Macroeconomic theories and frameworks

Macroeconomic Theories and Nickel and Dimed

Nickel and Dimed: On (Not) Getting by in America

In 2001, Barbara Ehrenreich, a professional journalist with an advanced science degree conducted a personal "social experiment" in which she put herself into the proverbial shoes of the American working poor. According to Ehrenreich, approximately one-quarter to one-third of the American workforce consists of so-called "unskilled" adult laborers who must work long hours, often holding more than one fulltime job at a time, just to earn enough money for the barest basics of food and shelter.

In many cases, Ehrenreich reports that even working two minimum wage jobs, it is still impossible to save enough money to support any semblance of the life that most Americans should be able to support in this day and age. She found it impossible to save the minimum necessary to be able to afford first and last month's rent on even the cheapest available apartment, let alone to even consider saving enough to put a downpayment on a home. Health insurance is a an unattainable luxury for most of the working poor, many of whom do not receive even minimal medical care or services unless they or their family members are ill enough to show up at a hospital emergency room. The author refers to this situation as a "national embarrassment" that does not get a fraction of the attention that it deserves.

Ehrenreich's experiences consisted of working in Florida as waitress, in Maine as a cleaning woman, and in Minnesota as an Associate at retail giant Wal-Mart. Contrary to the phrase "unskilled labor," the author found that some of the menial tasks that she encountered in her various experimental occupations required considerable skills, not to mention stamina, strength, endurance, and the ability to adapt to the discomfort and physiological consequences of performing repetitive movements continually, day after day. Ehrenreich also concludes that it is strictly a myth that the poor are responsible for their own plight by virtue of laziness or the unwillingness to work. Likewise, Ehrenreich suggests that the conservative political belief that maintaining a job is the best answer to poverty is very often completely untrue; in fact, a substantial portion of the adult American population remains perpetually poor despite working continually, sometimes for years or even decades.

The author details the routine manner in which store managers handle extremely high turn-over rates among unskilled workers in a manner that further degrades applicants, adding insult to injury. Specifically, managers continually interview replacement workers even when no openings are available simply to maintain a backup supply of replacement workers available on short notice. In some cases, job applicants who cannot afford to waste a penny end up spending their only savings on transportation costs or childcare hoping to secure paid employment immediately, only to show up for an interview at a business advertising "Help Wanted" without any current openings available.

The author details many other instances of similar small daily expenses that are inescapable for the working poor who seem to pay more and receive less value for everything, from fast-food meals purchased one at a time in lieu of grocery shopping to motel fees that may absorb half their income or more as they try in vain to accumulate enough money to afford to secure a rental apartment anywhere in the remote vicinity of available employment. The work relates directly to four specific social theories: Conflict Theory, Modern Structural-Functional Theory, Ecosystems Theory, and Role Theory.

Conflict Theory

The original basis for social conflict theories was the philosophy of Karl Marx whose concepts would culminate in the Bolshevik Revolution in Russia in 1917. Subsequent social conflict theorists revised Marx's original theories to apply more directly to modern societies, but in principle, all social theorists conceive of human societies as composed of different social groups possessing widely differing degrees of social power and influence over both society in general and over their own personal situations in particular.

Marx described the general distinction of a ruling class and subject class; the basis of the social conflict according to Marx is simply that the ruling class owns the mechanisms, means, and institutions of production, giving it power over the subject class whose lives are largely determined by whatever the ruling class makes available to them. The ruling class maintains a firm hold on all elements of political and financial influence in society and perpetually exploits the subject class, using them for necessary labor to provide the comforts and fuel additional profits enjoyed by the ruling class. In Marx's original theory, the growing conflict between the two classes eventually results in a rebellion or revolution by the subject class who always outnumber the ruling class substantially.

Subsequent social conflict theorists describe a more benign but equally unjust relationship between the more economically privileged classes and the least economically privileged classes. The revelations of Ehrenreich's experiences as a member of the American working poor exemplify the model described by Max Weber, a contemporary of Marx's who explained the connection between the social class into which an individual was born and the relative opportunities available to elevate or improve his situation in life. In the modern United States, the circumstances encountered by Ehrenreich are much more likely to become the plight of those already disadvantaged by virtue of being born into relative poverty without the same opportunity to succeed through the pursuit of higher education as most of those born into relative economic comfort.

Modern Structural-Functional Theory

Generally, structural-functional social theories describe the manner in which the collective groups, social norms, and society's institutions provide a functional stability or equilibrium among even economically diverse social classes in which members of some classes and institutions are tremendously better off in society than members of others. Emile Durkheim conceived of a concept that he called anomie to describe the importance of socially valued goals and norms and to characterize the specific source of psychological stress or conflict arising from the fact that many in society cannot obtain what they have learned to desire through generalized absorption of social norms and values.

Among the modern structural-functional social theorists, Robert Merton provided a model that most closely illustrates some of the dynamics encountered and described by Ehrenreich. In that regard, Merton suggested that equilibrium does not always characterize the relationship between social classes and social institutions. More precisely, Merton characterized certain institutions, relationships, and functions as distinctly dysfunctional, primarily because they may provide very differently for the needs of some than others.

The situations and circumstances detailed by Ehrenreich exemplify some of Merton's observations, particularly in relation to those fortunate enough to shop in malls or to book rooms in hotels as compared with the nameless and often identity-less working poor who serve their meals in the food courts of American shopping malls and make hundreds of hotel beds and clean the same number of toilettes so that hotel guests are greeted by clean, fresh-smelling rooms.

The system undoubtedly "works" for mall food court vendors, corporate hotel chains, and for their customers and patrons; it does not work very well for the unskilled working poor whose labor generates much of the profits in those industries. Ehrenreich absolutely disagrees with the common perception that the poor are recipients of the generosity of society; she suggests that by virtue of their hardships, the more economically advantaged benefit from the forced generosity (or plight) of the working poor for their services that enable our comparative luxury.

Ecosystems Theory

Urie Bronfenbrenner's 1979 work, the Ecology of Human Development introduced the ecosystem theory applied to human social groups and developmental psychology of the individual. In principle, Bronfenbrenner differentiated four (and later, five) systems to describe the manner in which interaction between and among individuals and various elements of their external reality contribute to their personal development and to their social opportunities in society.

Bronfenbrenner's four systems consist of microsystems (i.e. nuclear family, neighborhood, schools, etc.); mesosystems (i.e. The specific connections between the individual and microsystems); exosystems (i.e. external environment and circumstances such as the work experiences of the parents); and macrosystems (i.e. The larger elements of society such as national culture and political climate). The additional (fifth) system is the chronosystem (i.e. The long-term patterns that describe the lifetime experiences of the individual in society such as in relation to the other four systems).