What Is Structural Inequality? (2022)

How Structural Inequality Stifles the American Dream

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Kimberly Amadeo is an expert on U.S. and world economies and investing, with over 20 years of experience in economic analysis and business strategy. She is the President of the economic website World Money Watch. As a writer for The Balance, Kimberly provides insight on the state of the present-day economy, as well as past events that have had a lasting impact.

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Updated March 26, 2022

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Erika Rasure

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Erika Rasure, is the Founder of Crypto Goddess, the first learning community curated for women to learn how to invest their money—and themselves—in crypto, blockchain, and the future of finance and digital assets. She is a financial therapist and is globally-recognized as a leading personal finance and cryptocurrency subject matter expert and educator.

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Structural inequality is a system of privilege created by institutions within an economy. These institutions include the law, business practices, and government policies. They also include education, health care, and the media. They are powerful socializing agents that tell us what we can achieve within society.

Inequality is structural when policies keep some groups of people from obtaining the resources to better their lives. They do not have a chance to pursue their idea of happiness. Structural inequality clouds this vision and limits economic growth for the whole society.

What Is Structural Inequality?

Structural inequality differs from individual forms of inequality. That's where racism and sexism are exhibited by individual behavior. Many people think that all inequality is due to personal biases that can be overcome individually. They believe that inequality would disappear if people "just stood up for themselves," or if others stopped oppressing them.

Structural inequality occurs even in a free market economy because of the laws and policies that form it. Those laws regulate government contracts, bankruptcy, and property ownership. They create advantages for some and disadvantages for others. When the laws work against specific groups, inequality becomes part of the structure of the market.

How Structural Inequality Impacts Income

Structural inequality seems to be worsening. Between 1979 and 2007, after-tax income increased by 275% for the most affluent 1% of households. It rose by 65% for the top fifth. For the bottom fifth, it only increased by 18%, even adding all income from Social Security, welfare, and other government payments.

(Video) Shaeera Kalla - Structural Inequalities

During that time, the most affluent 1% increased their share of total income by 10%. Everyone else saw their share shrink by 1% to 2%. As a result, economic mobility worsened.

The 2008 financial crisis saw the rich get richer. In 2012, the top 10% of earners took home 50% of all income. That's the highest percentage in the last 100 years, according to a study by economists Emmanuel Saez and Thomas Piketty.

The chart below illustrates the discrepancies in household incomes by percentile from 1963 through 2019.

Types of Structural Inequality

There are six major forms of structural inequality:

1. Education

Students in low-income neighborhoods often receive an education that is inferior to that of students in wealthier areas. Research has found that this accounts for 37% of the reason for lower math scores.

Within schools, "tracking" guides students toward different careers. Many claim that this guides girls, women, and those in under-represented groups toward less lucrative jobs. Others argue that tracking is needed to give gifted children the best preparation to excel.

Structural inequality exists where poor children must attend public schools while rich children can attend private schools. Before the 1950s, school segregation was allowed by federal law. During that time, many girls were guided toward home economics rather than math, for example.

2. Housing

Municipal leaders can create systemic segregation through zoning. They zone for amenities like green space and large lots in wealthy White areas. They then allow apartment complexes and halfway houses in lower-income areas. Over time, these decisions create neighborhoods on the "wrong side of the tracks."

Under theNew Deal, the Federal Housing Administration created loan programs to allow more Americans to buy homes. But the government redlined areas populated by communities of color. It allowed banks to avoid lending in entire neighborhoods. From 1934 to 1962,98% of home loans went toWhite families.

Between 2004 and 2009,Wells Fargo steered30,000 Black and Latinx borrowers into subprime mortgages. It gave prime loans to White borrowers with similar credit profiles. Wells Fargo was ordered to compensate the marginalized borrowers for the extra costs incurred by higher interest rates and fees.

3. Health Care

Healthcare inequality is correlated withincome inequality.Those with good jobs have the best access to health care. America has a healthcare system that relies on private health insurance.

Leading up to the launch of the Affordable Care Act, almost 44 million Americans lacked health insurance. By 2017, that number dropped to about 27 million. And while the numbers have declined, there are still millions of people without health insurance.

4. Race

Racial structural inequality has its roots in U.S. slavery. That system legally allowed Black Americans to be treated as non-human property. Even though slavery was outlawed in 1865,Jim Crow laws enforced segregation in the South until 1964.

