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What is Socioeconomic Status?

By Ken Black
Updated May 23, 2024
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Socioeconomic status, sometimes shortened to SES, is a classification indicating the close relationship between a person’s social status and his financial standing. Assumptions about this status are not necessarily founded and can conflict with other beliefs, but communities still tend to organize and analyze themselves based on it. Using this classification has both advantages and disadvantages.

Points of Assessment

People who try to determine socioeconomic status look at the three interrelated factors of income, education and occupation. Income tends to go up as the level of education increases, in part because higher education provides individuals with the skill sets necessary to enter occupations that provide higher pay. Earnings go down as the education level drops. The result is that, in general, those who have less education have less income and a subsequently lower standing.

Levels and Related Risks

Experts divide SES loosely into low, middle and high levels. A strong correlation exists between lower standing and many risk factors such as diabetes and arthritis. Mental issues also increase. It is unclear in many instances whether these issues are the result or the cause of the lower standing. It is possible for people to move from one level to another many times over the course of their lives.

The Cluster Effect

Most of those in various divisions of socioeconomic status tend to cluster together. This might be due at least in part to the fact that people of similar income level, occupation and education can relate to each other’s daily successes and failures. The cluster effect also might occur because people tend to settle where prices are in line with their income, particularly when it comes to rent. Some people compare socioeconomic status to issues such as race because of these apparent divisions of people.

Associations and Idealistic Conflicts

People tend to see being in a higher socioeconomic level as being positive, perhaps because of the known decrease in health risk factors. Psychologically speaking, the idea is that going up levels means an easier life. Individuals also assume that those in higher levels have better skills or intelligence. The tendency therefore is for people to want to go up levels rather than down.

None of these associations or assumptions are necessarily true. Even people in higher levels can suffer from genetic disease, for example, and some people inherit their funds or happen to get lucky with a single marketable idea. Many individuals who have a lot of money are not happy. Some even shun their financial security for things they consider more important, such as living simply for better spiritual fulfillment.

Assumptions about SES can be in conflict with other ideals of a given society. A community might work to provide aid to members of the low level, for example, thereby closing class gaps. The principles behind capitalism, however, say that the best entrepreneurs and businesses naturally rise to the top and that classes therefore are inevitable.

Benefits and Drawbacks

Looking at socioeconomic status has both benefits and drawbacks for communities. Critics of the classification assert that people associate significant stereotypes for each of the three SES groups. These stereotypes might lead to profiling or problematic, erroneous assumptions in projects and endeavors. An example is to assume that, when a school in a poorer and less socially advantaged area fails, it is the fault of the school’s staff. Even within the different SES groups, some individuals do not fit the generally accepted trends.

Advocates of SES assignment claim that it might reveal which areas or individuals are most in need of social aid and other programs. If crime is lower in an area with higher SES, for instance, then the police department can focus resources elsewhere. This translates to greater efficiency and decreased instances of fraud, which saves money. The community leaders also spend only where need is verifiable.

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Discussion Comments

By anon153217 — On Feb 16, 2011

Will socioeconomic status give you peace? I am intelligent enough to eat healthy foods. I have tremendous amount of self-control.

My socioeconomic status? I do not have a whole lot of money. But, I do have peace. And, I am happy and healthy. Thank God. Amen.

By Bhutan — On Nov 15, 2010

Comfyshoes- Obesity and socioeconomic status are inversely related. The more money someone has the less overweight they tend to be.

In fact, financial guru Suze Orman always asks the callers to her show that complain about being in debt if they are overweight also.

She added that for every $1,000 a person is in debt, they are also about ten pounds overweight.

She added that there is a direct correlation between your economic status and your health because managing money and managing your food intake follow similar actions.

There is a lot of delayed gratification for those with healthy waistlines and bank accounts. Those who are impulsive and resort to mindless spending also are more likely to resort to mindless eating as well. Socioeconomic status and health are related.

By comfyshoes — On Nov 15, 2010

BrickBack-I have heard about that story. While I am sure than many people with an entrepreneurial bent can make a success of themselves regardless of their education level, I do think that education can only help an individual.

I also wanted to add that many researchers believe that there is a link with the overall level of health of an individual and their socioeconomic situation.

Researchers have found that the higher the socioeconomic resources a person has, the more likely they are to see a doctor for preventive exams which enhances their quality of life.

Also, because they are more educated, they tend to eat more nutritious food and live healthier lifestyles. Those with a low socioeconomic status tend to eat more fast food and processed food because it is the least expensive.

As a result, the poor often suffer from more health ailments because they get unhealthy food and do not see a doctor as often as their wealthy counterparts.

By BrickBack — On Nov 15, 2010

Subway11-Some people are starting to believe that practical experience and a keen business sense are more important than a college degree when determining the future socioeconomic status of a young adult.

There is a billionaire entrepreneur that they featured on Fox News that was offering twenty college students under 20 $100,000 if they were to draw up a business plan and create a business and drop out of college.

Those with the most successful plans would not only be granted the money to start the business, but they would also receive a mentor that would help them implement the business model.

While many go to college to raise their potential socioeconomic status ses, some find that socioeconomic status with education might be overrated.

By subway11 — On Nov 15, 2010

I always find socioeconomic status statistics interesting. It is said that college graduates tend to earn a million dollars more in their lifetime than high school graduates, so education does play a significant role in one’s socioeconomic status scale.

There are always exceptions to this belief. Look at Bill Gates, the founder of Microsoft and one of the wealthiest men in the world. He dropped out of college at Harvard and founded one of the most successful technology companies in history.

He has achieved high socioeconomic status, but yet did not receive a college degree.

Rush Limbaugh is another example of an individual that dropped out of college because he knew that he wanted a career in broadcasting at a young age and followed his dream until he attained it.

For a good part of his life before he actually made a success of himself, his parents thought that his future would be scarred because of his lack of a college degree. He is now a multimillionaire with a high socioeconomic status or SES.

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