Americans Have No Idea How Bad Inequality Really Is

While many/most on the right seem to just want to gloss over the whole economic inequality issue, or denigrate those with the insolence to bring it up in polite company, the reality is there, it's huge and, I think, represents a serious long-term threat to our economic and social stability and well being.

Quote:

If Michael Norton’s research is to be believed, Americans don’t have the faintest clue how severe economic inequality has become—and if they only knew, they'd be appalled. Consider the Harvard Business School professor’s new study examining public opinion about executive compensation, co-authored with the Chulalongkorn University in Bangkok’s Sorapop Kiatpongsan. In the 1960s, the typical corporate chieftain in the U.S. earned 20 times as much as the average employee. Today, depending on whose estimate you choose, he makes anywhere from 272 to 354 times as much. According to the AFL-CIO, the average CEO takes home more than $12 million, while the average worker makes about $34,000. In their study, Norton and Kiatpongsan asked about 55,000 people around the globe, including 1,581 participants in the U.S., how much money they thought corporate CEOs made compared with unskilled factory workers. Then they asked how much more pay they thought CEOs should make. The median American guessed that executives out-earned factory workers roughly 30-to-1—exponentially lower than the highest actual estimate of 354-to-1. They believed the ideal ratio would be about 7-to-1. “In sum, respondents underestimate actual pay gaps, and their ideal pay gaps are even further from reality than those underestimates,” the authors write.

(emphasis mine)



Here's a related table:

Quote:

How much should CEOs earn compared with the average low-skill worker? Researchers Sorapop Kiatpongsan and Michael I. Norton asked 55,000 people around the world how much they thought CEOs in made compared with the average low-skill factory worker, and how much they should make. Here are the estimated, ideal, and actual ratios. All ratios are to 1, so 93:1, 40:1, etc. Country Actual ratio of CEO to worker pay / What subjects thought was the ratio / What subjects said would be the ideal ratio Australia 93 40 8.3 Austria 36 12 5 Czech Republic 110 9.4 4.2 Denmark 48 3.7 2 France 104 24.2 6.7 Germany 147 16.7 6.3 Israel 76 7 3.6 Japan 67 10 6 Norway 58 4.3 2.3 Poland 28 13.3 5 Portugal 53 14 5 Spain 127 6.7 3 Sweden 89 4.4 2.2 Switzerland 148 12.3 5 United Kingdom 84 13.5 5.3 United States 354 29.6 6.7

The Good Ol' U.S. of "Murica had by far the highest actual ratio of CEO to worker pay -- 354:1, yes, 3-5-4:1 -- even though people thought it was less than 1/10th of that and the the ideal should be about 6.7:1, about 2% of the 354:1 ratio.



An earlier study by Norton basically echoed the above and found that views actually didn't vary too much by political party or gender, and that people across the political/gender spectrum prefered a far more equitable distributions of wealth than the actual reality:







Of course, what, if anything, to do about this gaping wealth distribution chasm?

Quote:

It’s one thing to talk about fairness in the abstract; it’s another to agree on policies that would address it. Gallup, for instance, has consistently found that a solid majority of Americans believe wealth should be distributed more evenly. But fewer support the idea of imposing heavy taxes on the rich in order to do it. The Pew Research Center reports that 45 percent of Republicans already believe the government should at least do something to reduce inequality. But good luck finding GOP voters who are begging for a more robust welfare state.