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How inequality devastates our economy, health and social relations

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Short of a revolution, new research highlights ways the have-nots can begin to close the gap, including a surprising focus on personal values.

Keith Payne grew up next to the railway tracks, working in Kentucky’s tobacco-drying sheds for pocket money. He didn’t know he was poor until a mix-up over lunches at school taught him what it meant to be one of the “free” kids. The moment changed everything, says Payne. “I can feel the heat in my face as I recount it.”

It wasn’t just the lunch. Suddenly, Payne was also aware of the social ladder looming over him, its rungs “marked with shoes and hair and accents”. For a long time, these revelations rendered him almost silent. “Who was I to speak?”

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Now, Payne is a professor of psychology and neuroscience at the University of North Carolina, an expert in what feeling left behind does to the brain and, in turn, the body. His book, The Broken Ladder: How Inequality Affects the Way We Think, Live and Die, is in part a beautifully written memoir. It’s also a deep dive into the psychology of inequality.

Payne says the hardest part was conveying the sheer scale of the disparity between those at the top of today’s ladder and those at the bottom. We are now faced, he writes, with “the equivalent of scaling skyscrapers” – and that has “deadly serious consequences”.

In the US, inequality is worse than it has been since before the Great Depression. There, like here, the poor are not in fact getting poorer, although they may feel that way: those on the lower rungs are stagnating, stuck where they’ve been for decades. But the gap is growing because those on the top rungs are winching themselves ever higher.

According to Oxfam, the combined wealth of New Zealand billionaires Graeme Hart and Richard Chandler exceeds that of the 30% of the population at the bottom of the heap. Our 1% – that fabled club – owns 20% of the country’s wealth.

The OECD’s latest income-inequality data shows the US gap is the third biggest behind Chile and Mexico. New Zealand is 13th, and OECD researchers have suggested our gap has hobbled GDP by more than 15 percentage points in recent decades, largely because of disadvantaged families bailing out of education.

Yet for Payne’s purposes, such numbers matter less than the way people feel. He emphasises that the middle classes are by no means invulnerable, as it’s feeling poor, not actually being poor, that triggers inequality’s cascade of ill effects.

So when you’re the kid at school with an empty puku – or even the dorkiest shoes – that’s a lesson that sticks. When a family moves to Wainuiomata, does up the house and parks an Audi in the driveway, the neighbours take notice on a primal, physiological level. When it’s revealed that Fonterra chief executive Theo Spierings earned $8.3 million in 2016, those on $83,000 suddenly feel less comfortable. And when it’s the Kardashians and the Trumps clogging up our social-media feeds, keeping up with the Joneses starts to seem a cinch.

Keith Payne.

Inequality trumps poverty

Ten years ago, epidemiologists crunching US medical data found that poverty didn’t map well onto indicators such as life expectancy, murder and violent crime, school dropouts, obesity and mental illness. But when they swapped poverty for income inequality, the lines on all the graphs snapped together. And the correlations held tight, even when the researchers controlled for actual income.

What’s going on?

A large part of inequality’s power is what Payne calls a neurological “now-bias”. “When people feel that tomorrow’s uncertain or the resources today are scarce, they tend to focus on immediate rewards because who knows if it will still be there tomorrow?”

In this state, we make seemingly self-defeating decisions, take huge risks and struggle to consider the long term. We might blow the week’s pay at the TAB. We might avoid the dentist or drop out of university to take a dead-end job.

Payne’s own “extreme presentism” and “near-pathological aversion to uptightness” was so pervasive that he hit college with an inequality hangover. “I had to struggle … to attain the kind of conscientiousness and organisation that seemed to come naturally to my middle-class classmates.”

He has since devised gambling experiments to watch this biological phenomenon in action. Everyone starts with the same amount of money. But introduce the perception of inequality and players feel compelled to win big – and start taking bigger risks.

