We Are the Most Unequal Society in the Developed World… And We Don’t Know It – Huffington Post

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The American people have spoken. But what did we really say about inequality?

At first glance, it seems that extreme inequality mattered little to the majority of voters who put pro-business candidates into office. After all, the Republicans, along with far too many Democrats, are certain to cater to their Wall Street/CEO donors. Do Americans really want an ever rising gap between the super-rich and the rest of us?

A important study (“How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay”) by Sorapop Kiatpongsan and Michael I. Norton provides insight on why Americans aren’t more upset about rising inequality: It shows we are clueless about how bad it really is. Their analysis of a 2009 international survey of 55,187 people from 40 countries, found that when it comes to understanding the severity of inequality, we’re the most clueless of all.

Americans are virtually blind to the growing gap between CEO pay and the pay of the average worker. As the chart below shows that gap has increased dramatically. In 1965, for every dollar earned by the average worker, CEOs earned 20 dollars. By 2012, that gap mushroomed to 354 to one.

 

But, when asked in the survey, Americans grossly underestimated this gap. Instead of 354 to 1, the Americans in representative survey think it is only 30 to 1. When asked what the ideal pay gap should be, Americans say that a fair gap would be about 7 to 1.

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