5 factors that fuel income inequality

A Dardem professor set out on a mission to find the factors that influence income inequality

Published: Apr 10, 2018

g_104849_income_inequality_280x210.jpgImage: Shutterstock


What do people believe they have to do to get power? Why do they feel that way? How is that contributing to inequality?

These are questions Darden Professor Peter Belmi is on a mission to answer.

Belmi’s research examines the insidious structural and psychological factors that contribute to social and income inequality, often despite people’s best intentions. He hopes that, by understanding how conscious and unconscious biases fuel the problem, we can correct for those tendencies and create more equal opportunities.

Here are five of his most interesting findings so far.

Advancement dynamics in organizations place a higher premium on independence than interdependence.
Belmi laid out this theory in his dissertation at Stanford. In it, he argued that individuals from disadvantaged backgrounds tend to believe that to be a good employee, they must connect and adjust to others in social contexts. They must show deference to authority, rely on others and be good team players.

“However, some workplaces do not reward such behaviors, instead promoting employees who are independent, expressive, confident and self-promoting,” Belmi said. “As a result, low-class individuals feel that they are unlikely to succeed in the workplace — that they do not belong in such settings and do not have the appropriate skills to succeed.”

Belmi and co-author Kristin Laurin used several surveys and experiments to show that when organizations emphasize Machiavellian-style politics to get ahead, they demotivate individuals from disadvantaged backgrounds from seeking power.

“Political maneuvering goes against that community-focused identity and causes many from disadvantaged backgrounds to opt out of the pursuit of power,” Belmi said. Middle- and upper-class workers, on the other hand, are more likely to accept workplace politics as part of the deal, even if they find it distasteful.

Companies can correct for this tendency by repeatedly demonstrating a commitment to fostering a strong community and providing clear, merit-based structures for promotions that cuts down on internal politics. To the extent that politics is an unavoidable reality, one way that managers can help low-status individuals overcome their aversion to it is by reframing what power-seeking means.

“If employees see a connection between attaining power and helping the community they came from, they are more motivated to play the game,” Belmi said.

Institutions that are not inclusive can elicit deviant behavior.
In a 2015 paper with his Stanford adviser, Margaret Neale, and co-authors Rodolfo Cortes Barragan and Geoffrey Cohen, called “Threats to Social Identity Can Trigger Social Deviance,” Belmi conducted an experiment with two groups.

The first group was asked to imagine that they worked for a manager who made a somewhat off-putting and possibly racist comment about the intelligence of black Americans; the second was asked to imagine that they worked for a manager who had a more inclusive stance. Black workers in the first group proved 55 percent more likely to endorse counterproductive behavior — like slacking off or misrepresenting hours worked — than their counterparts in the second group.

“People have a universal desire for respect, and there are substantial costs when they feel they are not respected,” Belmi said.

He said managers should also remember seemingly small slights can add up and stoke feelings of hopelessness.

“When people encounter bias in mainstream institutions because of their social identity — class, race, gender, sexuality or something else — it reinforces in their mind the narrative that society is stacked against them and their group,” Belmi said. “It’s particularly painful, because negative stereotypes are ubiquitous and people just can’t disassociate from their social identity.”

‘I’ll help you, you help me’? Not necessarily.
Reciprocity — the idea that you are morally obligated help people who help you — is a pretty widely accepted social norm. However, a 2015 study by Belmi and Stanford Professor Jeffrey Pfeffer found that it does not necessarily apply in the workplace.

In fact, Belmi said, many workplaces do just the opposite: Instead of encouraging people to reciprocate based on moral obligation, they encourage people to make decisions based on calculation and instrumentality.

In four separate studies, Belmi and Pfeffer found that people who would reciprocate favors in a social context – such as dinners or rides to the airport – were less likely to reciprocate those same favors in a business or professional setting, unless they believed that the person could be of value to them later.

“Many norms and activities that occur at work weaken our tendency to reciprocate based on moral obligation and increase our tendency to make decisions based on strategic calculation,” he said.

According to Belmi, organizational contexts that reward and reinforce such instrumental thinking can create fundamental dilemmas for members of under-represented groups, who tend to value loyalty, community, reciprocity and repaying past obligations.

“It’s difficult to thrive in an environment where the prevailing norms of how people should behave clash with their moral standards and personal values,” he said.

Making it to the top changes people’s worldview.
When people are in privileged positions, they start to believe that the system will work for everyone as it did for them.

Belmi and Neale studied about 1,900 individuals, providing scenarios that put some in a more privileged position and others in a less privileged position.

Those who believed they were more privileged were much more likely to be comfortable with the idea of an unequal society.

“People say they like equality, but they become less committed to that idea as they move up the hierarchy”, Belmi said.

Existential fear, especially fear of death, spurs our quest for power.
In addition to pursuing power for extrinsic reasons, like status and money, Belmi proposed that people also pursue power for existential reasons.

“The dominant narrative about power is that people want the money, influence and other perks that come with it,” Belmi said. “But we also find that people seek power because it helps them manage their existential concerns.”

He explored this theory in a paper with Pfeffer called “Power and Death: Mortality Salience Increases Power-Seeking While Feeling Powerful Reduces Death Anxiety.”

They conducted several experiments leading working adults to contemplate their mortality and then asking them how much they want to pursue power. Those who were confronted most harshly with their mortality reported wanting power more, particularly men.

Having power, Belmi suggested, helps people with their existential concerns by making them feel that they have some sense of worth or value in the world.

“We cling to institutions and worldviews larger than ourselves,” whether civic, religious, corporate or otherwise, Belmi said. “Humans fundamentally want to feel their lives matter and their legacy will continue when they are gone.”

An extended version of this article originally appeared on UVA Today.

[This article has been reproduced with permission from University Of Virginia's Darden School Of Business. This piece originally appeared on Darden Ideas to Action.]

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