Bill Mitchell-ek Errenta desberdintasunaz eta eskubiko mugimendu politikoez

Does rising income inequality explain the rising support for right-wing political movements?

https://billmitchell.org/blog/?p=62477

April 14, 2025

We know that after the Second World War, as nations embraced their major national policy statements (White Papers in many countries) to build their societies after the disruption of the War and the Great Depression, income inequality fell significantly. Since the 1970s, the post WW2 trend has been somewhat reversed in many (but not all) nations. The rising income inequality is particularly apparent in the Anglo advanced economies, with the US leading the way. In other nations, the trend is mixed, which suggests the link between rising income inequality and the rising support for right-wing political movements is less obvious than some commentators are suggesting. In fact, there is credible research that suggests the swing to right-wing political parties is not coming from the most precarious workers who appear to remain loyal to Leftist ideas. It is the next segment of workers up who have not yet been ravaged by globalisation but sense they are about to be who seem to have swung to the Right. In this blog post, I discuss some of these ideas and the research that is accompanying them.

It was no surprise that income inequality decreased after the peace came in the 1940s.

During the conflict, governments were able to levy relatively high taxes on the high income earners and wealthy.

For example, in the US the period 1937 to 1967 was labelled the – Great Compression – because government policy substantially reduced the spread in the wage distribution.

This ‘compression’ saw the highest marginal tax rate in the US reach 94 per cent in 1944 and remained at 91 per cent between 1945 and 1963.

The highest marginal rate since 2018 has been 37 per cent and in 2025 the cut off threshold “for individual single taxpayers” was $626,350 (Source).

In Australia, we saw a similar trend.

In 1950-51, the top marginal tax rate was 75 per cent to

In 2025, the highest rate is 45 per cent.

Stronger unions also played their part through their successful efforts to negotiate better pay and conditions for their members.

In the US, the Bureau of Labour Statistics publication – Union Members 2024 – shows ‘density’ rate (or coverage) which is the proportion of workers belonging to a union was 9.9 per cent in 2024.

The peak density was 25.7 per cent in 1953 (Source).

In Australia the same downward trend.

From 51 per cent in 1976 to 13.1 per cent in August 2024 (Source).

This 2011 study – The rise and decline of Australian unionism: a history of industrial
labour from the 1820s to 2010 – shows that the peak density was in 1948 when the proportion of workers in trade unions was 64.9 per cent.

It was still 62 per cent in 1954.

Similarly, as governments embarked on their nation-building exercises after WW2, they significantly increased their expenditure on social welfare as part of a commitment to a – Welfare state – and social democratic policy structure.

The generosity and scope of the social welfare support varied between nations and the work of Danish sociologist – Gøsta Esping-Andersen – helps us understand the different dimensions and reasons for these differences.

He distinguished between “liberal welfare states” (for example, US, Canada and Australia), “conservative, corporatist welfare states” (for example, Austria, Italy, France and Germany)”, and “Socialist (or social democratic) welfare states” (for example, the Scandinavian systems).

The reality is that since the 1970s, the generosity and scope of the support provided has been significantly retrenched in most nations.

The US-based Center on Budget and Policy Priorities – A Guide to Statistics on Historical Trends in Income Inequality (published December 11, 2024) – notes that:

The years from the end of World War II into the 1970s were ones of substantial economic growth and broadly shared prosperity …

Beginning in the 1970s, economic growth slowed and the income gap widened.

The 1970s marked the beginning of what we now call the neoliberal era which has become characterised by the sort of trends described above.

In the more recent period, we have also seen the splintering of political preferences among voters in many countries with the decline in support for the traditional mainstay parties on either side of the fence and increasing attention being placed on the more extreme, particularly extreme right parties.

I have been doing some research on the links between these trends – the socio-economic and the political – as part of a broader project on the poly crisis and degrowth.

One article I read recently was published in 2020 in the Journal of European Public Policy – The threat of social decline: income inequality and radical right support (library access needed) – which seeks to join together the rising income inequality and the increased popularity of “radical right wing parties … in Western democracies”.

There has not been much formal academic research seeking to examine whether the former (rising income inequality) is statistically linked and causal in the rise of right wing political support.

This article is an exception and uses the extensive dataset supplied as part of the – The International Social Survey Programme – which began in 1984 and produces “annual surveys on diverse topics relevant to social sciences” – my area of study.

The authors of the JEPP study extracted data from the ISSP database for 14 OECD countries spanning three decades.

I won’t discuss the methods and research design and you can consult the article if you are interested.

I found no major issues with the techniques and approach used.

Their motivation was informed by the extant research.

Some researchers have found that the radical right parties (RRPs) are becoming more popular because there is:

… a growing group of people who feel ‘left behind’ in the processes of globalisation and economic modernisation over the past several decades … [and] … Feeling threatened by increasing economic, cultural and political openness, they sympathise with RRPs that promise to put the nation and its people first.

The authors argue that we can adequately summarise this ‘left behind’ angst in a statistical setting using “income inequality”.

They note that:

… rising income inequality is an important indicator not only of the extent to which some groups have fallen behind compared to others, but also of the potential decline in society that people higher up in the social hierarchy could face.

Various sociological and psychological theories have been advanced to support this notion.

