the Elite grant employer based health policies to their employees contrary to the small businesses. Statistics in the year 2001 revealed that approximately 31% of employees within the small businesses enjoyed employer based health insurance policies compared to around 70% from those employed in large business enterprises including corporations (Edmiston 74-90).

On the same note workers at large firms are considered likely to benefit from retirement payments, life insurance amongst other benefits. In large firms paid holidays and vacation days range higher based on length of service. This reveals that benefits at large firms owned by the Elite appear more generous compared to small businesses.

Large firms allow for the presence of labor unions which indirectly leads to reduction of turnover through the higher wages paid to the workers (Edmiston 74-90). The large firms at the same time offer on-the –job training and greater progressive opportunities making maintenance of long-term relationship with employees much easier (Edmiston 74-90). The small businesses on the other hand are considered to attract those considered to be unstable workers.

Conclusion

The rate of failure amongst large businesses is low, leading to lower rates of employer-initiated separations (Edmiston 74-90). The loss of jobs from business failures is higher on small business firms than in larger firms. At the same time large firms within U.S are known to pay higher wages compared to small firms.

Example is given in the year 2005 when the average hourly wage within companies having less than 100 workers was $ 15.69 and increased rapidly. For businesses with more than 2000 workers wages increased to approximately $ 27.05 (Bureau of Labor Statistics). The statistics shows that the percentage of workers earning low wages decreased with the increase in the number of large companies.

Positive job attributes leads to employee loyalty and confidence to such an extent that most employees are willing to take low salaries in exchange for health benefits. Size-wage effect is further determined by the average difference in the size of firms across industries. The larger the firms within industries paying better salaries the higher the size-wage effect owing to industry make-up (Edmiston 74-90).

Larger firms usually utilize the use of high-profiled workers because of their ability to pay higher wages owing to their strong capital base (Edmiston 74-90). Large firms as identified earlier offer better jobs, higher wages and better benefits. This makes job turnover to be lower at large firms due to the stability that goes with it.

Works Cited

Anthony, Stephen, and Johnson Sinfield. Institutionalizing Innovation. MIT Sloan Management Review, 2 (2008): 45-47. Print.

Bates, Clark. The Distribution of Wealth. New York: Augustus M. Kelly, 1965. Print.

Bureau of Labor Statistics (BLS). Occupational Employment and Wages 2008. Washington DC; BLS, 2009. Print.

Grant, Rodgers. The resource-based theory of competitive advantage: implications for Strategy formulation. California Management Review, 33 (1991): 114-350. Print.

Edmiston, Kelly. The Role of Small and Large Business in Economic Development. Kansas City; Sage, 2010. Print.

International Labor Organization (ILO). Global Employment Trends. Geneva: Switzerland, 2009. Print.

Sridhar, Devi. Inequality in the United States HealthCare System. Institute of Social and Cultural Anthropology, Oxford, 2005. Print.

U.S. Chamber of Commerce. How the U.S. Chamber of Commerce Top Corporate Funders Dictate the Agenda for Congress. NY: Sage, 2010. Print.

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