The Weird Psychology of Feeling Poor Affects Attitudes on Inequality

Citizen Wealth Financial Justice

New Orleans  In recent years close readers of Elizabeth Kolbert could count on her to keep us up to date on the rising temperature outside that has made climate change and the destruction of global species a global issue. In the New Yorker recently she started looking “inside” about how people feel about relative wealth and inequality by recording the temperature inside peoples’ minds. Reading her, it is now going to be hard for me to gauge which one is scarier for all of us.

First, she reprised two competing theories about how people feel about inequality. One, the rational-updating model, holds “that people assess their salaries in terms of opportunities.” In short, if they find co-workers are making more, they decide their chances of a raise are good. If they find that their co-workers are making less, they decide their chances of a raise are bad. The other theory involves emotional response rather than a rational one and is known as the “relative income” model, where anger is triggered if people find they are making less, and those making more are happy as clams.

A recent study though came up with a third finding. For sure those who found out they were making less were ticked, but the workers who discovered they were making more weren’t elated. In fact as Kolbert reported, “Workers who discovered they were doing better than their colleagues evinced no pleasure. They were merely indifferent.” The takeaway that speaks to the crisis of inequality in our current society is that “there are no real winners and a multitude of losers,” in her words. In mine it’s worse, because the winners feel neither shame nor obligation therefore buttressing inequality even as it grows increasingly extreme, as we recently witnessed in the impunity of the Republican’s recent tax “reform” transferring immense wealth to corporations, shareholders, and the rich.

In the psychology of the poor, they feel badly about their condition and other studies indicate that feeling also triggers riskier behavior as people try to break out of a zero-sum situation at the bottom of the ladder. This problem of feeling poor is not something that only lower income families experience in the reality of their situation, but is something that other social scientists find has gone viral even to the rich and upper classes. Their ability to “feel poorer” as multi-millionaires compared to centi-millionaires or billionaires, leads them to rationalize their situations into a distorted version of the “relative income” model. Worse, this false consciousness breeds total indifference to those who are actually poor, because even the super rich can claim that they are poorer than others, excusing and confusing the reality.

One observer studying this phenomena felt that this contradictory feeling among the rich spoke to “moral conflicts about having privilege in general.” I would discount that sense of shame and argue instead that this psychology of the rich enhances their sense of entitlement and explains part of the reason why, despite all of the drum beating about rising inequality, both political parties have come to the conclusion that their base – and donors – don’t see the reality of inequality and its virulent social impact as an issue worth action or solution, therefor impoverishing us all, perhaps permanently.


Please enjoy this version of Muddy Waters’ Mannish Boy, an unreleased track from Jimi Hendrix.

Thanks to KABF.