The racial housing gap still exists. Data from the 2010 Census confirmed that the racial disparity in neighborhoods persists. A 2010 study found that non-White families with incomes above $75,000 are more likely to live in poor communities than White families with incomes below $40,000. Poor neighborhoods are less safe, and the schools are of a lower quality than those in affluent areas.

(Video) Ideologies of Inequality: Toward a Structural View

As a result, Black people in upper-income families are more likely to lose their status than White people. White children whose parents are in the top fifth of the income distribution have a 41.1% chance of staying there as adults, but for Black children, it's only 18%.

5. Gender

Research shows that there are many structural gender biases in the workplace. For example, studies have found that managers give women fewer challenging roles and less training compared with men. Female managers aren't given as many high-level responsibilities needed for promotions. Men are more likely to be given leadership roles in both male-dominated fieldsand female-dominated fields.

6. Media

InCitizens United v. FEC, the U.S. Supreme Court gave corporations the same rights as people. It protected corporate campaign contributions as a form of free speech. This decision allowed wealthy business owners greater access than poorer individuals to political advertising.

How Structural Inequality Affects You

If you are in an under-represented group or a woman, you already know how structural inequality affects you. As part of an under-represented group, you may have been guided to certain neighborhoods by your bank.

As a woman, you may have found out that your male coworkers had higher salaries doing the same jobs as you, even though you had more experience. Or maybe you were denied a promotion or job opportunity because the hiring manager believed that women aren't good at that job.

Even if you haven't experienced structural inequality personally, you have been adversely affected.

If you were part of a company that was not diverse, it may have been less profitable. This is because diversity drives profitability in three ways:

  • A diverse workforce builds trust in your brand with a diverse target market.
  • Valuing diversitycuts costs by reducing turnover. Itgives the company the freedom to go after the most talented people, regardless of differences.
  • A diverse product-development team can create new products that accurately target niche markets.

Diversity is an often-overlooked reason for Silicon Valley's success. The Valley attracts top engineers from around the world. Between 1995 and 2005, 43.9% of Silicon Valley startups reported that at least one of their key founders was foreign-born.

The United States' ranking in education is falling. For example, U.S. students'math skillshave remained stagnant since at least the early 2000s. They are falling behind those of many other countries, such as Japan, Poland, and Ireland, which have greatly improved. U.S. test scores arenow below the global average.That hurts America'scomparative advantagein the global marketplace and lowers economic output.

The Alliance for Excellent Education estimates that the U.S. economy loses $329 billion per year as a result of the lost annual income of the 1.2 million high-school students who drop out without receiving a diploma.

What Can We Do About Structural Inequality?

The solution to structural inequality must address the structure that created it. For example, it's not enough to help an individual move from one town to another. The zoning that created both communities must be changed. Both towns must be zoned for large land lots and apartment complexes as well as green spaces and halfway houses.

The Community Reinvestment Act didn't do that. As a result, it was just a half-measure. The law helped deserving people buy homes in redlined neighborhoods, but it didn't address the zoning that had created those neighborhoods.

If society has the resources, it could also include universal health care and equity in education. This investment in human capital would bring everyoneup to a basic standard. It may be better than increasing welfare benefits, providing a universal basic income, or raising theminimum wage. Studies show that citiesthat have done sohave reduced poverty and reliance on welfare.

Frequently Asked Questions (FAQs)

What is an example of structural inequality?

Examples of structural inequality would include disparities in how people of different races are portrayed in movies. When movies repeatedly portray people of color as criminals, that is an example of structural inequality.

(Video) The 2022 Breonna Taylor Lecture on Structural Inequality

How is structural inequality different from systematic inequality?

Systemic inequality refers to a system that has perpetuated inequalities. These systems are established with inequalities embedded in the principles or practices, so people acting within the system may perpetuate inequalities unintentionally.

FAQs

What is meant by structural inequalities? ›

What is structural inequality? Structural inequality refers to a system where prevailing social institutions offer an unfair or prejudicial distinction between different segments of the population in a specific society.

What are the 3 different types of inequality? ›

There are three main types of economic inequality:
  • Income Inequality. Income inequality is the extent to which income is distributed unevenly in a group of people. Income. ...
  • Pay Inequality. A person's pay is different to their income. Pay refers to payment from employment only. ...
  • Wealth Inequality.

What causes or produces structural inequalities in the society? ›

Inequalities occur because of an imbalance in the distribution of political and economic power. While one group has historically set the rules and writes the law of the land, access of others to wealth and resources have been limited.