Last year, Payne’s team also found strong correlations between income-inequality data and billions of Google searches that indicate risky behaviour: such things as “how to pass a drug test”, “morning-after pill” and “payday loans”. Further analysis established that this risky behaviour was one pathway between inequality and poor life outcomes.

Health status

When it comes to our health, inequality is a stronger predictor, says Payne, than income, education or occupation.

As he writes, “emergency rooms are not filled with people dropping dead from acute cases of inequality”. But someone who doesn’t think about the future is more inclined to smoke, drink to excess, have a poor diet and avoid exercise. Heart disease, cancer, diabetes, obesity – here we come.

Payne makes the point that inequality is also a predictor of depression and anxiety, which are in turn predictors of addiction. And he points to a striking anomaly, winkled out of global death-rate data by Princeton economists Anne Case and Angus Deaton in 2015. Death rates have been trending down for decades, but the rate for middle-aged white Americans – especially men whose education stalled at high school – is on the rise. This demographic, they said, is largely dying “deaths of despair” due to alcohol, suicide or drugs.

Payne’s take: “They expect more because of their history of privilege … They are dying of violated expectations.”

Blaming the victim? Payne doesn’t think so, because he’s not buying into the rusty old argument that it’s weak character that drives such behaviour. “If you or I were thrust into such situations, we might well start behaving in more unhealthy ways, too.”

Behaviour, he says, is estimated to account for only about a third of inequality’s effect on health. The other two-thirds can be put down to stress.

We know the damage sustained stress does to our bodies. It ramps up inflammation, shunts our immune systems into overdrive, puts pressure on our hearts and blood vessels and changes the brain structure. Unsurprisingly, stress is linked to heart disease, auto-immune disease, allergies, obesity, diabetes, depression and anxiety. Such stress-related diseases are now some of the most common causes of death in developed societies, Payne says. And there’s a strong link between our perceived status and our stress.

On a biological level, it makes perfect sense: being low in the pecking order could mean losing out on food or the chance to mate. Studies of troops of baboons and monkeys, for example, have found that the animals low in status have the highest stress hormones. Remove the top-ranking animals – as happened by chance in one study – and the “middle management” relaxes.

Payne cites human studies that link both low incomes and a feeling of low status with elevated levels of cortisol and adrenaline. One study found that even the transient, lab-induced feeling of being low on the ladder has rapid and powerful effects on inflammation markers in the blood.

But put groups of us through stressful experiments and the differences really become stark, Payne says: it’s those who feel low on the ladder whose bodies twitch into overdrive.

Public servants undergoing such a test at the University of London 15 years ago rated the task as equally stressful. But their bodies told a different story. Those who felt they had high status quickly calmed their heart rates. The hearts of low-status participants took more than two hours to stop racing, and their blood showed more inflammation markers than the other group.

Stess, such as that caused by poverty, can lead to heart disease. Photo/Getty

Family planning

Another life-changing ramification of feeling low on the ladder is that it can prompt us to have more children, and have them young. Fruit flies have suffered for this finding. Payne details a grim experiment in which scientists bred hundreds of fruit flies from a small group of males and females. Half were drafted into a “safe” group – they were looked after, but otherwise left alone.

Not so the “die young” group. Every few days, the scientists culled and replaced 90% of this population. The probability of surviving one week as an adult: 0.01%.

After four years, the flies in that group had received the genetic message: they were breeding younger and laying more eggs, than their “safe” peers.

It’s not that the insects decided they’d better get a wriggle on, Payne says, it’s survival of the fittest. “The flies that were able to reproduce early simply left more descendants in future generations.”

In the early 90s, research started to emerge that showed humans followed a similar “fast strategy”. The first large study looked at women in Chicago. Did those in poor suburbs – where people lived hard, short lives – have children earlier? Absolutely. “The correlation was strikingly large,” writes Payne. “As life expectancy decreased, so did the women’s age when they started having children.”

