Myths and misconceptions
We consulted economists, policy analysts, sociologists, data researchers and journalists with a range of opinions and backgrounds in order to develop our understanding of what "economic inequality" means to people who work with the term every day. This list is a collection of their pet peeves about media coverage of the issue: false or misleading ideas journalists - and, consequently, the public - often misunderstand.
1. Economic inequality only affects the poor.
News stories often focus on an extreme end of the poverty spectrum. In reality, economic inequality affects nearly all Americans, especially those hovering within the middle and lower-middle classes.
“In many cases what’s lost there is that the very poor, every time their situation has improved in any real way has been through broad-based growth.” — Monique Morrissey, economist at Economic Policy Institute
“Everything has its price, so for instance, raising the minimum wage has effects on other segments of the population as well. So I think our job is basically to show the cause and the effect of these actions and tough choices that folks on all sides of the equation have to make.” — Gary Castor, editor of Jefferson City News Tribune.
2. Everyone is “middle class.”
Americans at both ends of the economic spectrum tend to misidentify themselves as middle class. A Gallup survey from 2012 revealed as much, as a combined 86 percent of Americans defined themselves as either working, middle, or upper-middle class. Conversely, only 10 and 2 percent of Americans classified themselves as upper and lower class, respectively.
"It’s constantly people cycling in and out of poverty and I think that as that reality becomes more reported and publicly available in the press, people will see middle class less as this very solid construct." — Alissa Peterson, special assistant at the Center for American Progress
“When you talk about a family of four or a family of five and you talk about income that is in many cases one or two working people, you would have to think in terms of the $50,000-70,000 income level. Well there are people who are being classified as middle class who are making far less than that, which is hard for some people to believe, but it’s true.” — Bob Ray Sanders, Fort Worth Star-Telegram editorial columnist
“Everybody who has a job and works from 9 to 5 for wages thinks they’re in the middle class. Which is not true, of course. It’s the same thing at the bottom — I think Americans are optimistic by nature and don’t like to feel marginalized.” — Alyssa Davis, researcher at Economic Policy Institute
"You have such a broad group of people who wouldn’t be in the upper fifth of income, or even the middle fifth of income, but they’re seeing themselves as a middle-class person because there’s such an aspirational American concept behind it... I think what ends up happening is people don’t necessarily end up supporting the policies that would most benefit them." — Alissa Peterson, special assistant at the Center for American Progress
3. The stock market and Wall Street greatly affect all Americans the same way.
According to ProQuest’s business-news data, the volume of business news articles swelled from about 168,000 stories in 1989 to nearly three times that amount in 2012. But as coverage has expanded, its focus has also narrowed, shifting its target audience from the general population to the specific concerns of high-income investors.
“The focus on especially the stock market and business market is really disproportionate to its impact on the average American.” — Monique Morrissey, economist at Economic Policy Institute
"Something that’s not really talked about is this situation where the stock market is booming, booming and booming and all the gains are going to the extremely wealthy. They’re less likely to consume — for every dollar they earn, they’re more likely to save that dollar, while low- and mid-income people are more likely to spend it, which boosts economic growth." — Alissa Peterson, special assistant at the Center for American Progress
4. The unemployment rate is always reflective of the labor situation.
While unemployment is a key issue for many Americans, experts we interviewed said the media should broaden its focus to include the entire labor market in coverage of economic inequality — including underemployment and discussions about living standards.
"It’s bad to focus on the unemployment rate because it doesn’t fully tell you what’s happening in labor markets. It’s better to focus on labor force participation rates.” — Alyssa Davis, researcher at Economic Policy Institute
5. Unions are antiquated organizations.
Experts we interviewed said even the concept of unionized labor has become unreasonably politicized in the media. They encouraged journalists to take a step away from the topic before reporting.
“Unions get demonized a lot in economics reporting. The idea of workers having power is not a terrible thing.” — Alyssa Davis, researcher at Economic Policy Institute
“You see corporate profits going up really high, but we see wages stagnating. I think the crucial thing to point out is that the workers don’t have any political power anymore. And the only way to arrest that trend of growing inequality is to rebuild the labor movement.” — Jason Hickel, academic and journalist
6. Economic inequality is new and inherently bad.
According to the experts we interviewed, economic inequality (including poverty) has always been a part of society to some degree. Journalists should approach the issue as multifaceted and context-dependent.
“Most economists would argue that some level of inequality is necessary to incentivize people. That doesn’t mean that the current levels of inequality aren’t extreme and unnecessary. The same incentives could be achieved with a much smaller level of inequality.” — Peter Mueser, professor of economics at the University of Missouri
“…Like it or not, there’s always going to be poverty in society. It’s not clear you truly inform the readers or the viewers when you basically focus solely on the human interest side and not on the cold facts on what has happened over decades or different places.” — Saku Aura, associate professor of economics at the University of Missouri
7. The economy has not changed in recent decades.
Since the 1970s, experts said economic progress has evolved in a way that values different skills in its workers, including technological ability and more education. Experts asked journalists to consider all the factors playing into the economic situation at any given time.
