Rising inequality is making Americans less likely to support a higher minimum wage

By Kevin Manne

BUFFALO, N.Y. — Raising the minimum wage can help address economic inequality, but support has declined as the gap between rich and poor has increased, according to new research from the University at Buffalo School of Management.

Available online ahead of publication in the Journal of Experimental Psychology General, the study found that economic inequality magnifies the gap between the rich and the poor: As inequality increases and the poorest in society earn relatively less than the rich, people believe they should earn less and they support lower minimum wages. 

The decrease in support for higher minimum wages results from people’s tendency to believe that things should be the way they currently are. This tendency is based on a phenomenon known as “is-to-ought” reasoning — a philosophical distinction between statements about what is (facts) and what ought to be (values, morals, norms).

“The way we see things affects what we think is fair,” says study co-author Daniela Goya-Tocchetto, PhD, assistant professor of organization and human resources in the UB School of Management. “Through our study, we discovered that as inequality increases and people see low-income workers earning less, they often conclude that they should earn less, contributing to a cycle that makes inequality harder to fix.”

To examine why demand for higher minimum wages hasn’t kept up with rising levels of income disparity, the researchers analyzed more than 130,000 protests held across the U.S. between 2017 and 2023 and found that in counties with higher income inequality, protests about economic issues such as wages were less common and had lower attendance than protests about other issues. 

In addition, the researchers conducted a series of eight experiments with more than 7,000 participants, and found that people consistently recommended lower minimum wages in fictional high-inequality societies, even while acknowledging those societies were less fair. But, when they presented two societies side by side — one more equal, one less equal — participants were more likely to adjust their recommendations and support higher minimum wages for the more unequal society.

The study also found that political ideology plays a role in perception, and that liberals were more affected by the study’s changes in inequality than conservatives. 

“Because liberals pay more attention to inequality, they are more more vulnerable to is-to-ought reasoning, despite their values,” says Goya-Tocchetto. “Conservatives were found to be less responsive to changes in inequality, possibly because they are already less likely to support policies like a minimum wage increase.”

To counteract the biases that normalize inequality, the researchers say policymakers and advocates should show clear examples that compare societies with different levels of inequality to restore support for minimum wage policies.

“The simple intervention of presenting contrast can help people align their values with their decisions,” says Goya-Tocchetto. “It’s a powerful reminder that how we frame inequality matters.”

Goya-Tocchetto collaborated on the study with M. Asher Lawson, PhD, assistant professor of decision sciences at INSEAD; Shai Davidai, PhD, assistant professor of business at Columbia Business School; Richard Larrick, PhD, the Hanes Corporation Foundation Professor of Business Administration and professor of management and organizations at the Duke Fuqua School of Business; and B. Keith Payne, PhD, professor of psychology and neuroscience at the University of North Carolina at Chapel Hill.