Why Inequality Is Bad for the One Percent

The video of Mitt Romney deriding the 47 percent of Americans “who are dependent upon government” has re-ignited a debate about social class in America, roughly one year after the Occupy Wall Street movement first took to the streets to protest rising inequality.

At a $50,000-a-plate fundraiser, Romney scoffed at that 47 percent “who pay no income tax” and “believe they are victims.” Romney’s comments upset many Americans because he seemed to be attacking some of the most vulnerable members of our society.

Aside from whether they actually “believe they are victims,” research has consistently shown that people lower on the social totem pole suffer significantly worse mental and physical health than those better off, including higher rates of heart disease, depression, suicide, several forms of cancer, and death.

Yet a new line of psychological research suggests there’s another victim of inequality: the rich themselves.

In a series of studies, researchers have found that attaining high social status impairs key social and emotional skills. It makes people less interested in connecting with others. It hinders their ability to read other people’s emotions. It makes them less compassionate and less generous.

Indeed, Romney’s comments could make him the poster child for these social and emotional deficits. And here’s why the people at that $50,000-a-plate dinner should care: These are skills that research has also linked to leading a happy, meaningful life. So as the super rich in this country assume an ever-loftier status above the 47 percent (or the 99 percent), they risk depleting their own reserves of happiness.

What’s more, this research carries troubling implications for rich and poor alike: that inequality may be self-perpetuating, because as our society grows more unequal, the rich will be less likely to care about the poor. Taken together, these studies suggest why inequality should be a concern for anyone who cares about the health and well-being of American society as a whole.

Wealth hurts empathy

A few decades ago, the typical CEO used to earn about 30 times more than their employees; now they earns 110 times more. The Congressional Budget Office estimates that the top one percent of Americans saw their after tax-income grow by 278 percent between 1979 and 2007; over the same period, the middle 20 percent of Americans saw their incomes rise by just 35 percent—and the bottom fifth saw just 18 percent growth.

Indeed, a recent Pew Research Center survey found that Americans see inequality as the greatest source of social conflict in the country today, eclipsing conflicts around age, race, and immigration. Two-thirds of respondents said there are “very strong” or “strong” conflicts between rich and poor, roughly a 40 percent increase from just two-and-a-half years ago.

Researchers’ concerns about inequality have generally focused on the plight of the poor and the shrinking middle class, exploring how inequality hurts the mental and physical health of the less fortunate.

“There are powerful psycho-social effects of inequality,” says Richard Wilkinson, a British epidemiologist who has spent years researching these effects, which he documents at length in his recent book, The Spirit Level. “As status differences grow, we worry more about status insecurity, we get widespread anxiety about self-esteem, and that brings rising rates of mental illness and depression.”

Originally, it should be noted, researchers expected to find these kinds of effects among the upper class—heart disease was thought to be “the executive’s disease,” brought on by all the responsibilities of his status.

Instead, they’ve found that higher status affects other matters of the heart: It makes people psychologically disconnected from those around them.

For instance, in a 2010 study published in Psychological Science, researchers found that people of higher socioeconomic status (SES) were worse at reading other people’s emotions—a skill known as “empathic accuracy,” a basic part of empathy.

The study’s primary author, Michael Kraus, now an assistant professor of psychology at the University of Illinois, believes these results show how higher social status makes people more self-absorbed.

“As you become more wealthy, you become more focused on the self,” he says. “When I think I am higher on the social class ladder relative to others, I start to think about all the personal freedoms and opportunities I have relative to others, and it is this process that makes me less accurate in reading emotions.”

But isn’t there a chance that these differences between rich and poor are innate—perhaps the rich get further in life because they’re less preoccupied with other people’s needs?

To test this idea, the researchers—including Dacher Keltner, the Greater Good Science Center’s faculty director—manipulated people’s sense of status, making them feel higher or lower on the social ladder.

Regardless of their actual SES, people temporarily made to feel upper class had a harder time reading others’ emotions; people made to feel lower class showed better empathic accuracy.

This suggests that there’s something about the experience of high status that affects how we connect with others emotionally. In other words, a lack of empathy among the rich is a natural byproduct of inequality.

