Why Do America's Poor Oppose a Redistribution of Wealth?
As inequality spreads, one would think that support for sharing economic gains would increase. So why is it fading?
With all the outrage about growing economic inequality one might think that there’d also be growing support for wealth redistribution—policies that include hiking taxes for the wealthy or increasing aid to the poor. But a new working paper from NBER suggests that by and large, America’s desire to see wealth spread around more evenly hasn’t really increased that much at all in the past 30 years. And in fact members of some of the most vulnerable economic groups are actually less supportive of efforts that would boost the economic standing of the less well-off than they once were.
The topic of economic inequality has been inescapable in recent years. It’s become a talking point for everyone from famed economists to President Obama. And with good reason: The gap between the nation’s wealthiest and everyone else has been growing. And in the wake of an economic crisis that left scores of Americans unemployed and vastly devalued their largest assets, the rapid recovery of the wealthy as so many continue to struggle can feel painfully unfair.
In the face of such division, Vivekinan Ashok and Ebonya Washington of Yale University and Ilyana Kuziemko of Princeton, the authors of the NBER study, attempted to figure out if a widening economic gap had caused Americans to become more supportive of efforts to create a more equal distribution of wealth in the country. They plotted out how Americans responded to questions about wealth redistribution based on age, gender, and race over the past few decades. Though inequality had grown, Americans hadn’t become any more supportive of using redistribution to fix the problem. For those over the age of 65, support for redistribution has actually waned as inequality has risen. And for black Americans, a group that is overall more supportive of redistribution than their white counterparts, desire for such efforts also decreased.
In theory, this shouldn’t happen. Growing economic inequality results in more people falling below the mean-income level in the country. In turn, the demand for redistribution should rise, especially among these more economically vulnerable groups who tend to benefit the most from policies aimed at increasing equality.
So why did blacks and the elderly have an increasingly negative view of redistribution? It’s not because the two groups have improved their economic standing, or because they had become more conservative in their views about economic policy or political affiliation, researchers found. Instead, it was about how they saw their position in society, and how they thought that redistribution would affect it.
For example, over the years, black Americans have become slightly less supportive of redistributive efforts while white Americans have become slightly more supportive. The number of black Americans who say that getting ahead is based on luck has decreased, while those saying that success is largely tied to hard work has increased. “Blacks view the economic system as becoming increasingly fair and are decreasingly supportive of government targeted aid based on race,” the authors write. And they say that this shift in views accounts for about 45 percent of the decreased support for wealth redistribution among the group.
The authors findings suggest that maybe more black Americans have begun buying into bootstrap theories, that working harder will ultimately yield economic equality. They are left somewhat baffled by the responses of black respondents. And rightly so. While it’s true that black Americans have made some educational and societal gains, the wealth gap between blacks and whites is at its highest level since 1989, according to Pew Research. And other important indicators of economic health including unemployment, wages, and homeownership also remain much more dismal for black residents than for their white counterparts.
But the study’s findings are telling, showing that there can be significant differences in how people perceive their place in the world compared to what data shows about their place in the world. And that gap, too, can be difficult to overcome.