Exam 12: Income, Social Class, and Family Structure

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Veblen's inspiration came from anthropological studies he read of the Kwakiutl Indians, who lived in the Pacific Northwest. At a potlatch ceremony, the host showed off his wealth and gave extravagant presents to the guests. The more he gave away, the greater his status. Sometimes the host would use an even more radical strategy to flaunt his wealth: He would publicly destroy some of his property to demonstrate how much he had. And the plot thickens: Because guests had to reciprocate by giving a gift of equal value, the host could humiliate a poorer rival with an invitation to a lavish potlatch. The hapless guest would eventually be forced into bankruptcy because he needed to give away as much as the host, even though he could not afford it.
If this practice sounds "primitive," think for a moment about many modern weddings. Parents commonly invest huge sums of money to throw a lavish party and compete with others for the distinction of giving their daughter the "best" or most extravagant wedding, even if they have to dip into their retirement savings to do it.

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In China, an economic boom is rapidly creating a middle class of about 100-150 million people that analysts project will grow to 500 million by 2022. During the Cultural Revolution, Mao's Red Guards seized even the smallest possessions-a pocket watch or silk scarf-as evidence of "bourgeois consciousness." Change came rapidly in the early 1990s, after Mao's successor Deng Xiaoping uttered the phrase that quickly became the credo of the new China: "To get rich is glorious."
Because costs are low, a family with an annual income below the North American poverty line can enjoy middle-class comforts, including stylish clothes, personal computers, and cell phones. Wealthier Chinese entrepreneurs can indulge in Cuban Cohiba cigars that sell for $25 each, a quarter of the average Chinese labourer's monthly wage. In bustling Shanghai, "yuppies" drop off their kids for golf lessons; visit Maserati and Ferrari showrooms; buy some luxury items from Louis Vuitton, Hugo Boss, or Prada; then pick up some Häagen-Dazs ice cream before heading to an Evian spa to unwind. One cultural difference that may help to account for this love of branded goods is that Asians tend to be highly sensitive to cues that communicate social standing, and well-known brand names help to manage this impression. Indeed, researchers report that Asian immigrants and Asian-North Americans prefer branded goods to generic products.
Nike, which consumers in a survey named China's "coolest brand," profits mightily from the rise of the Chinese middle class. Nike shoes are a symbol of success, and the company is opening an average of 1.5 new stores a day in China. The company worked for a long time to attain this status: It started by outfitting top Chinese athletes and sponsoring all the teams in China's pro basketball league. Still, becoming a fashion icon (and persuading consumers to spend twice the average monthly salary for a pair of shoes) is no mean feat in a country that's not exactly sports crazy. So Nike affiliated with the NBA (which had begun televising games in China), bringing players such as Michael Jordan for visits. Nike has also committed to sponsor China's League of Legends e-sports league until 2022. Slowly but surely, in-the-know Chinese came to call sneakers "Nai-ke."

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Examples may vary.
Think back to groups to which you have belonged. You'll probably agree that in many instances some members seem to get more than their fair share of goodies, while other individuals are not so lucky. Some of these resources may have gone to people who earned them through hard work or diligent study or achieved status.
Adrienne Stringer, founder of Molly Maid Home Care Services, once quipped that, "Every hair in my mink coat represents a toilet I've cleaned." But someone may have gotten the goodies because she was lucky enough to be born with "a silver spoon in her mouth." Such good fortune that one is born into reflects ascribed status.