Meatloaf sang that 2 out of 3 ain’t bad. But what about one out of four?
I guess it was supposed to be a rudimentary experiment in cultural awareness, and the result quickly went viral because it was no ordinary group of respondents. No, they were students at one of the most prestigious business schools in America – Wharton – currently ranked number 2 by US News and World Report.
That’s where Nina Strohminger, a professor of legal studies and business ethics, asked her students what they thought the average American makes in annual wages? She then tweeted the response……
“I asked Wharton students what they thought the average American worker makes per year, and 25% of them thought it was over six figures. One of them thought it was $800k. Really not sure what to make of this (the real number is $45k).”
We don’t know the sample size… But 25 percent said over six figures. One student (we hope in jest) said 800k. The professor said the real number is 45k.
And The Washington Post reported that according to the social security administration, the average U.S. annual wage last year was 53 thousand, 383 dollars, with the median wage at 34 thousand, 612. The Labor Department reported that median weekly earnings in the fourth quarter of last year were a thousand and ten dollars, which comes out to an annual wage of $52,520.
That 75% of the students 3/4’s of the class got it right didn’t placate the blogosphere. As one tweet put it, “That’s the average of who they know, which is why rich people usually don’t feel rich.”
This was borne out by another who pointed out, “The median income of a family at UPenn is 195,500 and 71% come from the top 20%. Just 3.3% come from the bottom 20%. It’s presumably even worse in the Wharton Business School.”
Someone else tweeted a meme of the matriarch from ‘Arrested Development’ guessing that a single banana cost $10.
There’s a serious aspect to this, though, as noted in other tweets. “How does a business school not require any kind of economics class that actually discusses the existing economics of the US?”
Another: “Remember those setting economic policy are more likely to be Wharton (or similar) grads than having worked multiple minimum wage jobs.”
And, of course, that is the real concern. This was not some late-night television, man-on-the-street interview. These are future masters of the universe who will soon determine public policy. We’re currently experiencing the worst inflation in nearly forty years.
Over the last year, inflation rates were driven by cars, furniture, and other goods. You’ve seen the data [from the department of labor]…
Used cars – 37.3%
Hotel rooms – 27.6%
Furniture – 13.8%
New cars – 11.8%
Appliances – 6.0%
Shoes – 6.0%
Groceries – 6.5%
Clothes – 5.8%
Shelter (rent) – 4.2%
From November 2021 to December 2021, the inflation rates for the same items were:
Used cars – 3.5%
Hotel rooms – 1.3%
Furniture – 2.0%
New cars – 1.0%
Appliances – 1.1%
Shoes – 1.5%
Groceries – 0.4% (offset by drop in energy prices)
Clothes – 1.7%
Shelter (rent) – 0.4%
We would hope that future Wharton grads could figure it out, but if they can’t empathize with those most impacted, society will suffer. Many in the Twitter mob were eager to point to the privileged status of Wharton students. True. Tuition at Wharton school is about $80,000 a year. The average annual income for those living in the west Philadelphia neighborhood where Wharton is located, is about $34,000. 24 percent of Philadelphians live in poverty.
But being out of touch with neighbors cuts both ways. The social science suggests that the poor would be equally off base in estimating the income of the rich. To me, it’s all reminiscent of what Dr. Charles Murray described in his 2012 book “Coming Apart”. Murray, a provocative libertarian, argued that America is coming apart at the seams, not from race, but class. A large part of our problem, he posited, is that the people in working-class neighborhoods are no longer connected to the wealthy, denying the former a needed form of social order.
Murray argued that while there have always been rich and poor folks who had somewhat different customs and mores. But there used to be a lot of interchanges and it used to be that even the rich folks had grown up as either poor or middle class and knew what it was like personally. But all of this is changing, and ten years ago he wrote, it’s going to get worse.
This is what happens when power is concentrated in the hands of the new upper class, which lacks the requisite empathy to make decisions for the remainder of society. He was prescient. In the case of Professor Stohminger at Wharton, she tweeted:
“A lot of people want to conclude that this says something special about Wharton students— I’m not sure it does. People are notoriously bad at making this kind of estimate, thinking the gap between rich and poor is smaller than it is.”
She linked to a study from 20-11 published by researchers at Harvard Business School and Duke University which found that respondents back then, too, dramatically underestimated the level of wealth inequality. And that all demographic groups “desired a more equal distribution of wealth than the status quo.”
Using the perfect blend of analysis and humor, Michael Smerconish delivers engaging, thought-provoking, and balanced dialogue on today’s political arena and the long-term implications of the polarization in politics. In addition to his acclaimed work as nationally syndicated Sirius XM Radio talk show host, newspaper columnist, and New York Times best-selling author, Michael Smerconish hosts CNN’s Smerconish, which airs live on Saturday at 9:00 am ET.