Further evidence comes from a study published late last year in the journal Emotion, which found that upper-class college students reported feeling less compassion than other students when they watched a video about children suffering from cancer. The heart rate of the non-rich students slowed down as they watched the video—a physiological sign of compassion. The rich hearts didn’t show that reaction.

“It’s not that the upper classes are coldhearted,” says study lead author Jennifer Stellar, a UC Berkeley graduate student and former Greater Good Science Center fellow (Kraus and Keltner served as co-authors). “They may just not be as adept at recognizing the cues and signals of suffering.”

Indeed, a 2009 study by Kraus and Keltner suggests that the upper classes are less attuned to social cues in general. This study, published in Psychological Science, found that college students from wealthier families appeared less engaged in conversations than did people of lower SES. They doodled while the other person was talking, rummaged through their backpacks, frequently checked their cell phone—in other words, they showed blatant disinterest in the other person, even if that person was also wealthy. They were even less likely to nod their head or laugh in response to something the other person said.

Using only college students in studies like this is usually seen as a limitation. But in this case, it shows how the psychological effects of status are so great that they can even make people tune out peers with whom they ostensibly have a lot in common. These weren’t people from different social galaxies; they were roughly the same age, part of the same collegiate community.

This underscores one of the biggest implications of this whole line of research: The rich aren’t just less inclined to connect with the riff-raff. They’re less inclined to connect with anyone.

“We’re showing a difference in behavior, regardless of who the wealthy are interacting with,” says Kraus. “It has implications for the wealthy interacting with the wealthy, as well as with the poor.”

As their own status and sense of self balloons, then, the rich risk disconnecting from other people—and that might include people within their class, or even their own family, not to mention people of other classes.

Wealth hurts happiness

All these results aren’t just bad news for people who might encounter indifference and apathy from the rich. They’re bad news for the rich themselves. The qualities that seem to be impaired by elevated status are the qualities that research has strongly linked to long-term happiness.

“Being compassionate, having empathic accuracy, being trusting and cooperative—these are keys to social connection and, in turn, happiness,” says UC Berkeley postdoctoral researcher Paul Piff, whose own research has found that people of higher SES were less willing to share money with a stranger or make charitable donations. (However, when they were made to feel lower status, they became more generous; the opposite was true for people made to feel high status—they became stingier.)

Indeed, perhaps the dominant finding to emerge from positive psychology research over the past decade is that our happiness (and health) is largely determined by the quality and quantity of our social connections. Perhaps that’s why “pro-social” behaviors and emotions—compassion, empathy, altruism—have been so strongly linked to happiness.

Consider: Research by Sonja Lyubomirsky, a leading happiness researcher, has consistently found that people report feeling happier after doing nice things for others. Several neuroscience studies have found that giving to others activates pleasure regions of the brain. Research by psychologists Lara Aknin and Elizabeth Dunn has even suggested that spending money on others makes you happier than spending on yourself. And a Canadian study published last year, led by Myriam Mongrain, found that after people supported others compassionately for just five to 15 minutes every day for a week, the compassionate people reported significant gains in happiness and self-esteem six months later.

“We have pretty strong evidence that doing good things for others makes you happier,” says Lyubomirsky. “When you do kind acts for others, you feel better about yourself, you feel more optimistic, you see people as being more interconnected, and you strengthen your connections to others, who may help you in times of need. All of those things combine to increase happiness.”

These findings offer an explanation for why, once Americans attain an annual income of $75,000, more money doesn’t seem to bring more happiness: Beyond that point, perhaps our elevated sense of status brings with it the harmful social and emotional effects that offset the joys of more money.

Sure enough, one recent study found that people who were wealthier, or were just temporarily made to feel wealthier, were worse at savoring everyday pleasures—a key to happiness, according to prior research.

According to the authors of that study, which was published in Psychological Science, the results suggest that “the emotional benefits that money gives with one hand (i.e., access to pleasurable experiences), it takes away with the other by undercutting the ability to relish the small delights of daily living.”

In general, though, research suggests that money in itself isn’t necessarily the problem. It’s status—one’s relative place above others in your society.

