How Income Inequality Shapes Our Lives

income inequality

income inequality: the unequal distribution of income and opportunity between different groups in a society

How do our perceptions of our own wealth shape our lives?

Or more profound questions: Why do we tend to compare ourselves to people who have more than us, rather than to those who have less than us? How does income inequality affect our lives?

This was the subject of a terrific episode I recently listened to on one of my favorite radio programs on NPR... Hidden Brain hosted by Shankar Vedantam. The host interviewed Keith Payne, author of the thought-provoking book The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die.

The author told the story of when he was in the 4th grade and there was a new cashier at the end of the lunch line. The cashier asked him for $1.25, but he had never paid for lunch before. An awareness swept over him that some classmates had been paying for lunch and some had not. He had never thought about it before.

The recognition that he was one of the “poor kids” who didn’t pay for lunch was devastating to him. He was not any poorer at that moment than he was before, but he FELT POORER, and it affected him deeply. His perspective changed forever.

That’s the power of income inequality to mentally, and physically, impact our lives.

Inequality divides us... drives wedges between different camps... different tribes... haves and have-nots... right and left... more deserving and less deserving... right and wrong... feeling less trustful of one another... feeling more stressed, less healthy and less happy.

In modern, developed societies, inequality is not so much how much money we have. It’s more about how we perceive where we are in relation to others. Being poor matters much less than feeling poor.

How do you feel when you board a plane where the 1st-class passengers board first and you have to pass by them with their oversize leather seats and cocktails, while you head back to the rear of the plane, your cramped seat and peanuts if you’re lucky?

Studies of air rage found that planes with a 1st-class cabin saw almost 4 times the air rage incidents compared to planes that did not have a 1st-class cabin... and a level of rage equal to a 9-hour delay in departure! Air rage was twice as likely on planes that boarded from the front sections first compared to planes that boarded the rear seats first.

This is not about haves and have-nots. Most of the people on that plane just paid hundreds of dollars for their non-1st-class ticket. These aren’t have-not poor people.

It’s human nature to compare ourselves to others...

But it can generate levels of psychological stress that can impact both our mental and our physical well-being. Feeling “less than” is depressing. It can generate a desire to blame. It can generate irrational feelings that we “deserve” more. It can motivate looking for reasons, often bizarre reasons like conspiracies and perceived biases as to why we feel “lesser.” It can dramatically affect our perceptions of justice and fairness.

Ever notice that we almost universally compare ourselves with those higher on the “success” ladder rather than on those below us? Why is that? It is human nature to aspire higher. We are conditioned throughout our lives by parents, teachers, employers, media, etc. to grow, to reach higher, to aspire. So we are continually focused on the rungs of the ladder above us. And falling short, failing, not reaching higher rungs can dominate our focus.

Yet even a brief focus on the rungs below us can inspire feelings of gratitude for how much we DO have, pride about how far we’ve come, and generosity to those less fortunate.

A core reason why feelings of inequality dominate our lives is because inequality is today greater than it has been in generations.

The richest 85 people in the world have a greater wealth than the poorest 3.5 billion people combined. In America the richest 1% control more than 20% of all income. And the gap is rapidly getting larger. The Covid-19 era has seen that gap grow exponentially.

Over the last 50 years, the rich have gotten dramatically richer, while the middle class and the poor have essentially not budged. The bottom fifth are pretty much where they were in 1967. They just feel poorer by comparison. It’s like being on a stationery train next to a train leaving the station. It feels like you’re going backwards.

Feeling poor shortens life as much as being poor.

Why is that? Why does the size of my neighbor’s house affect my stress hormones? Why does my financial insecurity lead to foolish decisions that generate even greater insecurity? Why would the average house in America be 2600 square feet, yet that family can’t deal with a $400 emergency?

Why does the working class today have little trust in “investing for the future?” Why does perceived poverty create stress as strong as physical threats? Why do unequal societies tend to be more religious? Why do inequalities in the workplace affect performance so much? Why do high levels of inequality make the middle class feel left behind? What motivates me to think others who disagree with me are morons or idiots rather than as good people with different opinions?

How can we get off this accelerating treadmill of social comparison?

I strongly urge you to listen to the 30-minute Hidden Brain podcast and read Keith Payne’s book (the links are above). In fact, every politician, government official and corporate leader in America should be required to do the same.

Unless we become more self-aware of the real-world, real-life impacts of inequality, our government policies and corporate inequities will continue to widen the gaps between us... creating chasms so wide they will increasingly be less possible to bridge.

What can we do about it?

Each of us has a responsibility to be more self-aware about how inequalities shape our thinking, affect the world we live in and will be inherited by our children and grandchildren.... and what we can do about it.

Think about it.

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