How the wealth gap is reshaping politics | Xochitl Gonzalez

0:00With no fees or minimums on checking accounts, it's no wonder the Capital One bank guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how most Capital One cafes are open seven days a week to assist with your banking needs. Yep, even on weekends, it's pretty much all he talks about. In a good way. What's in your wallet? Terms apply. See CapitalOne.com slash bank. Capital One N.A. Member FDIC.

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2:10If you listen to Ted Business for conversations about leadership, navigating change, and unlocking innovation, I have another show for your rotation. It's called Founders Mentality, the CEO Sessions. It gets into the real decisions behind some of today's leading executives and companies. Not just what a CEO should do, but who a CEO has to become to do it. In their recent episode with Laura Burrow, Group CEO of The Economist Group, you hear how she walked into a divided organization and a transformation project that had already cost the company millions and made the call to scrap it. Instead, she pushed for a new approach, one that could fund itself and bring the business back together.

3:00She and host Jimmy Allen break down that choice, how customer data reshaped the company's priorities, and how The Economist is thinking about transformation now in the age of AI. Follow Founders Mentality, the CEO sessions from Bain & Company, wherever you get your podcasts. The anxiety of a group dinner is a hard feeling to shake. Maybe it's a birthday dinner for a friend or a meetup between coworkers. There are just so many factors that can easily bloom into conflict. Who you sit next to. If you can be heard over the din of a crowded restaurant. How you order as a group. But I always think about that last moment where your stomach is overly full and you know it's time to go home and there's just one thing standing in your way.

3:51The check. That little piece of paper stirs up so many big feelings and questions. How much was all this? Are we going to split it evenly? Is someone going to complain that they didn't order three drinks and an appetizer when someone else did? These questions often speak to our deeper feelings around money and how they can often differ from the people around us, even the people we feel closest to. It also speaks to the fact that we don't have a lot of social outlets where we can comfortably express our financial anxiety. And that's crazy, considering how many people are feeling the squeeze nowadays.

4:30In a society as stratified and polarized by economic inequality as ours, the inability to talk about money is hurting every facet of our lives, all the way to our democracy.

4:46I'm Madhupa Akinola. This is TED Business, a podcast from TED. Our speaker today is Xochitl Gonzalez, a New York Times bestselling author and Pulitzer Prize finalist. Here, she argues that wealth inequality isn't just an economic issue. It's a civic one. Economic inequality, she says, is like the heart disease of democracy. And it has to be treated before it's too late. One of the ways we can do that? Creating more avenues for us to talk honestly about our class position and how it affects the way we think and feel about money, including the way we vote. Then after the talk, I'll discuss how to be more honest about money in the workplace.

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7:42And now, Xochitl Gonzalez takes the TED stage.

7:48I'm here to tell you a story about getting a cup of coffee. Or I should say, attempting to get a cup of coffee, because when I went to pay for it, I couldn't. This is about a year and a half ago, and there was nothing wrong with my card's chip. The store's reader was fine. The problem was with my bank account. It was empty. Now, a rational person would have just taken out another card. But in that moment, there was nothing rational about me. My chest tightened, my jaw clenched, my cortisol spiked. I lost all awareness of a purse with a wallet and other pieces of plastic inside of it. and instead I just apologized profusely, walked out the door, and burst into tears.

8:31Dramatic, a tad, but my reaction had very little to do with who I am in this moment, a New York Times best-selling author, a Pulitzer Prize finalist, a homeowner, and it had everything to do with who I once was, a working-class girl from South Brooklyn who didn't grow up with much. Despite our nation's reputation as a land of opportunity, the truth is upward social mobility in America is actually quite arduous, and less than 10 % of people that start out like me on the bottom rungs of the economic ladder ever managed to make it to the top. And somehow, I did. So while it was a temporary problem paying for the coffee that day, you know, I moved things around, other accounts, that panic in my body was known from before.

9:18From 2009, when I was struggling to get my small business through the Great Recession. From 1998, when I was working my way through college and there was no other account to pull from or parent or relative to call. All the other times that I was living, like so many of my fellow Americans, from paycheck to paycheck. It's no secret that we are living in a time of wealth inequality not seen since the Gilded age, but too often it's talked about with the clinical distance of other people's problems, an inconvenience that we wish somebody would do something about. And far less discussed is the shared, urgent, like, threat that this poses to our democracy.

