Rising Wealth Inequality: Should We Care?
Why do Americans seem unperturbed about the growing gap between the rich and the poor?A Volatile Mix of Attitudes
Updated March 22, 2011, 01:37 PM
Lars Osberg is the McCulloch Professor of Economics at Dalhousie University.
The United States is a country that has more marked income and wealth inequality than any other affluent nation, but also does less – in tax and transfer policy – about reducing inequality than anywhere else. However, this cannot be explained by different preferences for economic equality. American views toward inequality are polarized to a degree that is unusual internationally.
In most respects, Americans are not very different from anybody else. When asked, for example, “In (your country), are income differences too large?” overwhelming majorities, in all countries, either “agree” or “strongly agree.” There is also not much difference across countries in average mild agreement with statements such as “Inequality continues to exist because it benefits the rich and the powerful."Where Americans are quite different from Europeans is in their willingness to see government as a legitimate agent of change. When asked what individuals in specific occupations “do earn,” the average American respondent also underestimates the incomes of C.E.O.s much more than people do elsewhere. And there appears to be more tolerance for inequality between the poor and the middle class than is common elsewhere.
However, American attitudes are a volatile mix. Underestimation of the inequality between C.E.O. incomes and the wages of the average production worker wage does not, for example, imply approval. When asked what that ratio should be, the average American – like respondents everywhere – says C.E.O. salaries should be a small fraction of what they now are, and those desires for more equality appear to be hardening, even as the actual differential is widening.
Furthermore, American attitudes toward inequality are polarized to a degree that is unusual internationally. Although Americans do not on average have different preferences for aggregate (in)equality compared with other affluent market societies, the attitude hides a deeper divide between those who accept that “what is, should be” and those who would prefer a very substantial leveling of incomes. Whether this bipolarity of American attitudes will produce a tendency to future swings of public policy remains to be seen.
http://www.nytimes.com/roomfordebate/2011/03/21/rising-wealth-inequality-should-we-care/a-volatile-mix-of-attitudes
Lars Osberg wrote, “Inequality continues to exist because it benefits the rich and the powerful." I disagree with this statement! Equality of opportunity must be present in the United States. Everyone must have the same opportunities. Inequalities of condition are part of the real world. Everyone can not start at the same point. Statuses and roles make everyone start at their own point. Inequalities of outcome are also part of the real world. They do not exist because of the rich and powerful. For example, take twin sisters who have the same starting point. They have a good family, average wealth and the same intelligence. They are both given Harvard educations. However, one parties all the time and does not study. She barely passes, but does graduate. She gets a job as a legal assistant making $40,000 a year. The other sister works hard and makes the Dean's List. She graduates, gets a job as a lawyer and makes $85,000 a year. Are these inequalities the fault of the rich and powerful? How do they benefit the rich and the powerful? Americans say the inequalities benefit the rich and the powerful because they want someone to blame for the situation.
ReplyDeleteI appreciated the comment that the Lars Osberg made, “underestimation of the inequality between C.E.O. incomes and the wages of the average production worker wage does not, for example, imply approval.” When asked how much a C.E.O makes the common person greatly underestimates the number. Just because they assume it is lower does not mean that they are okay with it. I assume the number is a mere fraction of what they make simply because they people who are guessing are so far away from that type of salary that they cannot even begin to comprehend someone making that large of a salary compared to their own. Many people want to hold on to the idea that there is equality and justice in America and so the grossly underestimate the salaries on the C.E.O.s. I thought it was interesting when Osberg brought up the bipolarity of the American people and how they feel about the growing inequality. There is a growing divide between those who accept it for what it is and those who would like to see a leveling out of income. Such a divide and how it continues to shift and grow will greatly affect future policies.
ReplyDeleteI agree with Lexie: everyone deserves the same starting point. You can not make assumptions about the rich or poor when you do not know where they came from. Everyone deserves equal opportunities to choose their own lifestyle. Like Lexie said, if one twin decides to party instead of staying home to study, she deserves to get the lower salary job. It would be unfair for her sister to sacrifice her social life without receiving the beneifit of making a better life. Everyone makes choices in life that will affect their future, but it is hard to compare the rich and the poor when they were not given the same starign line.
ReplyDeleteI also agree with Lexie. Obviously, different starting points are a horrible thing. But people who don't take advantage of a good situation cannot blame anyone but themselves for their outcomes. But no matter what, inequality is not a good thing, and needs to change. Even if it goes greatly benefit the rich and powerful. But shouldn't we be trying to benefit the people who really need it? The people struggling to survive day to day?
