Rising Wealth Inequality: Should We Care?
Why do Americans seem unperturbed about the growing gap between the rich and the poor?Americans Aren't Naive
Updated March 22, 2011, 09:52 AM
Leslie McCall is a sociology professor and fellow at the Institute for Policy Research at Northwestern University. She is finishing a book on American attitudes about income inequality, economic opportunity and redistribution.
Understanding what Americans think about rising income inequality has been hampered by three problems.First, polls rarely ask specifically about income inequality. They ask instead about government redistributive polices, such as taxes and welfare, which are not always popular. From this information, we erroneously assume that Americans don’t care about inequality.
What we are missing is an understanding of why Americans desire less inequality.
Second, surveys on inequality that do exist are not well known. For instance, since at least the late 1980s, a majority of Americans have agreed with the statement that income differences in the U.S. are too large. Similarly, 70 percent or more have said for decades that executives are overpaid, and a smaller share have said that lower-level occupations are underpaid. Americans say this despite underestimating how much executives earn (though we should not really expect people to know these figures).Third, although I found that newsweeklies began covering the issue of rising inequality in the 1980s, and coverage increased at key junctures (e.g., in 1992 and 1996), politicians and the media do not consistently engage Americans on the issue.
Even though Americans underestimate how much inequality exists, they still want less of it, as studies have shown since the 1980s. Therefore hammering home how extreme inequality really is probably will not heighten public concern, though it might cause policymakers to be more focused on the issue. This is why Norton and Ariely's paper is so significant. The other point to remember is that political scientists have done research on the role of "facts" in moving public opinion and they often don't have much effect.
What we are missing is an understanding of why Americans desire less inequality. Far from believing naively in the American dream, Americans are well aware of barriers to opportunity, such as the dearth of good paying jobs and accessible, quality education for those with middle and lower incomes.
My research suggests that, in times like these, Americans hold the rich partially responsible because of their reckless stewardship of the economy, spurred to some degree by rising inequality. Taxing the rich does not seem to be the most direct solution to these problems, whereas putting the economy back on track through equitable growth does. Thus Americans support regulation (including curbing executive pay), job growth and fair pay (as we’ve seen lately in Wisconsin), and education.
It is often said that Americans care about opportunity and not inequality, but this is very misleading. Inequality can itself distort incentives and restrict opportunities. This is the lesson that episodes like the financial crisis and Great Recession convey to most Americans.
http://www.nytimes.com/roomfordebate/2011/03/21/rising-wealth-inequality-should-we-care/americans-arent-naive-about-income-inequality
After reading this article I believe that rising inequality is out of control in some areas of business. I see it as a problem more with big business than with the average entrepreneur. An individual that risk it all for the American Dream and succeeds is one thing, but a corporate executive that takes a 10 billion dollar bonus is excessive. Especially when you consider the fact that many of these corporations that are handing out these absurd bonuses are in trouble financially. News stations often highlight corporate executives that use corporate money for personal reasons such as extravagant vacations and parties, while the government is in the process of bailing the corporation out financially. This type of behavior is totally unacceptable and should not be rewarded with taxpayer’s dollars. The average entrepreneur that waste company money on such frivolous actions certainly would find no help from the government. The money used to bail out corporations that have used funds inappropriately would be better served if it was used to help educate under privileged families affording everyone the opportunity to find the American Dream. I completely agree with the statement that Americans do not care as much about inequality as they do opportunity. America has always been known for its vast opportunities, it is what has drawn people from all around the world to our country. Americans do not have a problem with individuals seeking the American Dream and succeeding, what I believe they have a problem with is gross negligence in the corporate world.
ReplyDeleteIt's a shame that americans are not able to understand the true scale of inequality. Its frustrating that surveys walk around the issue and the news rarely brings it into discussion, despite the fact that it is such a large scale issue. on the bright side, Americans are aware of at least some inequality and are desirous of it's decrease. The problem is that there is still little focus on the issue, especially by law makers so I disagree with authors argument that learning the true scale of inequality would't effect Americans. I belief that Americans would act with much more aggression if they learned of the true scale of inequality. There would be increasing pressure on law makers to pass legislation that would fill the income gap. Change in the system of inequality cannot be made without force from an authority.
ReplyDeleteI agree with Sam that the rising inequality is more at fault with big businesses rather than the average entrepreneur. I thought it was also interesting about the problems that surveys hold because of the inaccuracy of the questions. Surveys do not usually ask about specific income inequalities, but more about well-fare and taxes. Another problem with surveys on inequality are not well-known. The article also points out more examples of how Americans want a more equal society, but they just do not know how to do it or do not even realize how large the gaps in society are.
ReplyDeleteIt's sad that the inequality is hidden from Americans. If they were more educated on the problems in society, they would be more likely to help to solve them. It is not right that the surveys do not show the inequalities, but instead they focus on the smaller issues. The income inequality needs to be addressed as a priority. The article says that even though the inequalities are not shown, it is proven that people still want to change it. I suggest that the people take action instead of complaining about the issue. Nothing will ever get done unless someone steps upand takes control of the problem.
