Wealth Inequality in America [a video representation]
What Americans think the wealth distribution is, what they think it should be, and what it is.Economic Inequality: It's Far Worse Than You Think
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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.....
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?
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