If money were the problem, the poorest countries would be the happiest, but they’re not. The key, instead, seems to be inequality: The happiest countries are the ones with the most equality, like the nations of Norway, Denmark, Finland, and Sweden. These countries also rank among the highest in an index of compassion created by University of Minnesota researcher Ron Anderson.

By contrast, countries with more inequality, like the United States and the United Kingdom, have significantly higher rates of health and social problems: By Wilkinson’s analysis, mental illness is three times more common in unequal countries; infant mortality rates are also much higher, and life expectancy is significantly lower. Trust and social cohesion—important factors in happiness—are significantly higher in more equal societies.

John Gottman, the country’s leading marriage researcher, talking at a Greater Good Science Center event about the relationship between equality, trust, and healthy communities.

And unfortunately, the upshot of Kraus, Piff, and their colleagues’ research is that inequality may be self-perpetuating: The lack of compassion the rich feel might make them less likely to out look for the less fortunate, thereby increasing the gap between rich and poor—and the worse this gap gets, the research suggests, the less inclined the rich may be to do anything about it.

What can we do about it?

So if we can’t expect the upper class to spontaneously look out for the lower class, what can we do to address some of these psychological effects—for the benefit of rich and poor alike?

First, it’s important to remember that this isn’t a lost cause. Recall that in Kraus’s study, when people just visualized themselves as being lower on the social ladder, their skills of empathy improved.

“The encouraging thing about our work is that just a little shift can bring real improvements in empathy,” says Kraus.

It might be easy to engineer these shifts in a lab, but there are some grassroots efforts to engineer them in real-life as well.

One example are “poverty simulations,” programs in which high-powered people are made to assume the identity of a low-status person for a few hours, trying to navigate life’s challenges from their point of view.

“People say they feel completely crushed by the experience,” says Tiela Chalmers, a San Francisco lawyer who has been running poverty simulations at law firms around the country over the last five years. “They come out of it with a more empathic view of things.”

In that light, it’s useful to think of inequality not as something that eradicates empathy in the upper class but as a barrier to empathy—and possibly to happiness—that they can work to overcome.

One way to do that, aruges Piff, is through volunteering, which encourages contact between people of different backgrounds. Research suggests that this kind of contact can make it easier to identify with people from whom we’re often divided, whether by race, ethnicity, or social class. On the other hand, feeling isolated from other people and more focused on yourself is what stunts pro-social behavior.

In other words, insularity is an enemy of empathy.

“The rich aren’t bad people, they just live in insular worlds,” Piff says. “If you can do things to make your world less insular—which could be what you read, who you fraternize with—then you’re going to open yourself up to developing skills that contribute to a happy life.”

Indeed, a new study by the Chronicle of Philanthropy found that wealthier Americans donate a significantly smaller percentage of their income to charity than do the middle class, and when a high number of rich people are clustered in one neighborhood, that community’s giving rate is even lower. However, when they live in more socioeconomically diverse areas, the rich become more charitable.

Of course another approach to reducing the empathy gap is to target inequality directly. How to do that is a matter of partisan debate. Conservative proposals focus more on breaking down cultural class divides, such as Coming Apart author Charles Murray’s suggestion to eliminate unpaid internships and Senator John McCain’s call for a national service corps that makes people of different social classes work together in the same way that military conscription once did.

Liberals, on the other hand, emphasize redistributing wealth and increasing the welfare of the less affluent, through progressive taxation or corporate policies that prevent top earners from taking home too great a share of their company’s profits.

Robert Reich, former U.S. secretary of labor, talking at a Greater Good Science Center event about the relationship between social justice and social empathy.

Ultimately, argues Piff, hierarchies are a part of life, and eliminating inequality isn’t a realistic goal. What really matters for the happiness of the rich, the poor, and everyone in between is to prevent the kind of gross social stratification we’re seeing in the United States today.

“Runaway inequality makes it harder for people to relate to those who have different backgrounds from themselves,” he says. “But if you’re able to reduce the extremes that exist between the haves and the have-nots, you’re going to go a long way toward closing the compassion and empathy gap.”

So where does that leave Mitt Romney? The empathy gap has not been good for his campaign: A new Pew Research Center poll shows that he trails President Obama by eight percentage points—and 43 points in the area of “connects well with ordinary Americans.” For his own sake, Romney might do well to address inequality.