That finding has been borne out dozens of times. And to it has been added another fascinating fact: women who grow up under certain stress or duress start ovulating earlier than those raised in stable, well-off homes. This,  too, has been well replicated. Factors found to play into the start of puberty include poverty, the absence of a father and regional socioeconomics.

So, as with the fruit flies, it’s not simply that these women make a decision to have babies, Payne says. The short-term thinking that plagues those who feel low on the ladder may skew choices about sex and contraception, but “that wouldn’t explain why young women start ovulating earlier … There’s a biological aspect to this, where our bodies are reacting to the stress of uncertainty and scarcity in a lot of ways – and one way that our bodies react is by making it easier to have children earlier.”

He emphasises that he’s not trying to make any sort of moral argument. “I’m just trying to explain the patterns we see, empirically, and the biological and evolutionary rationale behind it.”

Translated to the real world, of course, this means the poorest families – those who have passed stress and precariousness down through the generations – are those biologically primed to have lots of children, young, in a repeating cycle.

“That may be true, but evolution doesn’t care about whether we’re happy or whether we’re in good circumstances. It only cares about survival and reproduction.”

It’s about to get worse, not better. “The economic forecasts are for inequality to just keep growing. There’s no consensus to do anything about it, in America, anyway, and the current Administration’s priorities, having to do with everything from healthcare insurance to tax cuts, are all going to exacerbate the growth of income inequality.”

He’s written off the next four years. How about the next 50? Payne is convinced the current pattern is unsustainable. The ladder will be knocked over, or at least flattened, and he sees two ways that could happen.

What he hopes is that democracies recognise the implications of income inequality and make real moves to correct it. He believes it should be treated as a public-health problem, and addressed via policies that raise the minimum wage, expand early-childhood education and paid parental leave, cap executive pay and strengthen unions.

He worries, though, about what can happen to the psyches of the few who reach the top rungs of the ladder, and that this will take us down a different path. A 2012 study he writes about, called “Higher social class predicts increased unethical behaviour”, found that the more expensive the car, the more likely the driver is to cut other drivers off, or nip through zebra crossings ahead of pedestrians. People who consider themselves high on the ladder were also more likely to sneakily eat lollies they were told were for children in another study.

Harvey Weinstein. Photo/Getty Images

The Weinstein effect

Payne sees more sinister dynamics of power in play in the multiple sexual assault allegations against Hollywood’s Harvey Weinstein. He says there is good evidence that power really does corrupt. It can amplify a sense of entitlement and prompt people to extrapolate their power – in the workplace, for example – to other areas of life.

“Sexual relationships is an area where this exaggeration of power causes huge problems. Powerful men tend to overestimate the extent to which women are attracted to them. And they feel entitled to act on their impulses. Add to this that power makes it harder to take in the perspectives of other people, and you have a dangerous combination. It often leads to sexual harassment, and worse.”

Weinstein is just the most recent example of this phenomenon. “The very motives that lead some people to crave status and seek power lead them to keep grasping for more.” Or, as US President Donald Trump put it: “Grab ’em by the pussy. You can do anything.”

Those who are high-up also tend to disregard the role of luck in their lives, Payne says, and put their success entirely down to hard work. Payne illustrated this last year in an “investment game” experiment using fake stocks. Everyone made the same profit but one group were told they’d come out on top. Tests showed these people felt disdain for their “inferiors”, seeing them as biased, incompetent and irrational. Then the researchers set up a situation where players could vote for a redistribution policy that would even out the earnings for the next cohort of players. So sure were the “big earners” of their all-round superiority that they opted to disregard votes of players from the other group.

This meshes with new research from Victoria University and international collaborators, including Harvard, which found that as inequality grows, the more those at the top strive to protect their privilege.

There’s an orange-coiffed elephant in the room. “Hmm,” is all Payne will say on Trump specifically – although his book begins with an anecdote of the President’s first wife, Ivana, having a tantrum on a plane. But yes, he does see the forces highlighted by those studies in play now. “What’s scary about that to me is that if you go down that road too long, you probably do end up at some sort of catastrophic upheaval.”

