This article originally appeared in The New York Times on March 23, 2011.
By Leslie McCall
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.
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.
- Leslie McCall is an associate professor in the Weinberg College of Arts and Sciences.