Do the Rich See Inequality as a Zero-sum Game?

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California has one of the highest levels of income inequality in the nation, and nearly six out of 10 California adults polled said they believe the government should do more to reduce the gaps between rich and poor. 

But when presented with proposed policies to boost resources for disadvantaged groups, even liberals show reluctance to reduce inequality after all, according to a new study co-authored by researchers from UC Berkeley and released last week. 

The researchers found that people who have social or economic advantages tend to believe they’ll be harmed by policies that reduce inequality — even when those policies don’t reduce their own access to resources. 

That’s because they believe inequality is a zero-sum game, the researchers wrote, so much so that the “advantaged group” in the study experiments sometimes selected “lose-lose” policies that would have reduced their own access to resources just to maintain the disparity among groups.

“The misperception that equality is harmful is stubbornly persistent, resisting both reason and incentivization,” the researchers wrote. 

They said it’s a possible explanation for why even California liberals push back on policies that would reduce inequality. 

That pushback came in various situations measured in the study — in tests involving white homebuyers compared to Latino ones, or job seekers without disabilities compared to job seekers with a disability. 

For instance, in one scenario, white non-Hispanic Americans in the study were told that white homebuyers have received far more in home loans than Latino homebuyers. They were then presented with hypothetical policy proposals for banks to increase, decrease, or maintain loans to Latino homebuyers — and they were told that the amount being loaned to white homebuyers would not change. 

The white participants responded that they believed increasing loans for Latino homebuyers would decrease their own access to loans, and reducing loans to Latino homebuyers or maintaining the status quo would boost their own access to loans.

The study raises challenges for policymakers seeking to reduce inequality in California, where social programs already are heavily funded by revenues from the rich. Under its progressive tax system, nearly half of California’s income tax revenue comes from the state’s top 1% of earners

Relative advantages

Derek Brown, a Berkeley doctoral student and co-author of the study, said contributing taxes can be seen as an individual act. But when it comes to the overall distribution of resources, privileged or advantaged groups view how they’re doing in comparison to other groups, he said.

“People are really cued into relative advantages,” he said, “so much so that they might even misconstrue changes to their relative position to another person or another group as a loss in an absolute sense.”

Relative advantages can have a potent effect on the public’s support for programs designed to benefit minorities or disadvantaged groups. 

A 2018 Stanford study found that when white participants were told white Americans’ incomes had stagnated in relation to Black and Latino peers, they were more likely to withdraw support from social welfare programs that they were told would benefit minorities than from programs they were told would benefit whites.

Last week’s Berkeley study examined the failed 2020 California ballot measure Proposition 16, which would have lifted the ban on affirmative action in public employment or public university seats. Researchers found that the beliefs of whites and Asians that Prop. 16 would reduce their own access to opportunities was a strong predictor that they would vote against it even when controlling for other ideological beliefs, including political orientation.

The Berkeley study also found that privileged groups continue to believe they’ll be put at a disadvantage when inequality is reduced, even when they are explicitly told that a proposed policy would increase the size of the pie for all.

In one experiment, a diverse group of participants were told they were on a team that had received far more monetary bonuses than another team, but they were told to devise a way to more equally distribute the bonuses. They rejected one proposal to receive five more bonuses while the other team received 50, in favor of a proposal to cut five of their own bonuses while withholding 50 from the other team.

“Even when advantaged group members are presented with two available options for achieving equality — either lifting up those at the bottom (at no cost) or dragging down those at the top — they stubbornly view either option as a sacrifice,” the researchers wrote. “So long as the interests of the advantaged group are held in higher consideration than the well-being of the disadvantaged, our studies suggest that existing levels of intergroup inequality are unlikely to be effectively addressed.”

Dowell Myers, a professor of public policy at the University of Southern California put it another way.

“The conclusion is that people are not rational,” he said. 

Reducing inequality “calls for some counter-education about what the benefits are … It’s always easier with a new program than with an old program. With old programs, people are entrenched, and they’re defending their turf.”

The Berkeley researchers did not identify a way to overcome the perceptions, calling that a “critical step for further research.”

“Hopefully for policymakers who actually seek to promote equality … that has to be justification,” Brown said. “And we just have to do whatever we can to make sure that goal is ultimately achieved.”

This article is part of the California Divide project, a collaboration among newsrooms examining income inequality and economic survival in California.