March 31, 2015 |By Nicholas Fitz
In a candid conversation with Frank Rich last fall, Chris Rock said, "Oh,
people don’t even know. If poor people knew how rich rich people are,
there would be riots in the streets." The findings of three studies,
published over the last several years in Perspectives on Psychological
Science, suggest that Rock is right. We have no idea how unequal our
society has become.
In their 2011 paper, Michael Norton and Dan Ariely analyzed beliefs about
wealth inequality. They asked more than 5,000 Americans to guess the
percentage of wealth (i.e., savings, property, stocks, etc., minus debts)
owned by each fifth of the population. Next, they asked people to
construct their ideal distributions. Imagine a pizza of all the wealth in
the United States. What percentage of that pizza belongs to the top 20% of
Americans? How big of a slice does the bottom 40% have? In an ideal world,
how much should they have?
The average American believes that the richest fifth own 59% of the wealth
and that the bottom 40% own 9%. The reality is strikingly different. The
top 20% of US households own more than 84% of the wealth, and the bottom
40% combine for a paltry 0.3%. The Walton family, for example, has more
wealth than 42% of American families combined.
We don’t want to live like this. In our ideal distribution, the top
quintile owns 32% and the bottom two quintiles own 25%. As the journalist
Chrystia Freeland put it, “Americans actually live in Russia, although
they think they live in Sweden. And they would like to live on a kibbutz.”
Norton and Ariely found a surprising level of consensus: everyone — even
Republicans and the wealthy—wants a more equal distribution of wealth than
the status quo.
This all might ring a bell. An infographic video of the study went viral
and has been watched more than 16 million times.
In a study published last year, Norton and Sorapop Kiatpongsan used a
similar approach to assess perceptions of income inequality. They asked
about 55,000 people from 40 countries to estimate how much corporate CEOs
and unskilled workers earned. Then they asked people how much CEOs and
workers should earn. The median American estimated that the CEO-to-worker
pay-ratio was 30-to-1, and that ideally, it’d be 7-to-1. The reality?
354-to-1. Fifty years ago, it was 20-to-1. Again, the patterns were the
same for all subgroups, regardless of age, education, political
affiliation, or opinion on inequality and pay. “In sum,” the researchers
concluded, “respondents underestimate actual pay gaps, and their ideal pay
gaps are even further from reality than those underestimates.”
These two studies imply that our apathy about inequality is due to
rose-colored misperceptions. To be fair, though, we do know that something
is up. After all, President Obama called economic inequality “the defining
challenge of our time.” But while Americans acknowledge that the gap
between the rich and poor has widened over the last decade, very few see
it as a serious issue. Just five percent of Americans think that
inequality is a major problem in need of attention. While the occupy
movement may have a tangible legacy, Americans aren’t rioting in the
streets.
One likely reason for this is identified by a third study, published
earlier this year by Shai Davidai and Thomas Gilovich that suggests that
our indifference lies in a distinctly American cultural optimism. At the
core of the American Dream is the belief that anyone who works hard can
move up economically regardless of his or her social circumstances.
Davidai and Gilovich wanted to know whether people had a realistic sense
of economic mobility.
The researchers found Americans overestimate the amount of upward social
mobility that exists in society. They asked some 3,000 people to guess the
chance that someone born to a family in the poorest 20% ends up as an
adult in the richer quintiles. Sure enough, people think that moving up is
significantly more likely than it is in reality. Interestingly, poorer and
politically conservative participants thought that there is more mobility
than richer and liberal participants.
According to Pew Research, most Americans believe the economic system
unfairly favors the wealthy, but 60% believe that most people can make it
if they’re willing to work hard. Senator Marco Rubio says that America has
“never been a nation of haves and have-nots. We are a nation of haves and
soon-to-haves, of people who have made it and people who will make it.”
Sure, we love a good rags-to-riches story, but perhaps we tolerate such
inequality because we think these stories happen more than they actually
do.
We may not want to believe it, but the United States is now the most
unequal of all Western nations. To make matters worse, America has
considerably less social mobility than Canada and Europe.
As the sociologists Stephen McNamee and Robert Miller Jr. point out in
their book, “The Meritocracy Myth,” Americans widely believe that success
is due to individual talent and effort. Ironically, when the term
"meritocracy” was first used by Michael Young (in his 1958 book “The Rise
of the Meritocracy”) it was meant to criticize a society ruled by the
talent elite. “It is good sense to appoint individual people to jobs on
their merit,” wrote Young in a 2001 essay for the Guardian. “It is the
opposite when those who are judged to have merit of a particular kind
harden into a new social class without room in it for others.” The creator
of the phrase wishes we would stop using it because it underwrites the
myth that those who have money and power must deserve it (and the more
sinister belief that the less fortunate don’t deserve better).
By overemphasizing individual mobility, we ignore important social
determinants of success like family inheritance, social connections, and
structural discrimination. The three papers in Perspectives on
Psychological Science indicate not only that economic inequality is much
worse than we think, but also that social mobility is less than you’d
imagine. Our unique brand of optimism prevents us from making any real
changes.
George Carlin joked that, “the reason they call it the American Dream is
because you have to be asleep to believe it.” How do we wake up?
ABOUT THE AUTHOR(S)
Nick Fitz is graduate student at the National Core for Neuroethics at the
University of British Columbia. He primarily studies social norms around
technology, health, and illness.
http://www.scientificamerican.
