How the rich control policymaking

The United States of America is a democratic country. Over the past few decades, however, important questions about policy and budgets have been decided overwhelmingly against the interests and preferences of the middle and working classes. When the preferences of the rich and the middle class come into conflict, the rich tend to win.

Matt Grossmann, a political scientist and the director of the Institute for Public Policy and Social Research at Michigan State University, is working on a project to expand upon the work of Martin Gilens and Benjamin Page, whose bombshell paper last year revealed the impact of economic inequality on public opinion in the U.S. As part of his research, Grossmann examined 50 proposals in the Gilens data set on which opinions between the wealthiest Americans and the median voter diverged the most.

“Many of the largest income-based differences in public opinion on policy issues concern core issues affecting inequality like taxes, business regulation and social welfare,” Grossmann explains in an interview. “On these issues, the richest citizens are more opposed to new redistributive policies than the poor and they usually get their way.” The core areas in which the rich have disproportionate influence are stopping liberal economic policies and pushing forward liberal social policies. The chart below, created from his data, shows that there are large divides between the rich and other respondents on policies related to redistribution.

Of the policies listed on the chart, the only one that was passed within four years was the North American Free Trade Agreement, which was opposed by the lowest-income voters and the median voter. On the other hand, the three policies supported by the bottom and middle deciles but opposed by the richest decile — ranging from tax increases to workplace protections — never passed. Across the board, the richest are most skeptical of redistributive policies.

The data also reveal the persistent bias in favor of the status quo in American policymaking. As Grossman notes, “Only 14 of the 50 proposals were adopted, even though the rich were more supportive than the middle class in over half of the proposals.” Over the full data set, Gilens notes that even in cases of when the overwhelming majority of the public supported a policy, the policy change was achieved only 43 percent of the time. Status quo bias overwhelmingly benefits the rich.

The data set also speaks to the agenda-setting power of the rich. Some questions that the middle-class and poor broadly favored are no longer on the agenda. For instance, the policy proposal to “Require employers to give employees a year notice before shutting down their place of work,” raised in 1985, is no longer under consideration, though 72 percent of median-income respondents favored it at the time. And although 67 percent of respondents favored “creating a government-owned and -operated oil corporation to keep the private oil companies honest in their pricing and their operations,” this question too has faded from the public dialogue. As Paul Burstein notes, there simply aren’t any public opinion data on many of the issues that Congress decides on.

A comprehensive study by Grossmann finds that public opinion was a significant factor in 25 percent of policy changes since 1945. More influential factors have included interest groups (49 percent) and presidents exercising political capital (60 percent).

Why? First, public opinion is volatile, particularly among low-income people. While the rich are consistently in support and the middle class consistently opposed, the lowest decile fluctuates between support and opposition. As political scientist Chris Tausanovitch notes, “Although the preferences of higher income constituents account for more of the variation in legislator voting behavior, higher income constituents also account for much more of the variation in district preferences.” In other words, because low-income Americans have less clearly defined preferences, their opinions vary less, so politicians may be less likely to respond to them.

Political scientists Joseph Daniel Ura and Christopher Ellis argue that less-educated individuals, who are disproportionately low-income, are less likely to align their preferences about government size with class interest. This suggests that higher income opinion is more clearly defined.

Second, the decline of labor unions makes it difficult for low-income Americans to accurately identify and lobby for policies that are in their interest. In a recent study, political scientists Torben Iversen and David Soskice show that low-income people with little political information and who aren’t union members are more likely to support a right-wing party than those who are members of a union and high political information. Their work lines up with that of Anthony Fowler and Michele Margolis, who find that informing people about Republican and Democratic policies using objective information leads them to shift toward supporting Democrats.

Finally, there are good reasons to believe race, which is intimately tied to class in the U.S., may play a role in representation. James Stimson, a leading scholar of public opinion, argues that race could account for many of the gaps in policy preferences across income groups. A recent study using the Gilens data set suggests that people of color receive far less representation than whites, a view supported by other research. In addition, the fact that high-income people are more likely to vote and contact their representatives also makes it likely they will receive more representation.

There is certainly research that suggests constituents can influence legislation. For example, a recent study by Jeff Smith, a former state senator and now an assistant professor of politics and advocacy at the Milano School of International Affairs, shows that contacts from constituents affect the passage of legislation. But it also shows how the rich exercise influence. While 21 percent of those with an income below $30,000 reported contacting a government official, 49 percent of those earning $150,000 or more reported doing so.

According to a survey designed to examine the political activities of the top 1 percent, 55 percent of the wealthy reported contacting public officials. When the wealthy contact officials, they are more likely to report receiving a response. This could explain why political scientists David E. Broockman and Christopher Skovron find that both liberal and conservative policymakers systematically believe their constituents are more conservative than polls indicate, since the most conservative constituents are most likely to engage with the political system.

In short, policy is biased toward the rich. Diagnosing how this bias occurs is the key to prescribing remedies. It’s clear that lack of effective mobilization — in terms of voting and other political activities — is at the core of disproportionate representation. The overwhelming power of the donor class further hampers equal representation.

There are many possible solutions. Automatic voter registration would reduce barriers to participation in election. This step is being implemented in Oregon, which has already added 10,000 voters since the beginning of the year. Other states are likely to follow. Stronger unions would be able to push more successfully for policies that benefit the working and middle class. Finally, public financing of elections would create a more diverse pool of donors.

All of these policies are favored by majorities of Americans. The problem is that this might not matter.