US President Donald Trump. Photo/Getty Images

A higher power

In the meantime, on a personal level, religion can be a real comfort. Religious fervour can be sparked by inequality, Payne says, and in turn, it can buffer against its repercussions. The human brain is a pattern-seeking machine, he writes. Chaos and randomness are stressors, threats. So when we feel left out or left behind, our brains try to self-soothe by “manufactur[ing] meaningful patterns”.

This might mean seeing truth in a religion based on a “benevolent, all-knowing and all-powerful being controlling the universe” – for a brain that feels vulnerable and out of control, this is “the ultimate win-win”. For others it might mean seeing Jesus in a piece of toast, or jumping on board with conspiracy theories.

Whatever form the patterns take, their purpose is solace, Payne says, reassurance that the world is in fact orderly and predictable. He points to the fact that in the lab, inducing even a transient feeling of helplessness has made people more likely to construct such patterns, or strengthen their belief in a higher power.

And on a country-by-country level, researchers have found a tight correlation between wealth and the role of religion: bar the odd quirk, poorer countries place more importance on religion. In New Zealand, the correlation holds down to the level of suburbs. And in the US, a similar trend is found state by state when strength of religious belief is mapped against a “suffering index” of factors such as violent crime and infectious disease. “Like the biblical Job, the more people suffered, the more they had faith in God,” Payne writes.

Poverty even changes the way people believe: it’s the poor who tend to believe in demonic possession, miracles and faith healing, and that the Bible is God’s literal word.

Payne’s childhood home, Kentucky, ranks high on the axes of real-world suffering and religious belief. “A world full of miracles and mysteries,” he describes it as, remembering a girl who convulsed when a pastor touched her forehead, a family member who speaks in tongues and the day that as a child he heard a thrilling voice speaking to him alone. Already the scientist, he deduced that what he heard was a combination of two Bible verses he had recently studied. Experimenting, he realised he could hear similar voices saying anything if he wanted, if he thought about it hard enough. For him, scepticism won.

But for those who do believe, he says sincerely, religion works. “Individuals who are religious tend to be happier and less anxious – about both life and death.”

Values education

Education hoisted Payne up the ladder. “I felt like school was going to be my way out,” he says. “School came easily to me, and I believed that if you get a good education then you can succeed.” The chaos of poverty around him felt irrelevant. “I felt like I was just passing through.”

He has a powerful tip for others in that position. His book ends with a précis of an astonishing Stanford study in which a group of school students were given writing assignments throughout the year that focused on their personal values. A control group wrote about values that were important to others.

The intervention closed the stubborn achievement gap between black and white students by 40%. That finding was borne out with different students in two subsequent experiments. Remarkably, the boost in their performance was still evident three years later.

So forget the Joneses – and the Kardashians – and remember who you are. It’s a lesson not just in coping with the ladder, but climbing it.

You owe me

When workers feel underappreciated, they have ways of balancing the ledger.

Inequality poisons workplaces. Research suggests that as the pay gap widens between executives and workers, the quality of work drops.

This is particularly bad news for New Zealand – as detailed in our April 29 cover story, executive pay is skyrocketing.

Payne says employees aren’t too hung up on their actual pay or the tasks they’re required to do. Cleaners can be just as happy in their work as a boss. But if they feel their reward doesn’t match their contribution – if they think they’re being shafted – workers find a way to balance things out.

If they can’t negotiate a raise, some choose to get what they feel they’re owed by stealing from their employer.

Others will seek to undercut their contribution. That might mean slacking off or pulling sickies. Or something more sinister: in the Martin Sprouse-edited 1992 book Sabotage in the American Workplace, there are examples of a postal worker destroying mail, a stockbroker making nonsense trades and a factory worker who put ball bearings in carburettors.

This article was first published in the October 28, 2017 issue of the New Zealand Listener.