10:01And if we don't start talking about income inequality like the civic issue it needs to be, we will surely slide further towards autocracy than we already have, maybe irrevocably so. Part of the problem is, even though we're a capitalistic society, we fascinatingly hate talking about money. Like a lot of you, I have an aura ring and the day of the coffee incident, it told me I'd experienced an unusual amount of stress that day and it gave me a few reasons, work, bad sleep, and maybe it's because aura is from Finland, but money wasn't an option, which is unfortunate because in America, financial anxiety is linked to things like hypertension, depression, and even reduced lifespan.

10:50But it all got me thinking, well, if money can impact our health, how does having money or not having money impact our behavior and our thoughts? How does our socioeconomic situation impact the way we see politics and the way we vote. And for the last year, I have been on a deep dive into the sociology and psychology of social class. And what I've discovered may surprise you. We're accustomed to thinking about our social class as little more than a matter of what's in our bank account, if you own a home or if you rent. But scientists have found that your social class of origin plays nearly as large a role in shaping your identity as your race, gender, or sexuality.

11:32and that children become aware of their own social class standing just a little later than they become aware of their race and gender. In fact, kids as young as seven can, with outrageous accuracy, correctly identify somebody else's social class just by looking at a photo. Your social class doesn't just impact who you are. It impacts the way you think. It's one of the least discussed topics in America, and yet it's silently at play in so many aspects of our society. Growing up with resources or growing up in scarcity affects the way you see the world, your place in it, how you make decisions, and how you see big abstract things like the role of government or the very idea of democracy itself.

12:17See, the well-resourced child is born into a place of security. And with their basic needs having been met, their parents can set out to getting them to thrive. And in America, that often means distinguishing oneself as an individual. exhibiting agency, the choices one makes about extracurriculars, what college you go to, your career, and eventually your political party affiliation, these aren't just matters of selection. They are statements of identity and essentially the way you present yourself to the world. So if you want to think about a typical middle-class hero, it would be Neo from The Matrix.

12:54He's just toiling away in that office job, and then his hero's journey begins when he makes a choice. Will it be the red pill or the blue pill? Now, for the child born into scarcity, which is almost 40 % of children in America today, things are far more precarious. Security is not guaranteed. The world feels beyond your control because at any moment something could present itself, a landlord, an unexpected medical bill that throws everything into a tailspin. And so security is found in groups and conformity is encouraged. And expressing your own sense of agency is less important than staying true to who you are in the face of constant adversity.

13:33Think about the cop John McClane in the blockbuster hit Die Hard. He doesn't show up to that Christmas party looking for trouble, but he's going to fight for who he loves, his wife, and what he took a vow to defend, the law. These two groups don't just think differently, they rarely converge, living and working and worshiping separate from each other, essentially only socializing with people of very similar circumstances. And so individual worldviews convene and hearted into class cultures, cultures with very different ideas of what good governance and leadership even looks like. Now, for generations, America's humble middle class existed between these two groups, like cartilage between bone.

14:16But as the top 1 % of households has accrued the same amount of wealth as the bottom 90 % combined, that cartilage has grown thin. And essentially, our middle class has been replaced by a comfort class. The children of the upper class who on paper may not be rich, but who live with the security of a familial safety net. Often working the kind of mid-pay, high-prestige jobs that influence a lot of American culture and policy. And the result is almost a class apartheid, where a small group of people with generational wealth control a society whose culture they don't fully understand. Our politicians, many of which are millionaires, their staffers and consultants, all come from a place where money has afforded them a sense of agency and control, such that they have a tendency to overestimate their influence on politics and the power of their own supporters' votes.

15:14The donor class, unfamiliar with that physiological panic that need can induce, tend to vote on social issues and look to support candidates who mirror their values. But that need is still very, very real. An anecdote. In college, I was paired with a lovely roommate from an upper-middle-class background, and one night I decided to splurge and go and join her for an Italian meal out, carefully packing up my leftovers. But the next day, when I went to the fridge, my eggplant parm was gone, the victim of my roommate's late-night drunchie. I flew into a rage, and my poor, bewildered roommate could not understand.

15:56But to her, it was an inconsiderate snack, and to me, it was my next meal that I thought I'd already paid for. And now I was left to stretch my dollar another day. It's easy to judge people for voting based on the price of eggs when you are certain where your next meal is coming from. But for the financially struggling in America, politics, let alone democracy, can seem a secondary concern, and sometimes just an irrelevant one, which is why you see so many lower-income Americans not participating in democracy in the first place. And equally concerning is that often when they do, they tend to support authoritarian-leaning figures.

