Читать книгу Wealth - Yuval Elmelech - Страница 14

The first point revealed by the definition is that wealth is not income. Both measures gauge economic status and standards of living, but they are markedly different. While wealth represents a stock of material resources accumulated over the life course and transferred across generations, income is measured as a monthly or annual flow of financial resources, typically in the form of earnings and wages. This important distinction is often illustrated by the analogy of a stream and a pond. Income is likened to the flow of water that runs into a pond. Because this source can dwindle or completely vanish in years of drought (unemployment), a household must rely on its “pond”: the stock of economic resources, or wealth, that sustains a family during a dry season. To quote Haslett (1986: 123):

A family’s financial well-being does not depend upon its income nearly as much as it does upon its wealth, just as the strength of an army does not depend upon how many people joined it during the year as much as it does upon how many people are in it altogether.

It is also noteworthy that commonly used official measures of poverty in economically developed countries are based exclusively on family income. Social scientists have urged policy makers to develop more comprehensive measures of economic deprivation that incorporate wealth ownership (Shapiro and Wolff 2001; Headey 2008), stressing that the exclusive focus on income produces an optimistic picture of the actual extent of economic hardship. Some more innovative measures of asset-based poverty estimate the period of time during which a household can meet its basic needs by relying solely on the conversion of wealth holdings into monthly income (Haveman and Wolff 2004: 149; Rothwell and Haveman 2013; Caner and Wolff 2002).

The tendency to focus solely on income as a measure of economic status is often justified on the grounds that wealth and income are so strongly associated with each other that the functional differences between them are inconsequential for stratification research. This assumption is largely misguided, however. Although wealth and income are positively correlated, the magnitude of the correlation is modest (estimates range between .26 and .50), and the association between the two measures tends to vary considerably by income bracket (Keister and Moller 2000; Keister 2000: 10–11). For example, Inhaber and Carroll (1992: 90) found that estimates of the wealth-to-income ratio for the middle-income category are about 3 to 1, but the ratio for those in the top income bracket was 20 to 1, a pattern that reflects an extreme concentration of wealth. A particularly weak correlation between income and wealth occurs in the case of young, highly skilled professionals who have high-paying jobs but substantial debt in the form of student loans, or in that of economically well-off retirees, a population characterized by low wages but relatively large sums of wealth accumulated during pre-retirement years. Beyond correlation, then, these examples underscore the intricate causal relationship between income and wealth across social classes and over the life course. For many working-age households (except the wealthy), surplus income received in exchange for labor effort is the most important source of savings and accumulated wealth. Among the wealthy, the direction of this causal relationship is reversed: wealth is a major source of income in the form of interest payments, dividends, or capital gains. Hence a general, correlative approach to wealth and income tends to overlook the causal relationship that exists between the stock and flow of economic resources, further demonstrating the need to distinguish wealth from income.

In addition to drawing a clear distinction between wealth and income, the definition of wealth reveals that wealth has three unique properties, which correspond to three points of focus of the social research carried out on wealth attainment. These foci are wealth as private property, wealth as portfolios, and wealth as net worth.