4 Charts that Show How Rising Income Inequality Increases Pessimism

SOURCE: AP/Evan Vucci

Occupy DC protesters watch morning commuters walk through McPherson Square in Washington on Monday, December 5, 2011. The income gap between the rich and everyone else is large and getting larger, while middle-class incomes stagnate. This has raised concerns that the nation's middle class isn't sharing in economic growth as it has in the past, and sparked the Wall Street protests that spread to other cities in the country.

By Nick Bunker | December 5, 2012

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Rising income inequality in the United States has increased pessimism among Americans, according to data analyzed in a new Center for American Progress working paper by University of Maryland political scientist Eric Uslaner. Below are some key charts from the working paper, “Inequality, Pessimism, and Social Cohesion,” that show how the public has become less optimistic about economic growth, more pessimistic about the welfare of the average person, and less trusting of other people, as income inequality has skyrocketed over the past 30 years.

(Note: The Gini coefficient is a measure of income inequality. A coefficient of 1 would represent a perfectly unequal society, while a coefficient of 0 would represent a perfectly equal society.)

In 1987, when the Gini coefficient was 0.426, 67 percent of the population believed that there was no real limit to economic growth. By 2012 that share of the population had fallen to 51 percent. The Gini coefficient rose to 0.477 in 2011, the most recent year for which data is available. (see Figure 1)

Moreover, 56 percent of the population believed the lot of the average person was getting worse in 1973, when the Gini coefficient was 0.4. In 1994, however, the coefficient had risen to 0.456, and 69 percent of the population thought the average person was worse off. (see Figure 2)

 

In 1960 about 58 percent of Americans believed that most people could be trusted, but by 2006 that share had declined to around 34 percent. Income inequality also climbed over that time period, as the Gini coefficient grew from 0.397 in 1967—the earliest year for which data on the coefficient are available—to 0.47 in 2006.

Uslaner’s paper calculates how much pessimism—measured by specific polling questions—has been affected by rising income inequality.

As these charts show, rising income inequality has resulted in greater pessimism among Americans with regard to economic growth, the welfare of the average person, and the trustworthiness of other people and the government. For a more detailed explanation, read the working paper here.

Nick Bunker is a Research Assistant with the Economic Policy team at the Center for American Progress.