Wednesday, November 12, 2014

Via Salon: Why America is the most unequal society in the developed world

The reason we're not more upset about the ever-expanding pay gap? We're clueless about how big it really is

Why America is the most unequal society in the developed world 
Michael Douglas in "Wall Street 2: Money Never Sleeps"
This article originally appeared on AlterNet.
The American people have spoken. But what did we really say about inequality?

At first glance, it seems that extreme inequality mattered little to the majority of voters who put pro-business candidates into office. After all, the Republicans, along with far too many Democrats, are certain to cater to their Wall Street/CEO donors. Do Americans really want an ever-rising gap between the super-rich and the rest of us?

An important study (“How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay”) by Sorapop Kiatpongsan and Michael I. Norton provides insight on why Americans aren’t more upset about rising inequality: It shows we are clueless about how bad it really is. Their analysis of a 2009 international survey of 55,187 people from 40 countries found that when it comes to understanding the severity of inequality, we’re the most clueless of all.

Americans are virtually blind to the growing gap between CEO pay and the pay of the average worker. As the chart below shows that gap has increased dramatically. In 1965, for every dollar earned by the average worker, CEOs earned $20. By 2012, that gap mushroomed to 354 to one.

For every dollar earned by an average worker, the CEO gets..
 Photo Credit:
Source: AFL-CIO, Hargreaves, Mishel & Sabadish

But, when asked in the survey, Americans grossly underestimated this gap. Instead of 354 to 1, the Americans in representative survey think it is only 30 to 1. When asked what the ideal pay gap should be, Americans say that a fair gap would be about 7 to 1.

More amazing still, the survey results, combined for all countries, show that the misperception of inequality doesn’t significantly vary by age, gender, income, political leanings or education.

Make the jump to read the full article here

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