1. Relative deprivation – advanced by British sociologist – Garry Runciman – refers to “feelings or measures of economic, political, or social deprivation that are relative rather than absolute.”

The poorest people in advanced countries are probably better off in a material sense than the poorest in poor countries.

But relative to their society they advanced country poor feel poor.

J.K. Galbraith was very clear that the “relative differences in economic wealth are more important than absolute deprivation”.

There have been many studies linking increased relative deprivation to all manner of bad things – political instability, crime, etc.

If this was relevant in the current situation (rising RRPs) then the political support for these RRPs should be concentrated at the lower end of the income distribution.

2. The work of Norwegian economist Karl Ove Moene and US political scientist Michael Wallerstein on so-called risk theory suggests that “higher income inequality increases the perceived risk of economic and social decline. Individuals may worry about losing income or social status, leading to economic insecurity”.

This impacts on the “middle-income individuals” who are predicted to turn to RRPs because they “promise to address anxieties about decline by opposing globalisation and open labour markets” and shield them from major income loss.

3. The 2017 work by Allison and Jan Rovny – Outsiders at the ballot box: operationalizations and political consequences of the insider–outsider dualism – published in the Socio-Economic Review (library access required) – considers the ” emerging dualism between the so-called labor market ‘insiders and outsiders’ — two groups facing divergent levels of employment security and prospects” and the “electoral behaviour”.

They found that: (a) “outsiders are less likely to vote for major right parties than are insiders, and that outsiders are more likely to abstain from voting”; and (b) “occupation-based outsiders tend to support radical right parties, while status-based outsiders rather opt for radical left parties —a finding supported by the association between social risk and authoritarian preferences.”

This approach also suggests that it will be the middle-income workers who sense their position in the labour market is being undermined by global trends that will increasingly support the RRPs.

So overall, the research is somewhat mixed on how rising inequality might drive people to support and vote for these RRPs and which people will turn in this political direction.

The results of the author’s detailed econometric study investigating these ideas are summarised below:

1. “The probability for RRP support is significantly higher among the lower-middle income quintile compared to the bottom quintile.”

2. “Even the middle quintile tends to have a higher propensity of RRP support than the lowest income group”.

3. “In substantive terms, the effects of income are modest.”

4. The income “effects pale compared to education (3.32 percentage point difference between tertiary and non-tertiary educated respondents) or social class (4.24 percentage points difference between socio-cultural professionals and production workers).”

5. “rising income inequality increases the likelihood of RRP support and that this effect is most pronounced among individuals with high subjective social status and lower-middle incomes.”

6. “The long-run effect of inequality … is large in substantive terms”

7. “In increasingly unequal societies, therefore, anxieties about social decline seem to matter more for RRP choice than does actual deprivation.”

8. “in societies that have grown more unequal, the radical right has a substantial electoral potential among high-status individuals, not among those whose subjective status has declined the most”

9. “For the most deprived groups with lowest social status, income inequality is more plausibly associated with radical left party support, which promote strongly redistributive platforms”.

Those results resonated with the work I am doing at present.

For example, in countries like the US and Australia the measure of income inequality (Gini Coefficient) has risen substantially since the 1980s (and earlier for the US).

But in Germany, the rise has been modest and in the UK the Gini coefficient has fallen in recent years after rising substantially under Thatcher’s period of rule.

And in France, despite the rising popularity of Marine Le Pen’s Rassemblement National (RN) party the Gini has declined significantly.

A 2024 study by Ugo Palheta on who is driving Le Pen’s political support – Extrême droite: la résistible ascension – found that the neoliberal period has increased the job insecurity for low- and low-to-middle income earners, which white ants the stability conditions that social democracies were founded upon.

The political implications of these trends have occupied the minds of social scientists and the plausible narrative is that Le Pen’s popularity is a direct result of increasing job insecurity.

It is clear that the lower income workers have increasingly supported RN.

But the 2024 study finds nuances that are interesting.

It sought to differentiate the type of economic dislocation that is statistically related to support for RRPs.

The workers most damaged by increasing job insecurity and casualisation do not seem to be flocking to RN.

Indeed, RNs support among the working class is coming from segments that are more secure with higher pay, which the author suggests is a reflection of the need to differentiate their ambitions from migrants and the poor.

These workers also do not support Leftist notions of worker solidarity, which means there is a fundamental contradiction between the attacks on globalisation and the support for neoliberal individualism, which needs further analysis.

There are strong racist overtones (particularly against Muslims) in the cohort that supports RN.

The other interesting thing I am working on is the link between political parties in government and the shifts in income inequality.

A tentative conjecture is that it has been the traditional social democratic parties from the 1980s that have been captured by neoliberal perspectives and overseen the largest shifts in inequality, which were then consolidated or accentuated when the conservative side of politics followed the social democrats into power.

A related conjecture is that when in opposition, the traditional social democratic politicians ratify the policies that have worsened the income inequality and undermined the security of the working class.

Conclusion

Anyway, I hope some of those ideas and research outcomes are of interest.

They speak to the challenge facing Leftist political movements in arresting the tide towards RRPs.

They also suggest that even though politicians like Donald Trump (and the Tea Party mob before him) will undoubtedly worsen the lot of the most disadvantaged, it is highly likely he will continue to extract political support from these groups.

That phenomenon needs more analysis.