With stratification, people are evaluated and rank-ordered based on their income, wealth and education. People with the most valued commodities (wealth, income, education) are in the category at the top, while those with the least valuable commodities are at the bottom.
Social inequality is the inequality of access to valued goods and services, and/or the inequality of opportunity to attain certain desirable social statuses. This is reinforced by cultural norms, and an example is that the average citizen in our culture views the differential between doctors and common laborers. Doctors get a higher salary than common laborers, and this is not just seen as appropriate, but as "obvious," and as common sense.
During socialization, children begin to learn the norms of culture, and understand their socioeconomic class. They learn how to act and what to value. This is furthered with institutionalized inequality, where a poor child who cannot affort a private school goes to a worse school. They have meager resources and may score badly on standardized tests. This may be compounded with the fact their parents cannot afford to send them to college, and their scores don't warrant a scholarship. Thus, they are left working the same low-level jobs their parents have, continuing the cycle.
Stereotypes are described as invalid generalizations. These occurs when the complexity that goes into an individual's makeup is ignored, and a person is seen to the degree of which they possess an attribute. A whole array of characteristics are then associated with this person because of the social commodity they possess.
Based off of a stereotype, others may discriminate against a targeted individual. This is known as prejudice, which is an unfavorable assessment of someone because of their assignment to a stereotypical category.
Discrimination further elaborates stereotypes and prejudices. This is because discrimination is described as unfairly treating and, possibly, outright abusing the stereotyped person.
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