ReplyDeleteI also agree with Lexie, because there truly does need to be a change. People do not experience the same advantages as others within society, creating inequality. When people do not have the same advantages as others, they cannot prosper in a society led by the rich. This needs to be changed. Society is no longer about working hard, it's about the advantages you receive right out of the gate.
ReplyDeleteInequality exists in the American soceity because people want to keep the stratification of classes. America is always seen as a power-hungry country that is only concerned about getting ahead in life. Those who are on the bottom of the economic ladder want to see more equal opportunities provided for those who are not the rich and the powerful. However, as stated, there is a mix of feelings. Even though some people want there to be equality in society others do not want everyone to posess the same amount of power. Everyone wants to be in the most powerful group but they want equal opportunities to obtain this power. Also just because people underestimate who much C.E.O.s make does not mean that they are okay with this gap. Although there is a mix of feelings people still want to see change in society.
ReplyDeleteI agree with Corinne, inequality continues to exists within American to have distinct lines of economic stratification in society. society because Americans have established class lines to differentiate ourselves from others, either those who somehow feel superior to because (because of the kind of popular culture they enjoy) or those we think might feel superior to us.
ReplyDeleteI especially thought the line in the artcle, about no one minding the difference between the middle class and lower class difference, was interesting. Everyone is always looking at the difference in wealth distribution, mainly focusing on the upper class versus the rest of the classes. But no one ever looks at the difference middle and lower, which may not be nearly as significant but it is still in existence.
ReplyDeleteI completely agree with this article when it said, that CEO's incomes should be a fraction of what they are now. Being a CEO of a company is really just a title. The CEO does very little compared to the under paid workers bellow them. For example on the show, Undercover Boss, the CEO's of companies go undercover in their own companies to see what their employees go through and everyone of them is far from pleasantly surprised. If the CEO's can't work under the same hard conditions as their employees then should they really be making that three figure salary?
ReplyDeleteI agree with Bess on her point on the dived between those who except inequality and those who want it to change. If more people simply except inequality and let it run its course than the gap would widen to excessive amounts with the rich completely dominating the poor. There needs to be more people who desire change so that policies can be made to change the system.
ReplyDeleteI agree with Corrine, Americans are happy with the stratification levels. However inequality is still America because we have made it difficult for people to believe it is possible to move past the class barriers.
ReplyDeleteOnce again, this article provides reasons for why Americans do not seem extremely phased by the increasing economic inequality. One point that I found interesting mentioned in this article was the analysis of American attitudes towards the current economic state. The article stated that Americans have a "what is, should be" attitude that makes them convince themselves that their financial situation is where they are supposed to be; a result of what they have put into their work. People do not have resentment towards the rich, but rather just hope that they will be able to rise above.
ReplyDeleteI liked what Bess had to say about this article. It is very interesting to think of American citizens as being bipolar with their regards toward social inequality. It truly will be interesting to see how future polices and politics.
ReplyDeleteAfter reading this article I again ask the question, “ Who are the rich?” I believe there is such a “Volatile Mix of Attitudes” because we all experience different situations in our lives. For instance, my father came from a family of Italian immigrants with very little. His mother stayed home and took care of the children, while his father was a factory worker. Growing up his family was comfortable, meaning they always had food and clothing. They never went on vacation and all went through the public school system. My father went to college, earned a degree, and worked very hard in the business world for 15 years before deciding to “risk it all” and go for his dream of opening a store. In the beginning he worked from 7 in the morning to 11 at night seven days a week. After 5 years his business was profitable enough that he could afford to hire extra help and soon after his business was considered a success. I would say he falls in the upper end of the middle class now. Should he be overtaxed or striped of his money so someone else can have the same as him? Did they work as hard as he did? Were they willing to risk everything they had to become successful? Did he not earn what he has today? To say there should be a leveling of incomes seems impossible to me. I believe the poor should be helped and programs put into place to make sure all receive a fair education so they have the ability to go after the American Dream. What I do not believe is that you should be looked down upon or punished if you achieve that dream.
ReplyDeleteI completely agree with Bess' statement. Just because people underestimate the salary of the person does not mean they accept it. Actually, it is quite the opposite. Many of the people cannot begin to imagine a salary as large as theirs, because they are comparing it to their own. The incomes of C.E.O.'s should definitely be a fraction of what they currently now, which could help with the redistribution of wealth that was talked about in the previous article.
ReplyDeleteI really enjoyed this article. It is not often that we think about the same inequality happening in other nations. The gap between the rich and the poor, and the uneven distribution of wealth appears to be something that humans cannot escape from. The only way in which to avoid this seems to be a system of collectivization, and essentially Communism, and even in that political system there is a wealthy and privileged elite. This article caused me to strongly consider the level of democracy and equality that exists in the world.
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