Why the Wealthiest 1 Percent Are So Much Richer Than You (Op-Ed)

Michael Kraus, University of Illinois, Urbana-Champaign   |   April 02, 2014 01:46pm ET

A study found that drivers of upper-class cars cut off other cars and pedestrians more often than those cars indicating lower socioeconomic status. Credit: Deklofenak | Shutterstock View full size image

Michael Kraus is an assistant professor of social-personality psychology at the University of Illinois, Urbana-Champaign, and director of theChampaign Social Interaction (CSI) laboratory. His research focuses primarily on issues of social hierarchy, economic inequality and economic mobility. Kraus contributed this article to Live Science's Expert Voices: Op-Ed & Insights.

Last December, U.S. President Barack Obama called the widening income gap between the richest and poorest in American society "the defining challenge of our times." This sudden turn in economic policy by the President surprised me — politicians rarely talk openly about income inequality, because fixing the problem is a complex and polarizing issue. So it was interesting to hear, in the 2014 State of the Union Address, President Obama detail several specific policy goals to help reduce the income gap in America — such as raising the minimum wage — that would, he claimed, "build new ladders of opportunity into the middle class."

Economic inequality between the wealthiest 1 percent of Americans and the rest of society has deepened since the 1970s, and government, since that time, has largely run in blissful unawareness of this widening gap between the rich and poor. This alarming political inaction when it comes to economic inequality should raise concerns for many Americans, because research indicates the rising income gap is measurably harmful to all Americans and not just the poorest sectors of society.

For example, large scale surveys conducted by Shigehiro Oishi and colleagues at the University of Virginia, and reported in the journal Psychological Science,show reduced reports of happiness and general trust in Americans during years where economic inequality is higher, relative to years when inequality is lower. As well, in a review of studies examining health in societies that differ in economic inequality, published in Social Science and Medicine in 2006, roughly 70 percent of studies suggested that societal health worsens as economic inequality deepens. When economic inequality rises, society suffers.

In the face of this compelling evidence suggesting that economic inequality is harmful to all Americans (including all voting Americans), why might economic inequality, somewhat paradoxically, continue to increase in American society, largely unchecked by government policy? While there are a number of economic forces at work that contribute to economic inequality in society, a still more powerful force for maintaining inequality might be the psychological motivations of individuals.

First and foremost, it is uncomfortable for many Americans to come to terms with the reality that we live in a society that rewards people unequally for their hard work, ability, and talent. Such realities fly against any beliefs individuals have about the promise of the American Dream of equal opportunity. This might be why, in a 2011 Perspectives on Psychological Science article, Mike Norton and Dan Ariely found that Americans are blissfully unaware of just how unequal America is in terms of wealth distribution.

A second barrier impeding reduction, or even acknowledgement, of widening economic inequality in society arises from the self-serving motivations of those at the top of society's hierarchy. Over the last decade, my colleagues and I have examined the influence of one's perceived social rank in society, relative to others, on beliefs about the structure of society. Across more than a dozen studies, we have found that high-ranking individuals, on average, choose self-preservation. Specifically, people who perceive themselves as having the most money, the best education and the best jobs tend to protect their own lofty positions in society at the expense of others they deem less deserving.

For example, in a 2009 study published in the Journal of Personality and Social Psychology (JPSP), we found that high-ranking individuals, when presented with an actual picture showing rising economic inequality between the wealthiest Americans and the rest of society, tended to blame this pattern on the hard work, talent and skill differences between those wealthy individuals and the rest of Americans. In more recent research, a study published with my colleague Dacher Keltner of the University of California, Berkeley, in JPSP just last year found that these same high-ranking individuals tended to believe that differences in social class were rooted in essentialist beliefs — that is, beliefs that social classes represent natural differences between individuals that are based in biology and genes. Rising economic inequality for high-ranking individuals seems to be the result of better genes expressing themselves in positive economic fortunes.

These findings should call into question any beliefs in noblesse oblige — elevated rank does not appear to obligate wealthy individuals to do good for the benefit of society. Rather, high-ranking individuals respond to their lofty positions, on average, by prioritizing self interest over the suffering and needs of those less fortunate. It is important for American voters to realize that our representatives in the U.S. Congress are not immune to these rank-based psychological patterns of economic self-interest: Earlier this year, Bennett Callaghan of the University of Illinois and I published a paper in the journal PLoS ONEexamining the legislative habits of members of the U.S. House of Representatives in 2012. We focused our analysis on legislation that directly increases economic inequality in society by, for instance, providing tax reductions for corporations, or that directly decreases inequality by raising the minimum wage, for example. We then compared these legislative habits to the reported average wealth of members of Congress from 2009 to 2011.

In these data, we found that members of Congress who were wealthier were more likely to act for the interests of the wealthy, by sponsoring legislation that increases economic inequality.

This result was particularly true of Democrats — whereas Republicans were uniformly likely to sponsor legislation increasing economic inequality, wealthy democrats were more likely to sponsor such legislation than their poorer counterparts. Moreover, these results were the same if we looked at other demographic characteristics of members of Congress that were related to social rank: Whereas all Republicans tended to sponsor pro-economic-inequality legislation, male and white Democrats were more likely to sponsor such legislation than their female and non-white counterparts. Even among these elite elected officials, whose job it is to specifically serve everyday Americans, we see that high rank elicits patterns of self-interest at the expense of people at the bottom of the economic ladder.

Combating the rising tide of economic inequality promises to require members of Congress — whose median wealth hovers near $5.5 million annually — to work against their own self-interest for the benefit of all Americans. I don't know if economic inequality is really the "defining issue of our time," but if it is, I'm glad our political leaders are (finally) starting to pay attention.

Michael Kraus blogs regularly about links between psychological science, current events and pop culture at Psych Your Mind and regularly argues (usually respectfully) with other scientists on twitter (@mwkraus).

Follow all of the Expert Voices issues and debates — and become part of the discussion — on Facebook, Twitter and Google +. The views expressed are those of the author and do not necessarily reflect the views of the publisher. This version of the article was originally published on Live Science