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Interestingly, poorer and politically conservative participants thought that there is more mobility than richer and liberal participants.Īccording to Pew Research, most Americans believe the economic system unfairly favors the wealthy, but 60% believe that most people can make it if they’re willing to work hard. Sure enough, people think that moving up is significantly more likely than it is in reality. They asked some 3,000 people to guess the chance that someone born to a family in the poorest 20% ends up as an adult in the richer quintiles. The researchers found Americans overestimate the amount of upward social mobility that exists in society. Davidai and Gilovich wanted to know whether people had a realistic sense of economic mobility. At the core of the American Dream is the belief that anyone who works hard can move up economically regardless of his or her social circumstances. One likely reason for this is identified by a third study, published earlier this year by Shai Davidai and Thomas Gilovich that suggests that our indifference lies in a distinctly American cultural optimism. While the occupy movement may have a tangible legacy, Americans aren’t rioting in the streets. Just five percent of Americans think that inequality is a major problem in need of attention. After all, President Obama called economic inequality “ the defining challenge of our time.” But while Americans acknowledge that the gap between the rich and poor has widened over the last decade, very few see it as a serious issue. To be fair, though, we do know that something is up. These two studies imply that our apathy about inequality is due to rose-colored misperceptions. “In sum,” the researchers concluded, “respondents underestimate actual pay gaps, and their ideal pay gaps are even further from reality than those underestimates.” Again, the patterns were the same for all subgroups, regardless of age, education, political affiliation, or opinion on inequality and pay. The median American estimated that the CEO-to-worker pay-ratio was 30-to-1, and that ideally, it’d be 7-to-1.
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Then they asked people how much CEOs and workers should earn. They asked about 55,000 people from 40 countries to estimate how much corporate CEOs and unskilled workers earned. In a study published last year, Norton and Sorapop Kiatpongsan used a similar approach to assess perceptions of income inequality. An infographic video of the study went viral and has been watched more than 16 million times. And they would like to live on a kibbutz.” Norton and Ariely found a surprising level of consensus: everyone - even Republicans and the wealthy-wants a more equal distribution of wealth than the status quo. As the journalist Chrystia Freeland put it, “Americans actually live in Russia, although they think they live in Sweden. In our ideal distribution, the top quintile owns 32% and the bottom two quintiles own 25%. The Walton family, for example, has more wealth than 42% of American families combined. The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%. The average American believes that the richest fifth own 59% of the wealth and that the bottom 40% own 9%. What percentage of that pizza belongs to the top 20% of Americans? How big of a slice does the bottom 40% have? In an ideal world, how much should they have? Imagine a pizza of all the wealth in the United States. Next, they asked people to construct their ideal distributions. They asked more than 5,000 Americans to guess the percentage of wealth (i.e., savings, property, stocks, etc., minus debts) owned by each fifth of the population. In their 2011 paper, Michael Norton and Dan Ariely analyzed beliefs about wealth inequality. We have no idea how unequal our society has become. If poor people knew how rich rich people are, there would be riots in the streets." The findings of three studies, published over the last several years in Perspectives on Psychological Science, suggest that Rock is right. In a candid conversation with Frank Rich last fall, Chris Rock said, "Oh, people don’t even know.