“The view of people who defend current inequality is well, look, people who are more productive because of technology are much more than in the past.” — Peter Mueser, professor of economics at the University of Missouri
“One of the theories of what’s caused increasing inequality is that technology has changed and its made it more valuable for people, like Bill Gates, to be working and it has made them more productive. So when they get lots of money, it’s just a reflection of the high productivity those people have in an environment which has changed and made them more productive.” — Peter Mueser, professor of economics at the University of Missouri
“It’s been a market process where specialized knowledge that requires a large educational investment has been rewarded, and [the wages of] these traditional low skill jobs….have been quite stagnant.” — Saku Aura, associate professor of economics at the University of Missouri
8. Economic inequality is a static problem.
Experts emphasized the importance of reflecting the relationship between causes and effects in economic reporting in order to advance audience understanding. They say that clarity and proportionality are often missing in coverage of economic inequality.
“…the media loves to cast income inequality as a static problem, as if the accumulation of wealth is unrelated to the creation of poverty….But in reality, if you look at the economics of it, it’s important to point out that the processes of wealth creation are really closely related to the processes of poverty creation. You can’t have one without the other really.” — Jason Hickel, academic and journalist
“[There is] this idea that the economy is this organic thing we can’t understand or control and things just happen in it. When really, the economy is consequences of policies and choices that we have made to create certain outcomes with certain winners and losers and we can pick who those winners and losers are.” — Alyssa Davis, researcher at Economic Policy Institute
"You see these sensationalized stories about low-wage workers and how little they earn, but you never see the policy proposals to combat inequality included in those articles. It makes it seem as if its this intractable problem that has been created by policy, whereas we know that income inequality is very much a result of policy.” -- Alissa Peterson, special assistant at the Center for American Progress
9. The poverty line is a foolproof measure.
The percentage of people living below the poverty line is a statistic often cited by journalists. However, the metric is often called into question because it is antiquated and fails to account for how far the dollar goes in different parts of the country.
“The way we measure poverty with the federal poverty line is flawed because it doesn’t measure the programs people are receiving. [The supplemental poverty measure] differs from the federal poverty line because it measures benefits people receive, so it’s a much more accurate indicator of peoples’ actual financial status, as opposed to peoples’ income, which is what the Federal poverty line measures.” — Alissa Peterson, special assistant at the Center for American Progress
“Our poverty definition was set in 1964, and there are so many new things out there that aren’t included in the definition because they didn’t exist. Food stamps didn’t exist in 1964, various programs and things that affect peoples’ actual well-being. Another thing that is obvious and should be looked at: poverty is pegged strictly to household income, and we all know that a person living in rural Missouri on $30,000 is a lot different than a person living on $30,000 in Manhattan because the rent and cost of living is so much higher.” — John Blodgett, programmer analyst at the University of Missouri Office of Social and Economic Data
News stories often focus on an extreme end of the poverty spectrum. In reality, economic inequality affects nearly all Americans, especially those hovering within the middle and lower-middle classes.
“In many cases what’s lost there is that the very poor, every time their situation has improved in any real way has been through broad-based growth.” — Monique Morrissey, economist at Economic Policy Institute
“Everything has its price, so for instance, raising the minimum wage has effects on other segments of the population as well. So I think our job is basically to show the cause and the effect of these actions and tough choices that folks on all sides of the equation have to make.” — Gary Castor, editor of Jefferson City News Tribune.
2. Everyone is “middle class.”
Americans at both ends of the economic spectrum tend to misidentify themselves as middle class. A Gallup survey from 2012 revealed as much, as a combined 86 percent of Americans defined themselves as either working, middle, or upper-middle class. Conversely, only 10 and 2 percent of Americans classified themselves as upper and lower class, respectively.
"It’s constantly people cycling in and out of poverty and I think that as that reality becomes more reported and publicly available in the press, people will see middle class less as this very solid construct." — Alissa Peterson, special assistant at the Center for American Progress
“When you talk about a family of four or a family of five and you talk about income that is in many cases one or two working people, you would have to think in terms of the $50,000-70,000 income level. Well there are people who are being classified as middle class who are making far less than that, which is hard for some people to believe, but it’s true.” — Bob Ray Sanders, Fort Worth Star-Telegram editorial columnist
“Everybody who has a job and works from 9 to 5 for wages thinks they’re in the middle class. Which is not true, of course. It’s the same thing at the bottom — I think Americans are optimistic by nature and don’t like to feel marginalized.” — Alyssa Davis, researcher at Economic Policy Institute
"You have such a broad group of people who wouldn’t be in the upper fifth of income, or even the middle fifth of income, but they’re seeing themselves as a middle-class person because there’s such an aspirational American concept behind it... I think what ends up happening is people don’t necessarily end up supporting the policies that would most benefit them." — Alissa Peterson, special assistant at the Center for American Progress
3. The stock market and Wall Street greatly affect all Americans the same way.
According to ProQuest’s business-news data, the volume of business news articles swelled from about 168,000 stories in 1989 to nearly three times that amount in 2012. But as coverage has expanded, its focus has also narrowed, shifting its target audience from the general population to the specific concerns of high-income investors.