What is structural inequality in education? ›

Structural inequality occurs when the fabric of organizations, institutions, governments or social networks contains an embedded bias which provides advantages for some members and marginalizes or produces disadvantages for other members.

What are 3 examples of inequality in society today? ›

The major examples of social inequality include income gap, gender inequality, health care, and social class.

What are structural problems in society? ›

Structural inequality occurs when the fabric of organizations, institutions, governments or social networks contains an embedded bias which provides advantages for some members and marginalizes or produces disadvantages for other members.

What is structural disadvantage and inequality? ›

Structural disadvantage- refers to the disadvantage experienced by some individuals or families or groups or communities as a result of the way society functions (how resources are distributed, how people relate to each other, who has power, how institutions are organised).

What term refers to structured social inequality? ›

Social Stratification. The existence of structured inequalities between groups in society in terms of their access to material or symbolic rewards.

What are the 4 types of inequalities? ›

When we look at inequalities, we are looking at two expressions that are “inequal” or unequal to each other, as the name suggests. This means that one equation will be larger than the other. The four basic inequalities are: less than, greater than, less than or equal to, and greater than or equal to.

What are 5 types of inequalities? ›

Five types of inequality
  • political inequality;
  • differing life outcomes;
  • inequality of opportunity;
  • treatment and responsibility;
  • shared equality of membership in the areas of nation, faith and family.
Dec 10, 2008

What are structural barriers in society? ›

Structural barriers are obstacles that collectively affect a group disproportionately and perpetuate or maintain stark disparities in outcomes. Structural barriers can be policies, practices, and other norms that favor an advantaged group while systematically disadvantaging a marginalized group.

What are the main causes of social inequality? ›

The causes of social inequality include society's acceptance of roles, stereotyping, social organization by class (or class systems) and economic disparity, as well as legislation and political inequality.

What are structural factors in education? ›

Structural factors are defined as environmental and material resources that can guide a student's behavior” (Stephens, Brannon, Markus, & Nelson 2015).

What is an example of a structural inequality that leads to poverty in the United States? ›

What is an example of a structural inequality that leads to poverty in the United States? Answer: The absence of well-paying jobs in racially or ethnically segregated neighborhoods. Structural inequality is a type of inequality that is systemically rooted in the operations of dominant social institutions.

Which of the following describes structural inequalities quizlet? ›

Structural inequality refers to the systematic differences in "wealth, material possessions, power and authority, prestige, and access to education, health care, and simple creature comforts" that certain groups of people experience more than others (pg.

What term refers to structured social inequality? ›

Social Stratification. The existence of structured inequalities between groups in society in terms of their access to material or symbolic rewards.

What is structural disadvantage and inequality? ›

Structural disadvantage- refers to the disadvantage experienced by some individuals or families or groups or communities as a result of the way society functions (how resources are distributed, how people relate to each other, who has power, how institutions are organised).

Which of the following describes structural inequalities quizlet? ›

Structural inequality refers to the systematic differences in "wealth, material possessions, power and authority, prestige, and access to education, health care, and simple creature comforts" that certain groups of people experience more than others (pg.

What does structural problem mean? ›

What is considered a structural problem? Simply put, structural problems can be anything that affects the structural reliability of your house. They can be caused by anything from a poor design or build, to structural faults developed since your house was built.

Are the structured inequalities among individuals or groups in society? ›

Social stratification is a system of ranking individuals and groups within societies. It refers to a society's ranking of its people into socioeconomic tiers based on factors like wealth, income, race, education, and power. You may remember the word “stratification” from geology class.

What are the main causes of social inequality? ›

The causes of social inequality include society's acceptance of roles, stereotyping, social organization by class (or class systems) and economic disparity, as well as legislation and political inequality.

What is the meaning of social inequality? ›

Social inequality is the condition of unequal access to the benefits of belonging to any society. In a purely equal society, every citizen is equally able to contribute to the overall wellbeing of that society, and they are equally able to benefit from their membership within that society.

Videos

1. Structural Inequality - Bob Woodward
(Mad Asian)
2. STRUCTURAL INEQUALITY IN INDIAN SOCIETY - A RETROSPECTIVE
(CHETAN ROY Christ University)
3. Structured Inequality
(Sociology in Praxis)
4. Structural inequality: Why does diversity in architecture matter?
(Roundtable)
5. The Technology and Structural Inequality Series: Bias and Discrimination in AI
(Brown University)
6. Overview of social inequality | Social Inequality | MCAT | Khan Academy
(khanacademymedicine)

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