92 Reading: Global Stratification and Inequality

Global Stratification

Global stratification compares the wealth, economic stability, status, and power of countries across the world. Global stratification highlights worldwide patterns of social inequality.

In the early years of civilization, hunter-gatherer and agrarian societies lived off the earth and rarely interacted with other societies. When explorers began traveling, societies began trading goods, as well as ideas and customs.

In the nineteenth century, the Industrial Revolution created unprecedented wealth in Western Europe and North America. Due to mechanical inventions and new means of production, people began working in factories—not only men, but women and children as well. By the late nineteenth and early twentieth centuries, industrial technology had gradually raised the standard of living for many people in the United States and Europe.

The Industrial Revolution also saw the rise of vast inequalities between countries that were industrialized and those that were not. As some nations embraced technology and saw increased wealth and goods, others maintained their ways; as the gap widened, the nonindustrialized nations fell further behind. Some social researchers, such as Walt Rostow, suggest that the disparity also resulted from power differences. Applying a conflict theory perspective, he asserts that industrializing nations took advantage of the resources of traditional nations. As industrialized nations became rich, other nations became poor (Rostow 1960).

Sociologists studying global stratification analyze economic comparisons between nations. Income, purchasing power, and wealth are used to calculate global stratification. Global stratification also compares the quality of life that a country’s population can have.

Poverty levels have been shown to vary greatly. The poor in wealthy countries like the United States or Europe are much better off than the poor in less-industrialized countries such as Mali or India. In 2002, the UN implemented the Millennium Project, an attempt to cut poverty worldwide by the year 2015. To reach the project’s goal, planners in 2006 estimated that industrialized nations must set aside 0.7 percent of their gross national income—the total value of the nation’s good and service, plus or minus income received from and sent to other nations—to aid in developing countries (Landler and Sanger, 2009; Millennium Project 2006).

Although some successes have been realized from the Millennium Project, such as cutting the extreme global poverty rate in half, the United Nations has now moved ahead with their program of economic growth and sustainable development in their new project Sustainable Development Goals, adopted in September of 2015.

Models of Global Stratification

Various models of global stratification all have one thing in common: they rank countries according to their relative economic status, or gross national product (GNP). Traditional models, now considered outdated, used labels to describe the stratification of the different areas of the world. Simply put, they were named “first world, “second world,” and “third world.” First and second world described industrialized nations, while third world referred to “undeveloped” countries (Henslin 2004). When researching existing historical sources, you may still encounter these terms, and even today people still refer to some nations as the “third world.”

Another model separates countries into two groups: more developed and less developed. More-developed nations have higher wealth, such as Canada, Japan, and Australia. Less-developed nations have less wealth to distribute among higher populations, including many countries in central Africa, South America, and some island nations.

Yet another system of global classification defines countries based on the per capita gross domestic product (GDP), a country’s average national wealth per person. The GDP is calculated (usually annually) one of two ways: by totaling either the income of all citizens or the value of all goods and services produced in the country during the year. It also includes government spending. Because the GDP indicates a country’s productivity and performance, comparing GDP rates helps establish a country’s economic health in relation to other countries.

The figures also establish a country’s standard of living. According to this analysis, a GDP standard of a middle-income nation represents a global average. In low-income countries, most people are poor relative to people in other countries. Citizens have little access to amenities such as electricity, plumbing, and clean water. People in low-income countries are not guaranteed education, and many are illiterate. The life expectancy of citizens is lower than in high-income countries.

The Big Picture: Calculating Global Stratification

A few organizations take on the job of comparing the wealth of nations. The Population Reference Bureau (PRB) is one of them. Besides a focus on population data, the PRB publishes an annual report that measures the relative economic well-being of all the world’s countries. It’s called the Gross National Income (GNI) and Purchasing Power Parity (PPP).

The GNI measures the current value of goods and services produced by a country. The PPP measures the relative power a country has to purchase those same goods and services. So, GNI refers to productive output and PPP refers to buying power. The total figure is divided by the number of residents living in a country to establish the average income of a resident of that country.

Because costs of goods and services vary from one country to the next, the GNI PPP converts figures into a relative international unit. Calculating GNI PPP figures helps researchers accurately compare countries’ standard of living. They allow the United Nations and Population Reference Bureau to compare and rank the wealth of all countries and consider international stratification issues (nationsonline.org).