Why are Americans so ambivalent about inequality?
Our country was founded on a revolution against taxation without representation. It was also founded on the concept of equality, or the proposition that everyone had the same stake in national welfare and equal rights to participate and be heard. Our founding values of freedom and equality were developed in a time period where the concepts were congruent. That is, in an economy dominated by small farmers, tradesmen and shopkeepers, the more citizens were “free” to earn their livelihoods, the more they were able to participate as equals in civil society. While these virtues were certainly imperfect, (it would be over a century before women and former slaves would be included in the legal conception of “equal”), they allowed the new country called America to build a strong nation with a prosperous middle class.
Fast forward to the 20th century. Now, rather than owning our own labor and small capitals, most of us must earn our livelihoods by selling our labor to organized capital. Moreover, these corporations are, for the most part, no longer the mom-and-pop small family businesses that once occupied the Main Streets of small towns, but huge global conglomerates that exert an inordinate amount of influence on both national governments and global extra-national regulatory organizations. Although more of us are now considered citizen-equals in the eyes of the law, how “equal” we really are often depends on our place in a corporate hierarchy—a place which often has as much to do with where we start out and who we are connected to as it does with our own skills and efforts.
By now nearly everyone is aware of the reality of stagnating real wages and increasing income and wealth inequality. While most of us acknowledge that perfect equality is not likely to occur due to the natural human variations in talent, skills, and willingness to work, most of us also recognize that the huge disparities of wealth and power that seem to be increasing year after year are way outside the bounds of what most of us would consider a “normal” distribution. That is, in spite of our historical antipathy to taxes and other attempts to infringe upon freedoms and self-determination, most of us also acknowledge that something is definitely wrong with the “system.”
Although the American public tends to be against tax increases generally, more Americans support raising taxes on the wealthy and corporations in order to regain some semblance of balance and “natural” equality. A Reuters/Ipsos poll in early fall of 2017 found that 53% of Americans strongly agree, with another 23% “somewhat agreeing,” that the wealthiest should pay higher taxes. A poll by the Pew Research Center taken about the same time also found that over twice as many Americans (52%) wanted to see higher taxes on corporations and large businesses as those who wanted to see these taxes lowered (24%). So it would seem that, although raising taxes are generally disfavored, in the case of correcting a case of inequality-on-steroids, the American public views such tax increases as desirable.
The Economic Policy Institute produced a pre-Great Recession (2006) paper titled Talking Past Each Other: What Everyday Americans Really Think (and Elites Don’t Get) about the Economy. The foundational premise was that decision-makers and policy elites were out-of-touch with how ordinary working Americans think and talk about economic issues. The objective was to find constructive ways of discussing economic issues with the public in order to foster better dialogue and inclusion in the economic policy process. The authors of the EPI study argue that conservative elites underestimate economic pessimism, ignoring or minimizing the economic anxieties of workers; while liberal elites underestimate economic optimism, and tend to address workers as helpless victims of forces outside themselves. What the EPI study found was that Americans were expressing a contradiction between an optimistic view of their own future while acknowledging concern about the economy in general.
As with many surveys, responses can be positive or negative depending on how a question is framed. For example, when international trade (i.e., globalization) was framed as being about providing a greater variety or less expensive goods, it was viewed more favorably. When it was presented in terms of outsourcing and offshoring of jobs, it was viewed more negatively. However, when discussing the economy in general, the EPI economists found that Americans were truly ambivalent, expressing an almost schizoid belief in American Dream ideology as it applied to them while at the same time acknowledging the fact of stagnating real incomes, insecure employment and growing wealth inequality—i.e., that the economy is not working for most of us— even as they report that they expect to do OK in their own situation.
In the EPI study, many people expressed generalized anxieties which mostly revolved around jobs, followed by concerns about family budgets keeping up with costs, household debt, and family stress from working too many hours. Unlike earlier anxieties, which tended to revolve around getting and keeping a job, more recent anxieties were more about getting a good paying and stable job. These results imply that Americans believe that a lack of decent jobs is a bigger issue than not enough jobs. Citing an August 2006 Pew Research poll, some 62% of respondents said there was less security compared to 20 or 30 years ago, and 59% said people had to work harder to earn a decent living. And this poll was taken prior to the collapse that precipitated the Great Recession of 2007-2009.
In America we are an optimistic culture that values self-reliance. In Bright Sided, Barbara Ehrenreich argues that relentless cheerfulness has become almost a mandatory cultural attitude. On top of this, financial struggle or failure is viewed as a source of shame, which is compounded by an ideology of “equal opportunity” and meritocracy. This cultural prohibition on complaining may serve to improve affective mood and help maintain hope for the future, but it also prevents any real questioning of the system. Thus, no matter how bad a situation may be, Americans tend to avoid viewing themselves as victims or engaging in self-pity. They are reluctant to discuss their personal situation in negative terms, because to do so would invariably brand oneself as a “loser.”
Yet, when asked more indirectly, Americans are deeply insecure, and often express this in more roundabout ways. Many Americans express their anxieties in the form of sympathetic concern for others who are having a hard time. When it comes to their own situations, people will say they are doing OK and expect to do better in the future. Conversely, when asked how they think the economy is performing in general for “people like me,” the same people will be more forthcoming about doubts and challenges. The good news here is that most of us are genuinely concerned about the welfare of others, and do not necessarily subscribe to the dog-eat-dog, everyone-for-himself attitude that seems to be rampant in American society.
