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Income Inequality Depresses Support for Higher Minimum Wages

Year: 2025

Type: article

Abstract: The minimum wage can be an effective policy tool for mitigating economic inequality, but public demand for higher minimum wages has not kept up with rising levels of income disparities. In our first study using protest attendance data over a six-and-a-half-year period in the United States (N = 130,562), we find evidence that higher economic inequality was associated with fewer and less well-attended protests targeted at changing economic conditions and raising minimum wages. We corroborate this finding across eight laboratory experiments (N = 7,286)-including a U.S. nationally representative sample-finding causal evidence that higher levels of income inequality decrease support for higher minimum wages. We propose that this decreased support results from a psychological tendency to engage in "is-to-ought" reasoning, where individuals use information about how much people actually earn to determine how much they should earn. We conclude by introducing an intervention to mitigate the effects of this phenomenon and discuss implications for policy communication.

Source: Carolina Digital Repository (University of North Carolina at Chapel Hill)

DOI: 10.17615/7dfq-6488

Authors: Larrick, Richard P., Payne, B. Keith, Davidai, Shai, Goya-Tocchetto, Daniela, Lawson, M. Asher

Institution: University of North Carolina at Chapel Hill

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Reduced inequalities, No poverty, Decent work and economic growth

Open Access status: green

OpenAlex ID: W4414589016

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