# Social Stratification Business I · Sociology · https://tryals.app/learn/business-i/social-stratification ## The Ranking Machine Every society sorts its members into layers with unequal access to money, power, and prestige. **Stratification** is that layering as a system, a property of the society rather than isolated individuals. **Systems differ in sealed layers.** Caste systems fix position at birth, while class systems allow movement, though modern economies feature sticky floors and ceilings. **Weber split rank into three currencies** that need not travel together, countering Marx's single economic axis: | Currency | What it is | Business face | |---|---|---| | **Class** | Market position and assets | Salary, equity | | **Status** | Social honor and lifestyle | Title, corner office | | **Party** | Organized power | Board seat, network | > **Common pitfall:** Collapsing all three into income. A judge outranks a crypto trader in status while earning less. **Measuring layers** relies on **socioeconomic status (SES)**, combining income, education, and occupational prestige. The **Lorenz curve** plots population share against cumulative income share. The **Gini coefficient** compresses that sag into a single score from 0 to 1: $$\text{Gini} = \frac{\text{area between Lorenz curve and equality line}}{\text{total area under equality line}}$$ **Mobility** measures movement between layers across **intergenerational**, **intragenerational**, and **structural** shifts. Stratification shapes who buys what and which talent pools exist. ## Reading the Ladder How open is a society _really_? Sociologists use a **mobility table** where rows are parents' class and columns are children's class. Cells on the diagonal show immobility, while off-diagonal cells show movement. Absolute numbers mislead because offices expanded. **Structural mobility** is the tide lifting everyone. **Relative mobility** removes that tide to ask if origins still predict destinations. **Odds ratios are the microscope.** They compare the odds of a top-born child reaching the top versus a bottom-born child doing the same: $$OR = \frac{\text{odds}(\text{top} \to \text{top})}{\text{odds}(\text{bottom} \to \text{top})}$$ An odds ratio of 1 means pure fluidity. Real economies run much higher, showing inherited advantage. The **Great Gatsby curve** shows that countries with higher Gini coefficients have _lower_ intergenerational mobility. Inequality and stickiness travel together. > **Tip:** Always split mobility into **absolute** (how many moved due to economic shifts) and **relative** (whose _chances_ improved via odds ratios). Societies celebrate the first, but meritocracy requires the second. > **Common pitfall:** Reading the diagonal as pure unfairness. It shows the pattern, but explaining it requires looking beyond the raw table counts. ## Practice questions 7 of this lesson's 14 practice questions, with answers. The full set is in the app. ### 1. A columnist argues: "Most people today out-earn their parents, so our society is highly meritocratic." What is the flaw? A. There is no flaw B. Out-earning parents is statistically impossible C. Meritocracy requires everyone to out-earn their parents D. Absolute mobility says nothing about origins **Answer:** D. Absolute mobility says nothing about origins **Why:** A rising occupational tide lifts nearly everyone above their parents even in a rigid society. Openness is measured by *relative* mobility, odds ratios that ignore the tide, and those can stay brutal while absolute mobility looks triumphant. Page: https://tryals.app/practice/business-i/social-stratification/a-columnist-argues-most-people-today-out-earn-their-parents-so-our ### 2. Complete the Great Gatsby curve. **Answer:** Across countries, higher income **inequality** is associated with lower intergenerational **mobility**. **Why:** Where the rungs sit far apart, climbing between them gets harder: inequality today predicts stickiness tomorrow. Page: https://tryals.app/practice/business-i/social-stratification/complete-the-great-gatsby-curve ### 3. Order the steps of an honest mobility analysis. **Answer:** 1. Build the table: parents’ class by children’s class 2. Count absolute movement off the diagonal 3. Identify how much the occupational structure itself shifted 4. Compute odds ratios to isolate relative fluidity 5. Compare fluidity across countries or decades **Why:** Table, raw movement, tide, residue, comparison, the pipeline that turns "my grandfather was a farmer" anecdotes into measurement. Page: https://tryals.app/practice/business-i/social-stratification/order-the-steps-of-an-honest-mobility-analysis ### 4. Structural (absolute) mobility or relative mobility (fluidity)? Sort each finding. **Answer:** - Structural mobility: Farmhands’ children became clerks as agriculture shrank, The service boom lifted a whole generation into offices - Relative mobility: Given the same economy, origins predict destinations less than before, The top-vs-bottom odds ratio fell from 20 to 8 **Why:** Structural mobility is the tide; relative mobility is whether you can swim against it. Only the second measures openness. Page: https://tryals.app/practice/business-i/social-stratification/structural-absolute-mobility-or-relative-mobility-fluidity-sort ### 5. Match each measurement tool to what it reveals. **Answer:** - Lorenz curve → The whole income distribution as one sagging line - Gini coefficient → The sag compressed into a 0-to-1 number - Mobility table → Parents’ class crossed with children’s class - Odds ratio → How much origins multiply destination chances **Why:** Two instruments for inequality at a moment, two for stickiness across generations, together they diagnose a society’s ladder. Page: https://tryals.app/practice/business-i/social-stratification/match-each-measurement-tool-to-what-it-reveals ### 6. A society where everyone's income rises and the ranking of families never changes has high absolute mobility and low relative mobility. Which matters for the meritocracy claim? A. Absolute mobility, since outperforming your parents is what people experience B. Both equally, since they measure the same underlying process C. Relative mobility, since meritocracy is about earning position D. Neither; mobility measures cannot test meritocracy **Answer:** C. Relative mobility, since meritocracy is about earning position **Why:** Growth lifts everyone and leaves the ladder untouched, so out-earning your parents is compatible with a perfectly hereditary order. Conflating the two is the standard rhetorical move in mobility debates, and separating them is most of the analysis. Page: https://tryals.app/practice/business-i/social-stratification/a-society-where-everyones-income-rises-and-the-ranking-of-families ### 7. Top-born children reach the top with odds 3-to-1; bottom-born children with odds 1-to-4. **Set the slider to the odds ratio** $OR = 3 \div 0.25$. **Answer:** 12 (within ±1) **Why:** $OR = 3/0.25 = 12$: birth at the top multiplies the odds of ending there twelve-fold. An OR of 1 would mean origins are irrelevant, this society is a long way from that. Page: https://tryals.app/practice/business-i/social-stratification/top-born-children-reach-the-top-with-odds-3-to-1-bottom-born