Income inequality undermines support for higher minimum wages

(Press-News.org) High levels of income inequality weaken support for raising the minimum wage, which in turn could further worsen income inequality as people believe this is the way things should be, according to research published by the American Psychological Association. 

The researchers analyzed data from more than 130,000 protests across the country and conducted eight other experiments that found that an “is-to-ought” reasoning error may be to blame where people view situations as they are and then infer that is the way they should be. That can have detrimental effects for society, especially for those earning low wages, said co-lead researcher M. Asher Lawson, PhD, an assistant professor of decision sciences at INSEAD (European Institute of Business Administration) in Fontainebleau, France. 

“When the rich earn dramatically more than the poor, people often infer that the rich should earn dramatically more than the poor,” Lawson said. “As a result, the presence of higher income inequality ends up legitimizing itself in the minds of the public. This, in turn, undermines support for policies such as higher minimum wages that could reduce inequality.”

While there have been increases in some local and state minimum wages, Congress hasn’t approved an increase in the federal $7.25 hourly minimum wage since 2009 despite significant increases in inflation and the cost of living since then. A single adult working full time at the federal minimum wage earns $15,080, which falls below the federal poverty level used to determine eligibility for some government aid programs, such as Medicaid and food-purchasing assistance. 

The research was published online in the Journal of Experimental Psychology: General. 

The study included archival data from more than 130,000 protests across the United States held between 2017 to 2023, including estimated crowd sizes, the issues being protested, and a measure of the economic inequality in the counties where the protests occurred. Higher local levels of economic inequality were associated with both fewer and less well-attended protests, but only when these protests concerned economic issues, such as raising the minimum wage. 

In eight additional experiments, participants were presented with some economic distribution data for hypothetical societies. When inequality was higher, participants supported lower minimum wages and reported that people earning the lowest incomes deserved to be able to buy fewer goods and services. 

“When inequality is high, the rich are perceived to need and deserve more, and the poor are perceived to need and deserve less,” the journal article stated. “The present research suggests that because of is-to-ought reasoning, having enough to meet one‘s needs cannot be fully separated from inequality.”  

The researchers were surprised by some of the findings relating to the participants’ political beliefs, said co-lead researcher Daniela Goya-Tocchetto, PhD, an assistant professor of organization and human resources at the State University of New York at Buffalo.   

“Conservatives consistently supported lower minimum wages regardless of the income distribution they viewed in the hypothetical societies, but liberals were more likely to support lower minimum wages when income inequality increased,” Goya-Tocchetto said. “While well-intentioned liberals seemed to more carefully consider the economic conditions of the societies they viewed, this also rendered them more sensitive to is-to-ought reasoning errors.”  

The findings, which were limited to a U.S. cultural context, highlight that campaigns to raise the minimum wage may be ineffective if they focus solely on the high level of income inequality, Lawson said. 

“Emphasizing that levels of inequality are high may have the inadvertent effect of normalizing the higher levels,” Lawson said. “Our studies suggest that a more effective technique could be stressing how much lower inequality could be and making salient that higher minimum wages are a key pathway to achieve that goal.” 

A final experiment with more than 1,900 participants offered some hope for change and a means of combating is-to-ought reasoning. A control group received income inequality data for some hypothetical societies similar to the prior experiments, while the remaining participants were allowed to alter that income distribution data as they saw fit. The intervention group’s minimum wage suggestions were less affected by the degree of inequality they saw, illustrating that they were less susceptible to is-to-ought reasoning when they were encouraged to think about how things could be instead of just how they are.  

Article: “Income inequality depresses support for higher minimum wages,” by Daniela Goya-Tocchetto, PhD, State University of New York at Buffalo; Matthew Asher Lawson, PhD, INSEAD; Shai Davidai, PhD, Columbia University; Richard P. Larrick, PhD, Duke University; and B. Keith Payne, PhD, University of North Carolina at Chapel Hill; Journal of Experimental Psychology: General, published online May 29, 2025.


Contact: M. Asher Lawson, PhD, may be contacted at asher.lawson@insead.edu. 
The American Psychological Association, in Washington, D.C., is the largest scientific and professional organization representing psychology in the United States. APA’s membership includes 173,000 researchers, educators, clinicians, consultants and students. Through its divisions in 54 subfields of psychology and affiliations with 60 state, territorial and Canadian provincial associations, APA works to advance the creation, communication and application of psychological knowledge to benefit society and improve lives.

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