Societal Income Inequality and Coping with Work-Related Economic Stressors: A Resource Perspective

Abstract

Despite the prevalence of increasing income inequality in today’s society, research on the implications of such inequality for organizational- and job-related outcomes is scant. This chapter proposes to explore the contextual role of societal-level income inequality in influencing how employees cope with work-related economic stressors. We use Conservation of Resources theory as a foundation, which posits that individuals are embedded within their social contexts; these social contexts can threaten individuals’ resources; and those who lack resources are more vulnerable to resource loss. Thus, we argue that societal income inequality can threaten individual resources in the form of objects and conditions. First, income inequality may threaten one’s obtainment of object resources because societies with high-income disparity tend to have fewer employment protections, shorter duration of unemployment benefits, and lower union density and coverage. Second, income inequality may threaten one’s obtainment of condition resources because income inequality may divide community members and make people trust others less. Taken together, we contend that income inequality can serve as an environmental stressor exacerbating employee reactions to economic stressors.