Mark Dolliver: Resenting the Rich

Sure, people in a democracy have a “natural taste for freedom,” Tocqueville wrote in Democracy in America. “But for equality, their passion is ardent, insatiable, incessant, invincible.” Amid all the change America has seen since Tocqueville’s jaunt, that desire for equality has remained a constant. But it’s an increasingly thwarted passion. Amid a crescendo of data about how much richer the rich are compared to everyone else, concern over inequality has escaped the confines of public-policy debate to become a broader cultural phenomenon. With vast fortunes materializing seemingly overnight, even the affluent non-rich have come to feel they qualify (relatively speaking) as members of the wretched of the Earth. Public reaction to inequality is now reflected in everything from envy of the rich to attitudes on globalization, big business and the virtue of a free-market economy.

Americans have historically been averse to class war on the rich, for the simple reason they’ve hoped (and, often, expected) to be rich themselves someday. But rising inequality has altered the mood. Some of the numbers just stick in non-rich Americans’ democratic craw. The Internal Revenue Service issued a report this fall that showed the top 1 percent of earners getting the biggest share ever of the nation’s total income—21.2 percent, up from 12.3 percent 20 years ago. As the chart below shows, this far exceeds the amount going to the lower half of the population. Moreover, people sense that inequality is growing. In a Financial Times/Harris Poll in July, 75 percent said the gap between rich and poor in the U.S. is getting wider.

In bygone days, Americans might have shrugged off such a trend, adopting the view that “money isn’t everything.” No longer. The taboo against coveting thy neighbor’s goods has fallen into disuse. In our era, people aren’t bashful about venting their dissatisfaction, and the disgruntled want action. A Gallup poll in the spring found broad enthusiasm for the proposition that “the money and wealth in this country should be more evenly distributed among a larger percentage of the people” (see first chart on the facing page). As Gallup noted in its analysis of the data, “The current 66 percent who feel that way is tied for the highest reading on this measure across the time period in which the question has been asked.” The poll found “growing resentment toward the rich” in response to a question on whether there are too few or too many rich people in the U.S. Thirty-seven percent said there are too many, up from 21 percent in 1990.

Even in New York City, where conspicuously rich folks have always been part of the landscape, people have had enough of them: A poll for The New York Times Magazine (in an issue devoted to “City Life in the Second Gilded Age”) found 34 percent of locals said the city would be better “if there were fewer wealthy people living here,” compared to 28 percent who said it would be worse.

While not ready to toss the surplus rich into tumbrels and cart them to the guillotine, many Americans wouldn’t mind seeing them punitively taxed. Forty-nine percent of the Gallup poll’s respondents said the government should redistribute wealth by “heavy taxes on the rich.” That’s far higher than the 35 percent who felt this way in 1939—i.e., in the midst of the Depression.

So much for the madcap moneyed

Indeed, Depression-era movies are recalled for their depictions of the rich as charming madcaps. There’s too much egalitarian envy to make that a popular motif these days, and the cinematic rich are more apt to show up on the screen as grasping fat cats. Little wonder that such antipathy spills over to the way Americans feel about corporations and their leaders. In the Financial Times/Harris Poll, 77 percent said senior executives are paid too much. When respondents were asked how much they admire the people who run the country’s largest companies, the “not at all” vote (33 percent) was triple the sum of those saying “a great deal” (5 percent) or “quite a bit” (6 percent).

Capitalism itself won tepid support from Americans in FT/Harris polling. When asked whether they think a “free-market, capitalist economy” is the best economic system, just 49 percent said it is, while 17 percent said it isn’t and 34 percent weren’t sure. In a March report from the Pew Research Center for the People and the Press, 65 percent agreed that “Business corporations make too much profit”—the highest number saying so since the 1991 recession. Surely people in the home of hyper-capitalism should display more zest for such an economy. One obvious irony is that the people who complain about big corporate profits are likely among the ones who also complain that the shares in their 401(k) accounts aren’t doing better.

They do need maids, after all

While breeding such doubts about the virtue of the free market, rising inequality has naturally sharpened disagreement between rich and non-rich about economic globalization. An Economist/YouGov poll last month asked whether increased trade has helped or harmed U.S. consumers. Among respondents with income of $100,000-plus, 52 percent said it has helped and 26 percent said it has hurt, with most of the rest seeing no effect either way. In the under-$50,000 bracket, “hurt” beat “helped” by 45 percent to 30 percent. For similar reasons, lower-income Americans are more wary of large-scale immigration than are the rich. The latter don’t feel their own jobs are threatened by an immigrant influx—and, after all, they do need a ready supply of maids and gardeners.

Americans aren’t buying the argument that inequality is an inescapable corollary of economic growth. Polled in early summer by the University of Connecticut’s Center for Survey Research & Analysis, they were much more likely to disagree than to agree that big income gaps “are necessary for America’s prosperity” (see chart in center column). The rich may be an evil, in the view of their detractors, but not a necessary evil.

