Homophily and Income Inequality
How does homophily and social networks operate around income and are there exclusions for some based on their level of income? Research for this has been based on studies from the United States as there is a rich source of data derived from the population that includes race, income, trust and social networks. There is little doubt though, that some of the findings in this case study are applicable to Australia also. It is important to note at the outset that I am conscious of the lens through which this topic is viewed and that any perceived bias is accidental.
What happens when there is a discrepancy amongst different wages in a society? Or even if there is no wage, as may be the case for welfare recipients. How does different stratum in society maintain their difference from others, is itself regulated or forced? Is income a factor? Can an individual move between this stratum? It is already known that different wages exist within organization due to job role, education level, time in service or even contract of employment type. Understanding these different stratifications has been the subject of research in the field of social networks. This stratification can then lead to homophily. Homophily, or “birds of a feather flock together,” occurs when demographically and socioeconomically persons form. This can be taken further by stating that similar people will make contact with each other than they will with dissimilar people. These groups can be shaped within the workforce and within society in general. Real estate is a prime example of how homophily groups of people exist but seldom come in to contact with each other. Unemployed and low wage workers become concentrated in neighborhoods that are segregated from those that may be more affluent. Income is also another stratum that exists that can lead to class division. Paarlsberg, Hoyman and McCall, discuss how these different classes are unlikely to share common interest or values. This can also be said for trust that exists within groups and with other groups. How trust impacts individuals in groups and those of other groups has shown that trust is higher for those deemed to most like ourselves.
To look at the above and apply the conceptual and theoretical frameworks gives a good indication of the effects these homophily and networks have on society at large. It is important to understand that the view taken here is of inequality for the lower income groups within society and not the elites. Society, if a pyramid, is larger at the bottom than at the top and it is this larger group that is of interest.
Taking a deeper look in to the inequalities that exist between these different layers within a society and applying frameworks show us how pervasive these issues are. Looking at the spheres of inequality, there are elements that relate to all three types; material, political and cultural. From the material sphere, inequality occurs through wages and job availability and social exclusion. Homophily has been shown to exist when it comes to occupation and job prestige. This also applies to social exclusion. Social identity can influence economic outcomes for individuals and therefore may result in the exclusion of others, resulting in a strengthening of networks. Education levels can play a role in social exclusion as people prefer to confide in those of the same or similar education levels. The political sphere plays a role when it comes to the welfare system of the state and how it treats those on it. The clustering of the unemployed in certain neighborhood’s results in urban decentralization and further reduces opportunities for individuals to get off a welfare system. This just perpetuates the unemployment cycle and works against those that are recipients in breaking away from the reliance on their networks and moving in to different levels or stratum of society. The cultural sphere and how certain groups are represented in the media is a critical tool in further dividing different groups in society. Whether it is the constant reality television of those famous for being famous or the news media’s portrayal of the gulf that may exist between groups, theses representations may further strengthen networks and add to the exclusion of others.
Figure 1 demonstrates the divide that can exist in a residential area and how the homes on the right appear to be more affluent than those on the left. Media also likes to depict the gap between groups, whether it be by race or wealth.
Figure 2 is a relatively common theme of the business person, rich individual, turning away from the person holding up a sign indicating help is required. Interestingly, both subjects are white in this image but gender is present.
There is evidence that all sites of inequality are present in regard to homophily groups and social networks. This would suggest that the broader issues of segregation of society is strongly correlated to income inequality as it may be a determinant of most of the other aspects of these sites. Looking at each site of inequality individually, it is easy to see the applicability;
Knowledge — the availability and use of technology can play a significant role within social networks. If there is insufficient money for technology or a lack of the enablers required, internet and phone plans, then exclusion from groups is going to occur. The opportunity to look for better jobs, complete further education and interact with others becomes limited and acts to reduce the opportunity for individuals to improve their situation.
Work — as mentioned previously, occupation is a strong correlation for forming of groups and for homophily to exist. The type of roles available to individuals and whether there exists an opportunity to be promoted would lend itself to moving in to different networks. New acquaintances and the possibility of moving home to a new suburb would manifest if opportunities arise.
