In this space yesterday , I provided an overview of how widespread income inequality is in North Carolina. As a brief reminder, North Carolina households in the top fifth hold more income than all of the remaining households combined in the state. Although income inequality hit a modern high  last month in the United States, a 2011 study  found that a lot of Americans’ hold a perception that does match up with this reality.
Duke Professor Dan Ariely and Harvard Professor Michael Norton asked approximately 5,500 Americans (whose median income was $45,000) how they thought wealth is actually distributed in the nation. The study found that Americans perceived the distribution of wealth to be more equal than it actually is. In fact, 92 percent of respondents said their optimal level of inequality was even more equitable than their flawed perceptions, meaning they want to live in much more equal communities.
By definition, wealth includes more than just income—like assets and debt. However, the respondents’ answers shed light on just how much Americans underestimate disparities. This is a good time to reflect on how our misperceptions of reality impact our policy choices, especially if our aim is to build pathways to the middle class and restore the American Dream.
If you want to learn more about income inequality from Hedrick Smith, a legendary journalist and national expert on the topic, consider attending the next NC Policy Watch Crucial Conversation on October 23rd. Details are here and be sure to RSVP early .