As a society, we’ve become much more worried about inequality. But what determines whether individuals see levels of inequality as fair? We think what matters is people’s politics: a “lefty” will think big gaps between top and bottom unjustified, the right believe the rich are simply being rewarded for hard work. But new research, combining information on what people think with data on what they earn, shows that our social status also matters a lot.
Generally, we have a fairly accurate view of where we sit in the income pecking order, although we assume others are more like us than they are. The rich think everyone is better off than the reality, while the poor underestimate top incomes.
Our social status also shapes how fair we think the world is. The higher we rank income-wise, the fairer we think inequality is. And our views shift with our social position. Moving down the income ladder, or losing your job, makes you recognise inequality as less fair.
Helpfully for those wanting to engage the public in tackling inequality, the research shows which inequalities people find most unfair: big earnings gaps between those working in the same sector or with the same qualifications. And transparency helps. Those on lower incomes overestimate how well they are doing relatively, but when told the truth they see inequality levels as less fair.
The real lesson? What you earn determines not just what you can buy but what you think.
