Perceived Gaps in Equity Affect Decisions More Than Absolute Gaps

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Imagine this scenario: You walk over to a coworker’s office to leave a note, and as you drop it on the desk, you notice that he has left his latest paystub laying around. You don’t mean to look, but you can’t help it – and you discover that he is taking home significantly more money than you, despite having similar job responsibilities and years logged at the company. The satisfaction you had with your salary immediately disappears. What do you do next?

That depends. There’s a good chance that discovering the salary information will have a negative impact on your well-being, mental health, and even physical health, according to research reviewed in Policy Insights from the Behavioral and Brain Sciences. That’s because it creates an experience of relative deprivation, or RD, which occurs when people compare themselves to others who are better off and feel that the inequity is unfair or undeserved, explain psychologists Heather Smith and Yuen Huo. Relative deprivation is associated with a range of negative outcomes, from depression to susceptibility to the common cold.

Perceptions of relative deprivation, which can be experienced at either an individual or group level, are more distressing than actual deprivation, because seeing what others have is an in-your-face reminder of what we wish we had (and believe we deserve). “RD is useful because it explains why those who should feel deprived by objective standards often do not, whereas those who are not objectively deprived often feel that they are,” the researchers write. It explains why you could be more dissatisfied with your salary after seeing your coworker’s paycheck than someone in your office who works at a much lower paygrade who is unaware of the gap. It also explains why a middle-class person living in a wealthy neighborhood might actually feel more distress about her income or housing than someone with less income who lives in a neighborhood of people with similar socioeconomic status.

Although RD is usually experienced as a negative, reactions by individuals and groups vary. The long-term effects of the paystub incident might differ for you and for a third coworker with whom you share the information, based on factors like whether you feel angry or sad, whether you feel the salary decisions have been made fairly, and whether you believe they can be changed. If you get angry about the inequity, you are more likely to confront your boss or take other action to remedy it, whereas if your coworker feels saddened by the information, she may withdraw and put in less effort or even leave the company. But to take action, you also have to believe that there is an opportunity for change, to feel, for example, that your boss will hear you out and act fairly.

“System openness… can channel the angry resentment” associated with RD and lead to change, the researchers point out. And practices that the researchers call procedural justice are important for reducing experiences of group RD, such as gender and racial discrimination. They can lead groups to engage in helpful actions like political advocacy rather than “non-normative, deviant, or confrontational” reactions like violence.

RD research has implications for social policy. For example, it highlights some unintended consequences of policies designed to improve social mobility, like vouchers for low-income families to move to more advantaged neighborhoods or send their children to wealthy private schools. These moves can lead people to make upward social comparisons that they didn’t make when the gap in their economic or social status wasn’t as visible. Policymakers might want to rethink these policies, the researchers suggest, or at least reduce the likelihood and impact of RD by including large numbers of families in the interventions to increase social support and making meaningful efforts to welcome and incorporate families into their new environments.

At a larger level, policies should tackle rapidly growing income inequality in the U.S. by simultaneously improving transparency about the gaps and creating opportunities for change and mobility. People are more likely to advocate for changes like increases in the minimum wage when they are fully aware of and think they can change trends like enormous pay gaps between CEOs and their employees. (Recent studies showed that the heads of top U.S. companies earned well more than the average worker’s salary — and 350 times what unskilled workers make.) The U.S. Securities and Exchange Commission, for example, will require that publicly traded companies divulge the ratio of their CEO’s compensation to the median of the company’s employees.

This approach could apply on a smaller scale, too, like at your company. If your manager has an open-door policy and empowers employees to advocate for themselves, finding out about your colleague’s salary could actually be helpful in the long run. But if not, you might want to think twice the next time you have a chance to sneak a peek at a coworker’s paycheck.

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