“The focus on especially the stock market and business market is really disproportionate to its impact on the average American.” — Monique Morrissey, economist at Economic Policy Institute
"Something that’s not really talked about is this situation where the stock market is booming, booming and booming and all the gains are going to the extremely wealthy. They’re less likely to consume — for every dollar they earn, they’re more likely to save that dollar, while low- and mid-income people are more likely to spend it, which boosts economic growth." — Alissa Peterson, special assistant at the Center for American Progress
4. The unemployment rate is always reflective of the labor situation.
While unemployment is a key issue for many Americans, experts we interviewed said the media should broaden its focus to include the entire labor market in coverage of economic inequality — including underemployment and discussions about living standards.
"It’s bad to focus on the unemployment rate because it doesn’t fully tell you what’s happening in labor markets. It’s better to focus on labor force participation rates.” — Alyssa Davis, researcher at Economic Policy Institute
5. Unions are antiquated organizations.
Experts we interviewed said even the concept of unionized labor has become unreasonably politicized in the media. They encouraged journalists to take a step away from the topic before reporting.
“Unions get demonized a lot in economics reporting. The idea of workers having power is not a terrible thing.” — Alyssa Davis, researcher at Economic Policy Institute
“You see corporate profits going up really high, but we see wages stagnating. I think the crucial thing to point out is that the workers don’t have any political power anymore. And the only way to arrest that trend of growing inequality is to rebuild the labor movement.” — Jason Hickel, academic and journalist
6. Economic inequality is new and inherently bad.
According to the experts we interviewed, economic inequality (including poverty) has always been a part of society to some degree. Journalists should approach the issue as multifaceted and context-dependent.
“Most economists would argue that some level of inequality is necessary to incentivize people. That doesn’t mean that the current levels of inequality aren’t extreme and unnecessary. The same incentives could be achieved with a much smaller level of inequality.” — Peter Mueser, professor of economics at the University of Missouri
“…Like it or not, there’s always going to be poverty in society. It’s not clear you truly inform the readers or the viewers when you basically focus solely on the human interest side and not on the cold facts on what has happened over decades or different places.” — Saku Aura, associate professor of economics at the University of Missouri
7. The economy has not changed in recent decades.
Since the 1970s, experts said economic progress has evolved in a way that values different skills in its workers, including technological ability and more education. Experts asked journalists to consider all the factors playing into the economic situation at any given time.
“The view of people who defend current inequality is well, look, people who are more productive because of technology are much more than in the past.” — Peter Mueser, professor of economics at the University of Missouri
“One of the theories of what’s caused increasing inequality is that technology has changed and its made it more valuable for people, like Bill Gates, to be working and it has made them more productive. So when they get lots of money, it’s just a reflection of the high productivity those people have in an environment which has changed and made them more productive.” — Peter Mueser, professor of economics at the University of Missouri
“It’s been a market process where specialized knowledge that requires a large educational investment has been rewarded, and [the wages of] these traditional low skill jobs….have been quite stagnant.” — Saku Aura, associate professor of economics at the University of Missouri
8. Economic inequality is a static problem.
Experts emphasized the importance of reflecting the relationship between causes and effects in economic reporting in order to advance audience understanding. They say that clarity and proportionality are often missing in coverage of economic inequality.
“…the media loves to cast income inequality as a static problem, as if the accumulation of wealth is unrelated to the creation of poverty….But in reality, if you look at the economics of it, it’s important to point out that the processes of wealth creation are really closely related to the processes of poverty creation. You can’t have one without the other really.” — Jason Hickel, academic and journalist
“[There is] this idea that the economy is this organic thing we can’t understand or control and things just happen in it. When really, the economy is consequences of policies and choices that we have made to create certain outcomes with certain winners and losers and we can pick who those winners and losers are.” — Alyssa Davis, researcher at Economic Policy Institute
"You see these sensationalized stories about low-wage workers and how little they earn, but you never see the policy proposals to combat inequality included in those articles. It makes it seem as if its this intractable problem that has been created by policy, whereas we know that income inequality is very much a result of policy.” -- Alissa Peterson, special assistant at the Center for American Progress
9. The poverty line is a foolproof measure.
The percentage of people living below the poverty line is a statistic often cited by journalists. However, the metric is often called into question because it is antiquated and fails to account for how far the dollar goes in different parts of the country.
“The way we measure poverty with the federal poverty line is flawed because it doesn’t measure the programs people are receiving. [The supplemental poverty measure] differs from the federal poverty line because it measures benefits people receive, so it’s a much more accurate indicator of peoples’ actual financial status, as opposed to peoples’ income, which is what the Federal poverty line measures.” — Alissa Peterson, special assistant at the Center for American Progress
“Our poverty definition was set in 1964, and there are so many new things out there that aren’t included in the definition because they didn’t exist. Food stamps didn’t exist in 1964, various programs and things that affect peoples’ actual well-being. Another thing that is obvious and should be looked at: poverty is pegged strictly to household income, and we all know that a person living in rural Missouri on $30,000 is a lot different than a person living on $30,000 in Manhattan because the rent and cost of living is so much higher.” — John Blodgett, programmer analyst at the University of Missouri Office of Social and Economic Data