4 things you didn’t (but should) know about economic inequality
It s not surprising that the leaders of the Democratic Party have been making a big deal about rising income and wealth inequality in America, but when Republican Party leaders and presidential hopefuls are using it in their speeches and policy proposals, you know it s an issue that s on Americans minds.
Despite the fact that there is a growing consensus that inequality is important, there is little agreement on how it affects average Americans. This is partly because more research needs to be done on the topic. But it s also because the research that has been done has been hijacked by those with political agendas in order to further policy goals that existed long before we ever thought that America was divided between the 99% and the 1%.
Increasingly, economists are publishing work that can help us understand how individual Americans experience the phenomenon of growing income and wealth inequality. Here are four facts about income inequality that you should know:
1. Americans don t like the way wealth is currently distributed in this country. But they dislike wealth redistribution policies even more.
You may have come across a viral video published in 2012 that highlighted large differences between what Americans think income inequality should be, what they think it is, and what the actual distribution of wealth is in America. The video, based on a 2011 study by economists Michael Norton and Dan Ariely, shows that Americans have a very poor understanding of how unevenly wealth is distributed in America and would prefer a system that is much more egalitarian.
The video has been viewed an impressive 16.5 million times and was cheered by progressive websites all over the country because it fits into the notion that if Americans simply understood the extent of wealth and inequality in this country, they d support wealth redistribution. But study after study show that Americans, even as they recognize income and wealth inequality has grown in America, do not support significant levels of wealth redistribution. Sure, there s evidence, like the last presidential election, that they ll support higher income taxes on the rich, but there is no evidence that they would support the levels of redistribution required to create a country in which wealth is distributed at the level that the Norton and Ariely paper says is ideal.