ReplyDeleteIn a way, people's lack of concern for the growth of inequality is not fully their fault. Because it is becoming such an big issue, more attention needs to be brought to it, but the attention is failing to focus on the issue. Obviously, as the author is saying, people do have an idea that there is inequality of wealth to an extent, but many people do not have the desire to learn because their individual situations are okay. I disagree with the author to an extent. I think that more emphasis on this issue will heighten people's concerns on this issue, but not enough to get angry and want to make a change. In the end, people are, and have to be more concerned with their own situation for the sake of their family and personal well-being.
ReplyDeletePeyton Bromley said...
ReplyDeleteI agree with Kaylin. If we heard about the problems going on and weren"t sheilded from them we could totally help solve and rectify them. Instead in our society ignorance is bliss. The polls and surveys aid this idea by constantly avoiding the big issues and only asking questions focusing on the small issues. If people really knew how bad the inequality in our society was there would be a bigger push for change. While the polls ask the wrong questions polls do show the desire for change. Authority is needed to create a change in our society.
The most disturbing sentence of this article was "The other point to remember is that political scientists have done research on the role of "facts" in moving public opinion and they often don't have much effect." It is disappointing that people cannot look at the financial situation in black and white and see it for what it is. Knowledge of the problem is necessary for Americans to be able to try to fix it. Instead of denying what we wish weren't true, we should be honest with our country's shortcomings in order to improve it for the future. The self-confidence in our country as discussed by Freeland can also be a downfall when it impedes us from admitting flaws.
ReplyDeleteAlthough there are some people that still believe in the American Dream, may citizens today have recognized that society is not equal and there will always be people who have an advantage. However there are many who do not want to admit this flaw in the American society, they want to believe that there is still some opportunity left for those in the middle and lower class. All of the facts presented to society are distorted so people are not able to completey understand what the numbers are saying to them. Most people realize that executives and other people in high class positions are being overpaid. Society needs to begin to take steps to fix this problem and provide more opportunties for the lower classes.
ReplyDeleteInstead of sending out surveys, our government should educate it's citizens on economic inequality in American society today. I agree with Kaylin when she said "the people take action instead of complaining about the issue". I believe that education on this issue would encourage and inspire people to make a change.
ReplyDeleteThis article states that Americans aren't overly concerned with the growing income gap between the wealthy and middle class because they don't want to admit that the gap limits opportunities for the lower class. Though Americans are well aware of the gap, they don't want to admit that it exsists let alone restricts the lower class from breaking free of their financial barrier. The rich are getting richer and the poor poorer but no one's complaining about the inequal distribution of wealth because people want to believe things are more equal then they actually are, even if they know better.
ReplyDeleteI agree with the point that Corinne made. It is true that many Americans almost refuse to believe the amount of inequality that is in our society, mostly because of the pride that they have in American society. No one wants to believe that our society is developing in a way that is widening the gap between the rich and the poor, eliminating the middle class.
ReplyDeleteAmericans aren't Naive is an ironic title because truly Americans are naive. We do not see the inequality as such an issue, but the problem is there and not many people are doing anything to help. The awareness are inequality is very vague which explains why people are not trying to help, i believe if many more people were aware that income inequalities exists as harshly as they do more people would be willing to help solve this issue.
ReplyDeleteI agree with what Morgan said, our government should be educating the people and not just sending out a survey for them to fill out. I also agree with Corrine and Claire, many Americans are oblivious to the inequality in America.
ReplyDeleteIt does not surprise me to hear that Americans underestimate how much inequality exists. Americans are very naive about the gap between the classes. We should be educating people on the issue, getting them involved so that maybe it will not be such a problem in the future. The American dream is false and the rich should not be put to blame because it is not fully their fault. More emphasis needs to be put on this issue and it should be fixed.
ReplyDeleteIt very obvious to me when reading this article that the average American has not taken a sociology course. To say that Americans care about equal opportunity and less about financial equality is, while true, comical. As we have seen in our studies how well a person does in life is dependent on their starting point in life. The opportunities available to a person are contingent upon that ever important starting line too though. So what everyone in America really wants is equal starting points.
ReplyDeleteI agree with Shannan's comment. i also disagree with the author when he says that people will change this when they become more educated. I think Shannan is completely right when she says that people are going to be more concerned about their own and their families well being. People need to be educated on this topic to gain a better understanding of their country, but the general outcome may not be as good as the author suggests.
ReplyDeleteI agree with Morgan's comment that we need to educate Americans about the inequality in the economy. Although most Americans know that there is a large gap between the super rich and the poor, they may not know to what extent this gap spreads. For example, a middle class individual struggling to make ends meet may find it easy to blame his/her money problems on a wealthy executive island hopping on their yacht. This same middle class person make not know however how outrageous and extravagant the executive's bonus each year is. While the middle class person goes to work everyday to support a family, the executive may still make a hefty income without entering an office. I do not think Americans are as naive as the author suggests
ReplyDelete-Madison
i think that corporations keep spending excessively and trying to get bonuses for themselves because they are comfortable that the government will just bail them out. For example, if a corporation goes into debt it is easier for them to ask the government to help bail them out and if the government does help them out than they dont really learn their lesson. They are just going to keep being reckless with their money.
ReplyDeleteI do not think that Americans once they become more educated will become more acknowledged to the wealth imbalance because with education come high powered jobs and opportunities and with high power there is competition. There will always be people competing to get to the top of the food chain. People are not going stop to think about the poor and impoverished but continue there plan to the top.
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