Family — Income inequality within the family is a subject that has been extensively researched, in particular how it relates to husband and wives and their social networks that result. It has been shown that in marriages in which the wife is the higher wage earner, husbands are less happy and more likely to get divorced. The influence of low-income parents on their children can also have a negative effect and result in drug use, imprisonment and early pregnancy.
Place and space — Income inequality leads to segregation of families and individuals by suburbs. There is abundant data available online to show the income level of suburbs. In the United States, this segregation also goes deeper as racial discrimination may preclude some ethnic groups or blacks from moving in to certain neighborhoods.
The body — as described above, the racial aspect is a major issue in the US. By forcing low income families to be further segregated by race limits opportunities for individuals to change their networks. This homophily at the grass roots level is not one of choice but of circumstance.
Given that the inequality driven by income that results in the broad spheres and sites are mentioned above, how does society address it? It is impossible to realign a complete society to remove stratification and segmentation unless it is the result of a brutal and repressive regime. The closest example for society to be equal would be that of socialism, or in its extreme form, Stalinism. These social ‘experiments’ have failed and have resulted in Moscow now looking similar to any other US city in respect to rich and poor. So, we have to work with what we have. If social networks, homophily and income all contribute and aren’t likely to be replaced or removed, then the challenge is breaking down the boundaries or walls that exist that let these factors rule. Social mobility will always mean that a portion of the population are looking to improve their position through education, better jobs and bigger houses or nicer neighborhoods. This leads to people forming new or joining different homophily groups and the cycle be perpetuated.
Do individuals that rise above or change networks look back and support those they left? Difficult to answer. There needs to be an individual and structural change in a society if inequality around income is to be reduced. Using agency and acts of resistance can be done if there is a will to do so. Sometimes though, these take place within similar groups. Social movements, such as “We are the 99%” and the “Occupy Movement”, have been used in the US to highlight income inequality and the uneven distribution of wealth in society. But moving between these groups requires considerable effort. It is possible for an individual to use agency to take on further study, improve job and wages and move to a nicer neighborhood. But once again, race, place and space add to the level inequality. DiMaggio and Garip (2102) discuss extensively how homophily exists in those that tend to adopt change. Those that do not adopt change will also associate with each other. Once again, the cycle, at a societal level, is hard to break.
How governments deal with this segregation is also challenging. If like individuals will group together, then structural change may be outside of the possibility for government institutions. If government is to provide a safety net and ensure a welfare system exists for those that require it, it could be viewed that they are perpetuating the issue. Acknowledging that a stratum exists makes it identifiable and therefore open to inequality. State housing in Western Australia is placed throughout many high median price suburbs in an attempt to avoid clustering welfare recipients in one suburb. This in itself can be an issue if the residents in these suburbs have already formed networks and refuse to accept their new neighbors. This accentuates the inequality as the state housing recipient is excluded from joining a possible new network that may lead to opportunities.
Acts of resistance in dealing with these problems are more likely to start at the bottom. Education, a second job, new suburbs are all possible for individuals. Higher education costs, lack of work and lack of affordable housing all work against it though. Add to this the possible limitations by the different sites of inequality and it would appear that the existing inequality just keeps going on. Only individual agency will work, not at a broader society level.
As this essay has shown, homophily exists due to the segregation and stratification of societies based on income, race, education, occupation and even within households. Moving between these groups is possible if done at a stratum similar to one that an individual is in. However, inequality is compounded through all the spheres and sites that the framework available suggest. Modern western societies perpetuate and compound the issues by lacking means to deal with at a government level. Collectivism and socialism are not an option and have failed in the past. Agency is then up to an individual to move between groups, if they so desire and if their means are appropriate. In conclusion, the inequality reviewed will only remain in society, or even get worse, as society continues to have different opportunities for people based on the stratum above. Acts of resistance will continue but the weight of numbers is certainly on the side of the current paradigm.
