Perceptions Of Inequality

Peter Skilling

In the last decade or so, the issue of economic inequality has achieved a high level of academic, media and public awareness. One notable theme in this recent attention has been the repeated representation of current high levels of inequality as bad for everyone. (There are notable exceptions of course: witness the explicitly adversarial framing of the Occupy movement’s “we the 99%” versus the “privileged 1%” messaging.) It has been said that inequality is associated with widely-experienced social problems, such as increased levels of crime and health problems; the erosion of social cohesion and trust, and the weakening of innovation and economic growth. It is telling in this regard that recent warnings against high levels of inequality have come not just from the “usual suspects” in left-leaning groups, but also from such non-partisan organisations as the OECD, the United Nations, the International Monetary Fund and the World Economic Forum.

Despite these claims of inequality’s negative consequences for societies-as-a-whole, and despite opinion polls demonstrating significant public concern, the public has seemed less willing to support parties and policies that promise to address inequality. During last year’s election campaign in New Zealand, for example, surveys suggested that the public saw the gap between rich and poor as the biggest issue facing the country. On election night, however, the parties that had campaigned most stridently on these issues –Labour and the Greens, for instance – did very poorly, their combined vote easily eclipsed by a party that had consistently downplayed the issue. In this Briefing Paper, I ask how people think about the matrix of issues related to inequality (issues such as taxation, welfare, the role of government and the extent of individual responsibility). Why does concern over inequality not translate into support for parties who promise to focus on reducing it?

Part of an answer, of course, is that people do not vote based only on a single political issue. Or, necessarily, on the basis of a bundle of issues. Questions of politicians’ personality, and perceptions of their integrity and competence are also important in voting decisions. Further, it is not accurate to imply that only parties of the centre-left proposed policies to address inequality. What is true is that these parties (Labour, Mana, the Greens) proposed a more traditional leftist approach that relied on the redistributive mechanisms of taxation, welfare transfers and increased wages for low paid workers. The National and ACT Parties, by contrast, framed the issue in individual terms. If inequality was a problem, it was a problem of individuals under-performing in terms of skills, training and employability. The proper response, logically, would be for those individuals to take more responsibility for their own educational and employment outcomes.

Surveys consistently show that a majority of New Zealanders would prefer to live in a more equal society. Survey questions, however, tend to be posed in abstract and decontextualized terms. Surveys rarely ask, for instance, why greater equality is seen as desirable, what mechanisms are seen as necessary to achieve greater equality, or what consequences might follow from this pursuit of greater equality. Yet these secondary questions are crucial in understanding how people really think about the issue. It is interesting to note that while 62% of respondents to a 2009 survey felt that income differences in New Zealand were too large, only 42% of the same respondents thought that it was the government’s responsibility to reduce those differences (see page 23 of this journal). And, in 2005, only 26% supported the idea of redistributing wealth through increased taxation. We might say that most people prefer a more equal society if all other things are held constant. But all other things are never constant. Addressing inequality involves a host of trade-offs, many of which (especially any proposal to increase tax levels) trigger strong reactions in many people.

To explore the question of how people think about inequality in the context of complexity and contestation, last year I convened a series of focus groups, comprised of members of the public holding a wide range of opinions. How would people explain and defend their opinions in the presence of divergent views? In keeping with survey results, most focus group participants – when asked individually – expressed a preference for a more equal distribution of incomes (better wages for the low-paid; restraint in executive compensation). In the subsequent group discussion, however, these preferences were marginalised by the view that, while a more equal distribution might sound nice, it was likely not feasible given the “realities of the market”. Firms, it was said, facing constant pressures to remain viable, could not be expected to pay more. Low-paid workers, it was said, should not complain about their low-pay but should instead take responsibility for enhancing their attractiveness in the labour market.

What was most interesting here was that while this “market reality” trope was typically advanced by only one person in each group, it seemed able to over-ride a majority preference for greater equality. Even those participants with very strongly-held egalitarian commitments found it difficult to argue against this appeal to the constraining power of market forces. In a way, this is unsurprising. Potential counter-arguments (that “the market” is a human construct that humans can reformulate if they wish to; or, perhaps, that the free-market is not a neutral arbiter of value but is systematically biased in favour of certain groups) are complex, and no longer commonly heard within society. Just as importantly, believing that our existing economic system is fundamentally unjust comes with a psychological cost.

Social psychologists such as John Jost use the term “system justification theory” to express the observation that people are driven to accept and justify the existing social order. As Lissa Johnson explains, ‘believing in the existing social, economic and political order helps people to feel safe and secure (existential needs), that life holds coherence and meaning (epistemic needs), and connected to others through a sense of shared reality (relational needs).’ It is, in this context, psychologically easier for people to see inequality as an individual failing than as a symptom of a fundamentally broken system. If the basic political and economic systems of our society are accepted as fair, it implies that the distributional outcomes they generate are just: that people get more-or-less what they deserve. Doing well is a just reward for individual effort and ability within a fair system; failure is the natural consequence of individual shortcomings.

The notion of system justification theory can help to explain why many people are concerned about inequality, yet reject calls to address inequality by altering the basic economic and political systems of society. It also poses challenges for those groups who argue that inequality requires resisting and altering these systems. As Johnson notes, presenting ‘the reality of a serious social problem … creates system threat’, which is likely to provoke a ‘system justification’ in many people, and a resistance to calls for fundamental social change.

Categories: Inequality
Peter Skilling
About the author

Peter Skilling

Senior Lecturer - Auckland University of Technology
Peter Skilling is a Senior Lecturer in Management at the Auckland University of Technology. His research interests include the challenges facing the transition to a more sustainable economy, and the uses of political language. He is currently working on a three-year research project - supported by the Marsden Fund of the Royal Society of New Zealand - that explores the diversity of public attitudes towards economic inequality.