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Feeling—Not Being—Wealthy Cuts Support for Economic Redistribution

A new study suggests it's relative wealth that leads people to oppose taxing the rich and giving to the poor.
(Photo: 76657755@N04/Flickr)

(Photo: 76657755@N04/Flickr)

Psychologists and political scientists have puzzled for some time about why the same Americans who favor greater economic equality don’t also support the kinds of redistributive economic policies that would get them there. Perhaps, some say, it’s political ideology. Perhaps it’s some kind of twisted self-interest. Or perhaps it’s because of how easy it is to make someone feel relatively poor or relatively well-off.

Conventional wisdom holds that much of the opposition to redistributive economic policies—policies that emphasize taking some money from the wealthiest people and using it to provide services for everyone, including the poor—stems either from ideology or economic interest. Unfortunately for the conventional wisdom, neither is a very good match to reality. Political scientists have known for decades that most people don’t know enough about politics to have anything like an internally consistent ideology—in fact, one influential school of thought argues that most Americans’ political opinions are essentiallyrandom. Meanwhile, economic theory suggests that in a society with such economic inequality as ours, nearly everyone should support redistribution, yet that clearly isn’t the case.

"H.L. Mencken once quipped that a wealthy man was one who earns $100 a year more than his wife’s sister’s husband."

So what is it then? While it’s not a complete answer, Jazmin Brown-Iannuzi and colleagues at the University of North Carolina-Chapel Hill say that subjective social status, rather than actual financial well-being, is likely playing a role. They backed that up with a series of studies they conducted online in which they carefully manipulated how people thought about their own social status.

In one experiment, the researchers asked 152 participants to answer a series of questions about their income, spending habits, and so on. After answering the questions, the subjects got feedback about how their discretionary income compared with that of other similar people using a “Comparative Discretionary Income Index.” The team next asked participants to place themselves on a 10-step ladder indicating what they thought their social status was. Finally, each person answered a series of questions gauging their support for redistributive economic policies.

The CDI Index participants got was, of course, fake, but it did have a real impact. People who got scores indicating they were higher status than their peers placed themselves a rung higher on the social status ladder, and those who placed themselves higher on the ladder supported redistributive policies less, even after controlling for actual indicators of social status, such as education and income, and political leanings.

“We suggest that social comparisons are critical for understanding attitudes toward economic inequality, as differences in relative status can contribute to differences in political preferences,” the authors write in Psychological Science. “H.L. Mencken once quipped that a wealthy man was one who earns $100 a year more than his wife’s sister’s husband. Attitudes toward the distribution of wealth in society may follow the brother-in-law rule as well.”