The 1% isn’t that bad one-on-one, according to a new consumer study.
Despite the popularity of the talk about the ultra-rich over wealth inequality, people are actually quite tolerant when it comes to individual billionaires who belong to the upper echelon of society.
That’s according to a new study by researchers at Ohio State University and Cornell University, which was published in the journal “Proceedings of the National Academy of Sciences” this week. Eight separate studies were conducted with a total sample of 2,800 participants. The bottom line: People love individual billionaires, but they don’t like the billionaire club.
“The success of an individual at the top of the economic ladder is likely to be attributed to their creativity, foresight and effort,” the study authors concluded, “while the success of the ‘rich “,” 1% “or the economic elite are more likely to invite reflection on the privileges and societal structures that work to their advantage.
For example, one study found that people were more in favor of wealth tax when they thought of a group like the richest 1% paying the highest tax rate, and less likely to pay it. support when they thought a wealthy individual would pay more. In other words, tax the rich – but let a favorite billionaire like Tesla TSLA,
founder Elon Musk, former Amazon AMZN,
CEO Jeff Bezos or Microsoft MSFT,
founder and philanthropist Bill Gates alone.
“The way we express and communicate information about inequalities is important. Talking about the ‘1%’ is going to elicit a different reaction than personalizing it by talking about someone at this exclusive club, ”study co-author Jesse Walker said in a commentary. declaration.
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“And as consumers, we have to be careful about how we react to news about the rich and inequality,” he continued. “The way this information is presented to us can influence us, even our political preferences, in ways that we don’t always consciously realize. “
For example, another study included in the report found that people had strong opinions about what a CEO should earn compared to an average employee, based on how that information is presented and presented to them.
Participants in one group read that the salaries of CEOs of America’s 350 largest companies have risen from 48 times that of the average worker in 1995 to 372 times today. The other group read about a specific company, Avnet, and its CEO, whose salary had also fallen from 48 times that of the average worker in 1995 to 372 times today.
While participants from both groups thought the ratio of CEO salary to average worker salary should be lower than they were told, those who read Avnet in particular agreed with this significantly higher ratio. . As a result, people are “more tolerant of the lavish pay levels of those at the top and the heightened inequality that such pay has created when it comes to an individual CEO rather than CEOs as individuals. that group ”, conclude the researchers.
Another study in this report looked at how the media can change people’s perceptions of wealth and inequality. Two groups saw different covers of Forbes magazine featuring billionaires. One group saw coverage featuring seven of the richest people in the world. (Familiar faces like Gates and Oprah Winfrey were traded for lesser-known billionaires to eliminate any biases people might have towards them.) The other group saw a cover that featured only one of the seven billionaires.
And after reading a brief description of the billionaires on the cover, participants were asked what they thought of the person, and to rate how much they deserved their wealth, as well as to explain how they felt the billionaires made their money. Those who showed individual billionaires were more likely to attribute their wealth to talent and hard work, and their comments were less angry overall than those who got the group’s cover photo.
“The people in our study were clearly more upset by the wealth of the seven people depicted on one blanket than they were by any one of them alone,” Walker said.
The group shown the cover featuring seven billionaires together was also more likely to support a wealth tax.
“The way we think of the richest people – as a group or as individuals – seems to affect even our political preferences,” Walker said.
This new research hit the same week that the National Bureau of Economic Research released a report widening the growing financial divide between the rich and everyone else. The richest 1% have as much wealth as the poorest 90%, and the richest saw their wealth increase by 49% between 2001 and 2016, from $ 7.7 million to $ 11.5 million . Here’s a closer look at how America’s 1% build their wealth, as well as how Democratic lawmakers are fighting over the content and price of a social safety net that would be funded by tax hikes on wealthy taxpayers.