16:34From Hungary to Turkey, Senegal to the Philippines, researchers have found a consistent correlation between economic inequality, the decline of democracy, and the rise of strongmen leaders. The kinds of people that promise to fix working people's problems often by sowing divisions and blaming an other, which is a very reliable tactic because precarity also correlates to increases of racism and xenophobia. there's still yet another group that tends to emerge in these historic moments of deep economic disparity and they too see great benefit in autocracy and patronage and all sorts of other undemocratic practices in the gilded age we call them robber barons in post-soviet russia we call them oligarchs today we call them billionaires able to live above the law exchanging donations for business monopolies and government contracts for very different reasons than the financially struggling, they see great benefit in autocracy.

17:40Economic inequality is like the heart disease of democracy, so often ignored until it's too late, a threat to our very way of life. To fix it, we've got to stop distancing from each other and from the issue. We need to support candidates that will buttress the working and middle class, But we also need to know each other, to have empathy outside of our backyard, to cultivate compassion beyond our socioeconomic bracket, because it's so easy to rail online at strangers and much harder to ignore the problems of our friends and neighbors. Thank you.

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18:57They already deployed one. It's called Chat Concierge and it's simplifying car shopping. Using self-reflection and layered reasoning with live API checks, it doesn't just help buyers find a car they love. It helps schedule a test drive, get pre-approved for financing, and estimate trade in value. Advanced, intuitive, and deployed. That's how they stack. That's technology at Capital One. With no fees or minimums on checking accounts, it's no wonder the Capital One bank guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how most Capital One cafes are open seven days a week to assist with your banking needs.

19:36Yep, even on weekends, it's pretty much all he talks about. In a good way. What's in your wallet? Terms apply. See CapitalOne.com slash bank. Capital One N.A. Member FDIC.

19:56That was Xochitl Gonzalez talking at TED Democracy Philadelphia. Xochitl's words are a wake-up call to all of us. It may seem impolite to discuss money or politics around other people, but money and its involvement in politics influences the way so many of us are governed. In the long run, having these discussions can often be more important than our momentary feelings of social discomfort. So how do we have frank conversations about money with our friends, with our acquaintances, and yes, even our co-workers? As Sochil says, research shows that our social class of origin plays nearly as large a role in shaping our identity as our race, gender, or sexuality.

20:45Over time, we've created language for discussing these different identities. but there doesn't seem to be enough language in the workplace to discuss the way social class shapes who we are and how it influences the choices we make. And isn't that extremely relevant, given organizations are ideally made up of so many people from different backgrounds? I think this can be approached in two ways. First, in daily conversation, let's not avoid the topic, but instead make it a normal part of how we talk about ourselves. Second, maybe there are more formal venues in the workplace that can serve as an important outlet.

21:26I know that in our business school, we have a lot of forums where people can volunteer to share something about their lives. What if there was one dedicated to the way we relate to money? It's time for us to have more honest conversations about income inequality and wealth disparities in this country. And I think work environments are a prime place where these conversations can happen. That's it for today. TED Business is part of the TED Audio Collective. This episode was produced by Hannah Kingsley-Ma, edited by Alejandra Salazar, and fact-checked by Julia Dickerson. Special thanks to Maria Ladias, Farah DeGrun, Daniela Ballarezzo, Tansika Sangmanibang, and Roxanne Heilash.

22:15I'm Madhupa Akinola. Thanks for listening.

22:36VentureX Business Card from Capital One, you earn unlimited double miles on every purchase. And with big purchasing power, you can spend more and earn more. This is your sign to take your business to the next level. The Capital One VentureX Business Card. What's in your wallet? Terms apply. See CapitalOne.com for details. With no fees or minimums on checking accounts, it's no wonder the Capital One bank guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how most Capital One cafes are open seven days a week to assist with your banking needs.

23:09Yep, even on weekends, it's pretty much all he talks about in a good way. What's in your wallet? Terms apply. See CapitalOne.com slash bank. Capital One N.A. Member FDIC. With no fees or minimums on checking accounts, it's no wonder the Capital One bank guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how most Capital One cafes are open seven days a week to assist with your banking needs. Yep, even on weekends, it's pretty much all he talks about, in a good way. What's in your wallet? Terms apply. See CapitalOne.com slash bank.

23:50Capital One N.A. Member FDIC.