Monday, January 11, 2021

Why Do People Tolerate Income Inequality?

 by Lucia Macchia, Anke C. Plagnol, and Nattavudh Powdthavee

Many people tolerate an unequal society because they believe in the meritocracy, even though it is much harder for poor people to climb the ladder. 

High income inequality can be harmful to society. 

In 2012, the late Alan B. Krueger, who was at that time the chairman of the Council of Economic Advisors, gave a speech that highlighted income inequality as one of the major causes of social ills in American society. It was then that he first presented what is now widely known as the Great Gatsby Curve, which shows that the higher income inequality is in a society, the more difficult it is for a person to move outside the income class he or she was born into. In other words, greater inequality makes it harder to achieve the American dream of economic mobility.

Alan Krueger was not alone in his concern for what income inequality could do to those further down in the income hierarchy. The British epidemiologists Kate E. Pickett and Richard G. Wilkinson published a book in 2009, presenting cross-country evidence of how outcomes such as mental and physical health, drug abuse, education, imprisonment, obesity, social mobility, trust and community, and child well-being are worse for the majority of people in countries where income inequality is high. Their research has since been corroborated by more recent studies on the consequences of income inequality on self-reported health, violent crime, and life satisfaction.

Harvard Business Review 


Mike Norman said...

They tolerate it because there's nothing they can do about it. They don't have the power to change anything.

Andrew Anderson said...

More fundamentally, and contrary to the Bible, why is wage slavery the norm, not the exception, for citizens?

The answer is at least two-fold:
1) No limits to the concentration of land ownership, especially of productive land.
2) Government privileges for private credit creation.

Joe said...

It's more than just that people don't have the power to fight, it's that a huge portion root for their own impoverishment. They get fed a steady diet of right wing propaganda about how evil it is for workers to get paid more, how evil it is to tax the wealthy, how evil healthcare is, they cheer on cutting money for education, it goes on and on.. they think they are the big beneficiary when they get their taxes cut a couple bucks a week, they think they're big time investors when they have $75k in a 401k, and they think they'll be subject to the "death tax" despite earning $40k a year... they believe they're the only ones who work hard, they believe illegal immigrants are living high on the hog (schodingers immigrant, lazy yet stealing our jobs), they believe the US lavishly spends on foreign, while most of them misjudge the size of foreign aid by a factor or 30.. basically it comes down to how Rupert Murdock has filled the heads of a hundred million or more with complete nonsense.