In a March 2006 Economic Resilience Group survey, some 52% of respondents reported their own economic situation was excellent or good. At the same time, 61% said the economy as a whole was not improving. In the following question set—which is framed in terms of how “most people” are doing—64% of respondents chose the first statement about increasing uncertainty as coming closer to their own views, as compared to 32% who chose the second statement:
- Most people today face increasing uncertainly about employment, with stagnant incomes paying more for health care, taxes, and retirement, while those at the top have booming incomes and lower taxes.
- Our economy faces ups and downs, but most people can expect to better themselves, see rising incomes and good jobs, and provide economic security for their families. The American dream is very much alive.
Besides optimism, another American cultural trait is that of self-reliance—the “pull-yourself up by your own bootstraps” ethos. As the EPI economists state: “Just as people’s insecurity puts them at odds with the conservative elites, their self-reliance puts them at odds with liberal elites.” That is, most people say that the only reason they are optimistic about their own situation is because they know they can rely on themselves. The Economic Resilience Group survey indeed found that people had little confidence in institutions such as corporations, government programs, or labor unions. The attitude seemed to be that their own situation was OK and expected to get better solely due to their own personal efforts and sacrifices. Thus, any expressed optimism was not due to a growing economy, or that jobs offered opportunity for advancement, or because anybody would help them. There seemed to be a simultaneous recognition that the system is broken, but the only thing you can rely on is rugged individualism.
However, some people acknowledged a sense of “we’re all in this together,” expressing a desire for some level of social safety net that would allow people to realize their potential and build wealth. Indeed, many of the most popular social programs—the earned income tax credit, unemployment compensation, workers compensation, minimum wage, and social security—are those that reward work. The Economic Resiliency Group poll found that respondents were nearly equally divided between the below two statements (i.e., which statement was most true of their own views):
- In today’s economy, average Americans are on their own. Jobs and benefits are less secure, and you can’t really count on anyone but yourself and your family to get ahead.
- In today’s economy, we all face some common challenges. Jobs and benefits are less secure, so we all need to work together to make it easier for average Americans to get ahead.
Another surprise that arose in the EPI study was self-identification as working class. While the majority of Americans—both in the EPI study and generally—describe themselves as “middle class,” 31% described themselves as “working class,” a term that is hardly ever used by opinion leaders and policy elites. This suggests that people are acutely aware that they “work for [someone other than themselves], live from paycheck to paycheck, are economically vulnerable, and do not…enjoy the same status and security as others.” In another two-question set, respondents were again almost evenly divided between whether they believed the middle class was declining or whether the “middle class dream is very much alive” in America. This question again represents the dichotomy of hope in one’s own efforts along with recognition of obvious challenges.
According to the EPI economists, “Americans are working longer and harder just to stay even….With most people, the intensity, the insecurity, and the arduousness of their economic struggles are woven into the fabric of their lives—and are central to their identity….Thus, they can identify with the working poor and hardworking entrepreneurs [while at the same time] are scornful of [both] the dependent poor and the idle rich.” The EPI economists also suggest that Americans are “ideologically conservative but operationally liberal,” in that they support both the concept of free enterprise and government social support programs such as unemployment, student loans, and Social Security.
The idea of a social safety net as promoting freedom is counterintuitive in American society, although it has been around in European countries for nearly a century. As Franklin Delano Roosevelt once said, “Necessitous men are not free men.” People must be free to not only pursue meaningful and sustainable work, but to participate in civic and social life. No one is truly free when they spend all their time and energy in a struggle to survive, and their voices aren’t heard by those who rule society. In essence, some level of basic security may be necessary before individual effort has a chance to produce the desired results.
The EPI economists suggest that one way to discuss inequality is to frame problems around bread-and-butter issues that are either “good” or “bad” for workers while avoiding the socio-cultural biases. For example, rather than discussing stagnating incomes (which produce feelings of shame and failure), discuss the squeeze caused by the rising cost of living. They also suggest that rather than talking about “more government regulation,” or “programs,” discuss these in terms of either empowering or protecting people. As for inequality, perhaps the best way to frame the issue is around an effort-to-reward outcome, or even a matter of simple fairness. At the lower end, an honest day’s work should provide a worker enough to live on in reasonable, basic comfort. At the upper end, there is a point at which huge concentrations of wealth and power pose a threat to the freedoms of everyone else, either by dominance of the policy process, the ability to frame and steer public discourse, or simply by circumscribing mobility and opportunity.
Perhaps one could propose that extreme inequality is a form of “opportunity hoarding.” That is, the problem is not so much that the rich are accumulating more than they could ever consume in multiple lifetimes, but that the existence of such accumulations operates to limit mobility for everyone else. When the “system” denies opportunity and access to the majority, the resulting infringements on our freedoms are collectively more egregious than any corresponding infringements by rules or regulations required to insure a fairer and more equitable outcome. But before we can do anything to fix the problem, we have to find a way to talk about it—a way to talk about it that makes sense to working people. It is studies such as this one that will help take us there.
