The Margin: Here’s why people might hate billionaires, but still love Jeff Bezos or Elon Musk
The 1% aren’t so bad one on one, according to new consumer research.
Despite how popular it might be to harp on the ultra-wealthy over wealth inequality, people are actually pretty tolerant when it comes to the individual billionaires that belong to the upper echelon of society.
That’s according to a new study from researchers at Ohio State University and Cornell University, which was published in the journal “Proceedings of the National Academy of Sciences” this week. Eight separate studies were conducted with a total sample size of 2,800 participants. The bottom line: people like individual billionaires, but they don’t like the billionaires’ club.
“The success of an individual at the top of the economic ladder is likely to be attributed to the person’s creativity, foresight and effort,” the study’s authors concluded, “whereas the success of ‘the wealthy,’ ‘the 1%’ or the economic elite is more likely to invite thoughts about privilege and societal structures that work to their benefit.”
For example, one study found that people were more in favor of wealth taxes when they thought about a group like the top 1% paying the higher tax rate, and less likely to support it when they thought of an individual rich person paying more. In other words, tax the rich — but leave a favorite billionaire like Tesla
founder Elon Musk, former Amazon
CEO Jeff Bezos or Microsoft
founder and philanthropist Bill Gates alone.
“How we express and communicate information about inequality is important. Talking about ‘the 1%’ is going to get a different reaction than personalizing it by talking about one person in that exclusive club,” study co-author Jesse Walker said in a statement.
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“And as consumers, we need to pay attention to how we react to news about the rich and inequality,” he continued. “How that information is presented to us can influence us, even our policy preferences, in ways that we may not always consciously realize.”
For instance, another study included in the report found that people had stark opinions about how much a CEO should make relative to an average employee, depending on how that information was packaged and presented to them.
Participants in one group read that CEO salaries for the largest 350 American companies grew from 48 times that of the average worker in 1995 to 372 times today. The other group read about a specific company, Avnet, and its CEO, whose salary had also grown from 48 times that of the average worker in 1995 to 372 times today.
While participants from both groups thought the ratio of CEO-to-average-worker salary should be less than what they were told it is, those who read about Avnet in particular were OK with that ratio being significantly higher. Therefore, people are “more tolerant of the lavish levels of compensation for those at the top and the increased inequality that such compensation has spawned when it is an individual CEO being compensated rather than CEOs as a group,” the researchers conclude.
Another study in this report looked at how media can alter people’s perception of wealth and inequality. Two groups were shown different Forbes magazine covers featuring billionaires. One group was shown a cover featuring seven of the world’s wealthiest people. (Familiar faces like Gates and Oprah Winfrey were swapped for less well-known billionaires to eliminate any bias people might have toward them.) The other group was shown a cover that featured just one of the seven billionaires.
And after reading a brief description of the billionaires featured on the cover, participants were asked how they felt about the person, and to rate how much they deserved their wealth, as well as to explain how they thought the billionaires came by their money. Those shown the individual billionaires were more likely to attribute their wealth to talent and hard work, and their comments were overall less angry, compared to those who got the group cover shot.
“People in our study were clearly more upset by the wealth of the seven individuals pictured on a single cover than they were by any one of them pictured alone,” Walker said.
The group that was shown the cover featuring seven billionaires together was also more likely to support a wealth tax.
“How we think of the wealthiest people — as a group or as individuals — seems to affect even our policy preferences,” Walker said.
This new research hit the same week that the National Bureau of Economic Research released a report digging into the widening financial divide between the rich and everyone else. The top 1% has as much wealth as the bottom 90%, and the richest saw their wealth balloon 49% between 2001 and 2016 — from $7.7 million to $11.5 million. Here’s a closer look at how America’s 1% build their wealth, as well as how Democratic lawmakers are wrangling over the contents and price tag of a social safety-net package that would be funded by tax hikes on wealthy taxpayers.