The wealth gap amongst Americans continues to grow, but surveys indicate that most Americans aren’t concerned. They don’t worry about what others have, only what they themselves don’t. Others can have private planes, a dozen million dollar residences and more money than they can spend in a hundred life-times, as long as they can have the modest life-style of the middleclass American dream.
But they should care, for there are serious long-term consequences to the widening gap. In a study of the literature about the wealth gap, F. Spagnoli, in his article “Income Inequality: What’s Wrong With It, and What’s Not,” identifies the consequences of such disparity.
Spagnoli, an Belgian economist, finds that the wealth gap threatens democracy, for “politics is more responsive to the interests of the rich than to the interests of the poor. . . .” Wealth supports candidates; wealth employs lobbyists; wealth control media outlets; etc. While theoretically every citizen is equal (one person, one vote), the reality is that money is power and where there is a lot of money there is a lot of political leverage. The result is that policies are adopted that favor the wealth to the neglect of the less well-off.
The children of the wealthy attend the best schools and have connections after graduation that lead to the best jobs, those that make the most money. This means that social mobility becomes more and more restricted. The ability to rise or fall based upon one’s merit is undermined, leading to social stratification. Spagnoli writes, “when inequality is combined with social rigidity and stratification, it undermines meritocracy and equality of opportunity. To the extent that mobility is a good, lower inequality is a good as well.”
A democracy is sustained by social cohesion, where people feel as though everyone is in it together, where sacrifices are shared, where differences in politics are less important than all count all as citizens of the same state. In a democracy, people have to fundamentally trust one another, believing that everyone has a fair chance and that differences are subject to compromise. But “income inequality may also lead to social fragmentation, with negative consequences for the cohesiveness of a society.” Spagnoli puts it this way: “People trust each other less in unequal societies”
So income inequality does matter. And in some sense Americans know that too, although they don’t state it. Listen to the discontent about a divided America and the disgust around dirty campaigns. Underneath this fear that America may be tearing itself apart is the ghost of rich getting richer and the rest falling further behind.