Income, race, and perception

People vastly underestimate wealth inequality in America.

A memorable New Yorker cartoon depicts three fish—small, medium, and large. “There is no justice in the world,” says the small fish. The middle fish, devouring its smaller neighbor, hedges: “There is some justice in the world.” Opening its jaws to swallow both, the big fish declares the world just.

The point is that perspective matters, and those who benefit most from something are most likely to look for and approve of evidence that favors it. Two Yale professors are studying the issue; their research suggests that this tendency, known as “motivated reasoning,” helps explain how Americans view economic inequality between people of different races.

Michael Kraus, assistant professor of organizational behavior at SOM, and Jennifer Richeson, the Philip R. Allen Professor of Psychology, asked participants in a 2017 study to estimate the wealth and income gaps between white and black families. These divides are stark. At the time of the survey, the average white family had 20 times more wealth than the average black family and earned almost twice the income. Across the board, participants underestimated both disparities; they assessed the wealth gap as 80 percent smaller than it was. But the least accurate estimates, on average, came from white participants with incomes above $100,000.

The authors suggest two explanations: motivated reasoning and lack of social network diversity. Americans want to believe society is fair, Richeson says, especially if society has rewarded them with high income and status—and “research suggests that wealthy white Americans are the least likely to have those interactions, across race and class lines, that help put some context on wealth, race, and income.”

Richeson and Kraus replicated their results in a study, now in peer review, that includes questions about economic inequality among white, Latinx, and Asian American families. One reason participants struggled to grasp the extent of economic inequality, Kraus notes, is that they believe in a version of America where such severe gaps in income and wealth don’t exist.

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