By Sam Pizzigati
Billionaire Warren Buffett is still paying taxes at a lower rate than his secretary. Starbucks CEO Howard Schultz last year collected $117.5 million for his labor. The life expectancy gap between Americans of affluent and modest means has widened by five years over the last three decades.
Economic inequality in America hasn’t been this stark since the 1930s. But back then Americans by the millions took to the streets in protest. Why aren’t millions of Americans out protesting today?
Americans aren’t loudly protesting, conservatives argue, because they really don’t care if some people become phenomenally richer than others.
Many Americans, progressives counter, simply don’t yet understand how staggeringly unequal the United States has become. With more awareness, their argument goes, would come more resistance to our unequal social order.
In 2011 a group of four top-flight academic researchers — including Emmanuel Saez, the world’s top expert on super-high incomes — decided to test this absence-of-information thesis. They prepared a detailed survey instrument and spent over 18 months quizzing a random sample of 5,000 Americans.
Americans aren’t protesting inequality, conservatives argue, because they don’t care about it.
These researchers have just published their findings, and on at least one key question they probed — can information change attitudes about inequality? — their survey results do offer a definitive answer. Information can change attitudes.
The information the researchers shared with the thousands of Americans they surveyed compared America’s current distribution of income to the nation’s more equal distribution in 1980. Their interactive survey also had participants discover for themselves what they would be making today if the nation’s “economic growth since 1980 had been evenly shared across the income distribution.”
Another survey presentation detailed how the incomes of average Americans, over the past century, have grown the fastest during those periods when America’s richest paid taxes at higher rates than they do today.
The impact of all this information? The share of survey participants who felt that inequality poses a “very serious problem” rose a robust 40 percent.
But this significant increase in awareness, the researchers also found, did not automatically translate into appreciable new support for public policies that could narrow America’s income and wealth divide.
The increase in the share of survey participants supporting higher taxes on millionaires, for instance, didn’t come close to matching the 40 percent jump in the number of participants feeling that inequality poses a significant danger.
More information about inequality, researchers say, can change how people feel about income gaps.
So what’s going on here? Why isn’t more concern about inequality generating more support for government policies that can narrow inequality?
One factor: Exposure to more information about inequality, the researchers found, “also makes respondents trust government less.” In effect, quips commentator Tim Noah, many Americans feel that a government “incompetent enough” to let inequality fester isn’t going to be competent enough to fix it.
But another dynamic — economic insecurity — factors in as well. The researchers found that the study participants with the lowest incomes turned out to be the most resistant to more redistributive government policies, particularly to programs that help the poor.
What explains this counter-intuitive outcome? A phenomenon known in academic circles as “social-desirability survey bias” could be at play here. Low-income study participants might have feared they would come across as “selfish” if they proclaimed their support for programs that help low-income people.
Or somewhat darker motives, the researchers suggest, could be at work. Other research, they note, has posited that status concerns can distort attitudes at the bottom of the economic pyramid. No one wants to be “last.” These status concerns may leave some “low-income individuals wary of certain redistributive policies, lest they differentially help the group below them.”
Economic inequality tends to erode basic trust in government as an agent of change.
Add racial and ethnic differences into the mix, and you have the kindling for social combustion, a kindling dominant elites have regularly fanned, over the years, to divert attention from their dominance.
The researchers behind this new study — and the early egalitarian-minded commentators on it — seem distinctly bummed by the study’s results. Only in one area, the research reveals, did more information seem to lead to much more support for greater action against inequality. That one area: the estate tax.
Many Americans, the study found, have no idea that the federal estate tax only applies to multi-million dollar fortunes. These Americans quickly become eager estate tax advocates once the fog of misinformation lifts.
But even here the researchers can’t hide their disappointment. The estate tax, they lament, “may be a special case of an issue where voters are very misinformed and yet not emotionally attached to their position due to ethnic or socioeconomic stereotypes.”
A little historical perspective might help here. If these researchers had conducted their work back in 1928, a previous high point in American income inequality, they would have encountered a quite similar social landscape: a massive divide between the rich and everyone else coupled with little sign of mass resistance.
Yet less than a decade later we had resistance everywhere. The American public, pundit Walter Lippmann would write in 1937 after the death of John D. Rockefeller, “has turned wholly against the private accumulation of so much wealth.” In workplaces the nation over, Americans would be challenging plutocratic power, often uniting across racial and ethnic lines.
Out of this ferment would come a much more equal United States. In 1928, no researchers could have seen that future coming. Researchers today, even with all their carefully calibrated survey instruments, can’t see the future either.