The Rising Risks of Rising Economic Inequality: Do Americans Care?

The Rising Risks of Rising Economic Inequality: Do Americans Care?

...

Inequality is Rising, but Don’t Americans Still Think Inequality is a Good Thing?³

Before we consider Americans’ views of growing inequality, and all that it encompasses, we first have to understand their orientation toward inequality more generally. Here the distinction between inequality in principle and inequality in practice is a critical one. While Americans’ espouse principles of equality in the political realm (e.g., one man, one vote), they are less supportive of principles of complete equality in the economic realm. Indeed, economic inequality is viewed as fair because it rewards effort and talent, and it is viewed as necessary because it provides incentives for achievement and innovation, delivering greater prosperity to the entire society. As long as individual effort and talent are the only determinants of success, inequality in where people end up is considered just.⁴

...

Because it is possible that Americans would accept some degree of unfairness if they think it is necessary to maintain overall growth, economic conditions that seem unnecessary as well as unfair are the most likely to unsettle Americans’ faith in the American Dream.

This is precisely where the privatization of risk, and many other crucial elements of the overall rise in inequality, come into play. The increasing privatization of risk is a concrete example of inequity in practice. This matters because social scientists have long known that the term “inequality” itself is a very ill-defined and abstract one, especially when referring to income inequality, as opposed to racial or gender inequality, which at least involve differences between relatively clearly defined social groups (i.e., men and women, blacks and whites, etc.). As a result of the difficulty of mapping income onto real social groups, researchers do not use the term inequality in survey questions but instead ask about “differences in income” between “the rich and the poor” or “the haves and the have-nots,” and so on. While an improvement, even these are imprecise and open to a wide variety of interpretations.

In contrast, inequality-related issues that are either more accessible or more directly connected to the everyday experiences of individuals—failing pension and health plans for the middle class while executives enjoy premium coverage and stock market windfalls that can secure them in the event of a catastrophic illness, a temporary bout of unemployment, or old age—can better communicate the message of inequitable economic growth. But the issue must be linked to a framework of inequality, in which a few are gaining while the majority is losing out, in order for it to be deemed both unfair and unnecessary. Otherwise, if everyone is subject to the same cutbacks, then a little belt-tightening for everyone can be seen as a necessary and shared sacrifice on the road to greater prosperity. ...

...

agreement that inequality continues to exist because it benefits the rich ranges from a low of 49.4 percent in 1987 to a high of 63.4 in 1996, and agreement that large disparities in income are unnecessary for prosperity ranges from a low of 38.2 percent in 1987 to a high of 57.9 in 1996.

...