Income and Wealth Inequality: Framing, Media, and Narratives

Introduction: The Scope of Income and Wealth Inequality

Income and wealth inequality have become highly contentious and polarizing issues throughout the world. As economic prosperity continues to grow, statistics show that more individuals are being left behind economically. The rise of income and wealth inequality is creating a large dichotomy between the "haves" and the "have-nots." By concentrating such a large proportion of national wealth and income within a select few individuals, their ability to impact political and social discourse is greatly enhanced. This is particularly true within the United States, where politicians often rely on donations from wealthy donors to run for office. These donors frequently expect "favors" in return — in the form of favorable legislation and policy decisions. The very concept of lobbying is heavily skewed toward those with money, power, and influence, thereby circumventing the will of those without such resources. This juxtaposition between the needs and desires of the wealthy and the needs and desires of the poor often leads to bitter and antagonistic public debates.

These extreme levels of inequality also have significant implications for society at large. At least 40% of households in the nation cannot afford an emergency $500 expense. Unaffordable housing has caused a rapid rise in homelessness. Unaffordable education has given rise to nearly $1 trillion in student debt. Still others are unable to properly save for retirement, creating more pressure on the Social Security system. Each of these elements can have grave consequences for society. For example, the inability to pay for an emergency expense can lead to rising levels of high-interest credit card or personal loan debt. As was demonstrated during the 2008 financial crisis, too much consumer debt — particularly when individuals are unable to service it — causes severe economic hardship for all of society. Likewise, for the vast majority of Americans, housing is the single biggest asset they will ever own. As housing costs continue to rise, more Americans will lose access to this wealth-generating asset. Consequently, spending on items such as appliances, furniture, lawn equipment, and electronics will decline, further hindering economic activity. The lack of retirement savings is yet another example of how income and wealth inequality will harm society in the long run. The inability of individuals to consistently save places more pressure on an already strained system, and many Social Security programs currently run the risk of becoming insolvent as they pay out more in benefits than they receive in revenue (Alvaredo, 2011).

The above represents only a few of the many problems resulting from wealth and income inequality. Unfortunately, there is a great deal of misinformation about how to solve this issue. Most proposed solutions center around taking from one party and giving to another. Although this approach has garnered significant support in the mainstream media, it does little to address the problem properly. The framing of the issue should instead revolve around education, discipline, and skills development, as opposed to simply redistributing funds from those who have earned them (Goldin, 2009).

Redistributive approaches have attracted attention in part because they do not require much effort on the part of lower-income individuals. As will be detailed below, this creates an environment of easy but potentially inaccurate information. Social media often plays an adversarial role in this dynamic, as many participants are misinformed. Research has shown that lower-income individuals tend to spend disproportionately on discretionary items such as alcohol, jewelry, clothing, and expensive vehicles. In addition, they are more likely to finance such purchases using high-interest credit. This combination of acquiring liabilities and servicing them from future income creates a downward spiral that ultimately hinders individuals' wealth potential. According to research, 80% of millionaires are self-made, and according to the Federal Reserve, the top 10% in the United States own 69.6% of the nation's wealth. From these statistics, it appears that much of the negative sentiment toward high earners is unwarranted. Many accumulated their wealth by adhering to certain behavioral standards that others are often unwilling or unable to commit to.

How Actors Frame the Inequality Debate

Actors framing this issue often argue that the persistence of income inequality is the fault of the wealthy. They frame the issue using an "us versus them" mentality, which leads many to conflate the apparent simplicity of a solution with its actual effectiveness. Several countervailing forces are at play. Politicians, for one, play a large role in framing arguments for and against inequality within the United States. They often have an incentive to appeal to certain members of society using half-truths. This dynamic has been observable in several recent elections, where candidates have garnered support through misinformation. Income inequality is a particularly easy issue to mobilize around because it affects a large majority of people, and solutions that involve taking resources from the few and redistributing them to the many have broad popular appeal. Politicians such as Bernie Sanders and Elizabeth Warren have leveraged this framing effectively. The simplicity of the message, combined with the promise of immediate gratification, makes it a highly practical political tool (Milanovic, 2011).

The media plays a substantial role as well, often exacerbating these issues without offering counter-commentary that would provide a more balanced perspective. Instead, many news outlets simply repeat the framing used by politicians in an effort to advance a political agenda. It is well established that media outlets hold considerable power in shaping community dialogue and discourse. The political affiliations of these outlets therefore pose a problem to society as it relates to framing. For example, CNN is widely regarded as leaning more liberal, while Fox News is generally perceived as leaning more conservative. Followers of each network tend to develop a proclivity toward one political party. By consuming only one side of the debate, these individuals often obtain a skewed view of the facts. This increases the framing power of media, as outlets can effectively shape the beliefs and behaviors of audiences who rely on them as their primary source of political information. As a result, those who lean more progressive tend to favor policies aimed at wealth reallocation, while those who lean more conservative tend to oppose such redistribution. The answer often lies somewhere in the middle, but people on both sides are unwilling to compromise because they consume only one side of the argument.

The issue of framing is further exacerbated by social media, where false information can easily enter the platform and be amplified by those who do not conduct their own due diligence. This misinformation is very difficult to correct after the fact, as demonstrated by instances of foreign interference in recent elections, where fabricated narratives were spread as though they were fact. Those with a vested interest in believing such claims spread them without independent verification. The media ultimately creates a framing problem by distilling complex issues into simple terms in order to retain their viewing audience. Without providing counter-arguments, many individuals use this misinformation to make ill-informed decisions that can negatively impact society (Gurría, 2013).