From the perspective of the non-rich, are the rich harder to take than they used to be? Actually, yes. Part of the problem is a breakdown in the comforting notion that the non-rich are happy in familial life around the simple hearth, while the rich are lonesome and miserable in their drafty mansions. (Think of the last reel of Citizen Kane.) In truth, richer people are the most likely to be married, which is often a reason why they are richer. Nor can they be laughed off as the nitwit progeny of an inbred aristocracy, as educational attainment now correlates strongly with income.

As much as populists have relished badmouthing the “idle rich,” it’s hard to ignore the fact that today’s wealthy can’t be dismissed with that label. According to the most recent Census data on the topic, 76 percent of households in the top income quintile have two or more earners, vs. 43 percent of middle-quintile households and 5 percent of those at the bottom. And the new rich are notorious for working long hours. In a piece earlier this year on The Wall Street Journal’s Wealth Report blog, writer Robert Frank noted that “Thorstein Veblen’s famous ‘leisure class’ has given way to what I call the ‘workaholic rich.'” More’s the pity for their would-be detractors. Given America’s work ethic, the person who earned his living by the sweat of his brow used to have the pleasure of feeling superior to the chinless idler who’d merely inherited his stake. That’s tougher do do amid the proliferation of today’s meritocratic rich.

‘The Haves vs. the Have-Mores’

The fact that many of the current rich started out in the middle or upper-middle class is especially galling for those who started out and stayed there. An article in The New York Times Magazine issue mentioned above noted “the merely well-to-do’s envy of the rich”; a headline on the Journal’s Wealth Report blog spoke of “The Haves vs. the Have-Mores.” This carries over to attitudes toward CEOs. In a Los Angeles Times/Bloomberg poll in June, respondents with income of $60,000-100,000 were more apt than those making less than $40,000 (86 percent vs. 76 percent) to say CEOs are overpaid.

It doesn’t help that many in the middle class feel their lot has worsened in absolute terms. A CBS News poll in April asked those in the $30,000-70,000 bracket whether life for the middle class has gotten worse or better in the past 10 years. “Worse” beat “better” by 54 percent to 31 percent. In a July poll for the Pew Research Center for the People and the Press, respondents were asked to classify themselves as “haves” or “have-nots.” Among those in the bottom third of the income distribution, the “haves” vote (though naturally smaller than for the richer cohorts) rose by a percentage point between 2001 and 2007. For those in the middle third, though, the “haves” tally tumbled by 11 points, from 54 percent to 43 percent. And it fell by six points (from 72 percent to 66 percent) for those in the top third—most of whom, of course, are middle or upper-middle class rather than rich. Hard data on income and spending offer little support for the notion that such people are sinking into the have-not ranks. But people’s perceptions are none the less vivid for lacking a factual basis. Ah, we truly live in a land of boundless possibility when people with six-figure incomes can feel they’ve achieved victim status!

Conspicuously virtuous consumption

As if today’s rich weren’t irritating enough, global warming has given them a chance to be even more so. Conspicuous consumption has been supplemented by conspicuously virtuous consumption, as the rich flaunt their devotion to the planet—say, by spending more on solar panels for a mansion than you spent on your entire house. Along those lines, a study by Scarborough Research “finds that almost half (42 percent) of the households in the U.S. that own or lease at least one hybrid vehicle have an annual income of $100,000 or more.” The non-rich could mock the rich for the old style of ostentation. Because it does have real social utility, conspicuously virtuous consumption is harder to criticize—which makes it even more irksome.

Even the non-rich can treat themselves to some luxuries, as marketers have sought to exploit the “massification of luxury.” We can safely surmise, though, that this has whetted rather than sated their appetites for more of the stuff rich people buy as a matter of course. If you’ve contentedly spent your vacations in a tent in some state park, it won’t necessarily occur to you to envy the plutocrat who has a vacation chalet. But if you’ve had a one-week time share in a chalet, you’ll be more inclined to want a chalet of your own. Thus, the affluent-but-not-rich can easily develop uncomfortable symptoms of “affluenza” without the compensating comfort of being rich.

Anti-rich sentiment would likely be worse than it is were it not for the saving grace of social mobility. It may be unusual for a dirt-poor kid to end up at the top of the income distribution pyramid as an adult (though it’s not at all rare to reach a higher quintile), but it’s quite common for people at the very top to come down a few notches.

As you can see from the chart in the right-hand column of page 31, which displays data gathered by the the Pew Charitable Trust’s Economic Mobility Project, six of 10 people born into top-income-quintile families a generation ago are in a lower quintile as adults today. A report last month from the Treasury Department found a similar pattern when looking at where people stood in 2005 vs. 1996. One highlight: “Less than half (40 percent or 43 percent depending on the measure) of those in the top 1 percent in 1996 were still in the top 1 percent in 2005.”

It’s all very nice to see someone climb from poverty into the middle class. Given today’s hostility toward the rich, though, the decline of a rich person likely elicits keener satisfaction than the rise of a poor person.