The case for redistributing wealth in America is losing support from 2 demographics


occupy wall street income inequality ignoring

Lucas Jackson/Reuters

A man plays chess in New York City's Bryant Park as Occupy Wall Street protestors mark the second anniversary of the movement in 2013.

As the US emerged from the Great Recession, there was a growing focus on the idea of the 1% and income inequality. Google Trends for the terms "the 1%" and "income inequality" spiked in 2011 and have remained elevated since then.

Data has shown that the gap in income between the rich and poor has been increasing and the US is one of the worst developed countries in regards to economic inequality.

Politicians, protestors, and the media have increasingly become fixated on these themes of the wealth gap.
Despite the increased attention, though, Vivekinan Ashok, Ebonya Washington at Yale University, and Ilyana Kuziemko at Princeton University, found that support for the redistribution of wealth, via government intervention, has stayed the same for most Americans, but for two surprising groups it has slid in recent years.

Support has decreased among two groups.

Since 1970, as income inequality has ballooned, support for redistribution among Americans has broadly remained the same. In multiple surveys and many ways of framing the question, the researchers observed that Americans have essentially not budged in their opinions.

But digging into the data, they found that while Americans as a whole have stayed fairly consistent, there are two groups where support for redistribution has seriously fallen: African Americans and the elderly.

Americans over age 65 have gone from being more supportive of redistribution than those under 65 to less so. For example, when asked if the government should do more to help reduce income differences on a scale of 1 (it should not) to 7 (it should), elderly people have gone from around a 4.5 in 1980 to around a 3.8 in 2012, while their younger counterparts haven't budged.

elderly support for redistribution

Vivekinan Ashok, Ilyana Kuziemko, and Ebonya Washington

For blacks, while they still have a much higher support than whites, support has also decreased.

"While there has been no significant movement on the issue by whites, in both datasets, blacks, who have a much higher desire for redistribution on average, have significantly decreased their support," said the report.

These trends seem counterintuitive to the basic idea of why people support redistribution.

"An individual's demand for redistribution is a function of mean income minus own income," said the study. "As inequality increases, a greater share of the population has income below the mean and thus demand for redistribution rises."

For the two demographic groups that have declined, the researchers say that is even more puzzling.

"Blacks and the elderly, two groups who are relatively more reliant on government assistance, have significantly decreased support for redistribution over the sample period relative to other Americans," wrote the researchers, those groups would be expected to hold a more positive few of those programs.

The researchers found that two common explanations, economic self-interest and increased conservatism of the population, don't account for either group's changes. So it's not because more black and older people are earning more or changed their political outlook.

"Clues" about declining support

While the researchers don't claim to have solved the puzzle of these declines, they do present two "clues" as to why they may have happened.

For elderly people, it may come down to their health.

The redistribution idea comes in many different forms, including healthcare. By providing healthcare to citizens, a government can close the gap and allow poorer workers a chance to earn more. According to the researchers, the idea of healthcare for all and the expansion of Medicaid may be scaring elderly people into thinking that they will suffer:
The elderly in the US are the only immutable group entitled to government health insurance. Thus we ask in this period in which universal health care has moved in and out of policy discussions, whether seniors, perhaps concerned about the crowd out of funding for their own care, have grown increasingly unsupportive of extending guaranteed government health care. We find not only a trend of decreasing support for universal care, but that this variable "explains" 40% of the elderly's decreased support for redistribution.

The idea is that as spending for healthcare has increased for other groups, seniors are worried it will mean cuts for them.

For blacks, the researchers point to what they say is the "concurrent trend" of declining support for race-based aid."We find that blacks, while more likely than whites to support racially-targeted government aid, are converging toward the opinion of whites," said the report. "We find this decrease in support for race-based aid 'explains' nearly 45% of blacks' decreased support for redistribution, a finding that deepens the puzzle: Why is support for race-targeted aid decreasing during a period in which the black-white wage gap has stagnated?"

This is additionally confounding given the "remarkably persistent" gap between average incomes for blacks compared to whites.

While the researchers don't have the whole puzzle solved, it is clear that there are a number of factors confounding Americans' views on income inequality and redistribution.

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