As discussed here previously, the distribution of income has changed in the US since 1970, or about the time that income inequality started to grow. In that year about half of all income was earned from wages, the other half from income came from investments (routed through corporate profits). Since then it has fallen steadily by year to 42.6% overall by wages, a difference of about $11k per household per year.
That suggests that the basic social agreement about what “work” is has changed. In the postwar period, through the 1960s, a fair day’s labor was supposed to be rewarded by a fair day’s pay. How does that work now? It turns out that Gallup has been polling people about this since 2001, and the trend shows that there is little faith in this basic arrangement of our economic “golden era”. The social agreement has, in fact, broken down.
There is no magic “fair” distribution of income in any society. There will always be some inequality and there will always be some corporate income that is realized as profit for investors. The fact that it broke down to a 50/50 split through the immediate postwar period is rather astonishing. Perhaps it is, indeed, what most Americans would call “fair”.
We don’t have polling on how people feel going back that far, but we do have a poll on the topic since 2001. Gallup has been asking 1,018 people of all ages, genders, and races, “Are you satisfied with the opportunity for a person to get ahead by working hard?” The question isn’t whether you can get ahead by working hard, it’s whether the person polled is satisfied with the arrangement.
In 2001, 76% of all Americans were either “satisfied” or “very satisfied” that people get ahead by working hard, 22% “dissatisfied” or “very dissatisfied”. That eroded gradually by year before falling off a cliff after 2008 to where it stands today. Only 54% are happy with the arrangement, 46% not so much. The lines haven’t yet crossed, but they are on a path to doing so.
The breakdown by party is much more interesting. Democrats and Republicans felt about the same satisfaction, 60% and 61% respectively. Independents, however, were overall dissatisfied with only 45% happy with the current arrangement. If that trend holds, the more independent younger generation is going to bring the overall results down to a net negative. (the cross-tabs are not immediately available).
When asked about income inequality in the same poll, 67% reported being dissatisfied, with Democrats and Independents scoring about the same at 75% and 70%. Republicans were much less concerned at only 54% dissatisfied – but still a majority.
This tells us that Democrat are onto a good trend if they can exploit the feelings that Americans have that income inequality – scoring especially well with Independents if they stress that hard work does not create rewards anymore. But what is important here is not electoral politics, per se, but how it plays out in the longer term when creating policy.
The relationship between Americans and work has changed significantly in the last 50 years, and the attitudes of Americans towards work has changed along with it. There is no doubt that a new arrangement has to be found, especially with 2/3 of the population overall unhappy with the way income is distributed. The numbers alone don’t tell the story, but the fact that the changed relationship between workers and work has resonated into a changing attitude does.
What can we expect from this thing called “work” in years to come? If at all possible, I will try to find a similar poll with cross-tabs or dig them out of this one to see how it breaks down by age. There is a sign that among Independents, who tend to be younger, the traditional arrangement that hard work is rewarded has already broken down. That would mean that the next generation will demand a new relationship when they take power in the future.
No matter what, Americans’ relationship with work has changed. But our policies relating to work, from tax law to definitions of a work-week to how income is declared are all left over from an earlier time with very different attitudes. This can’t hold forever.