Greater income inequality can decrease public support for raising the minimum wage.
Income inequality between countries may have eased in recent decades, but the gap within nations continues to widen. Take France: Its poverty rate clocked 15.4 percent in 2023, the highest since records began in 1996. The gulf between the country’s richest and poorest also deepened, approaching levels not seen since the early 1970s.
Governments have tried to address this growing chasm through redistributive policies like increasing taxes for high-income earners, providing cash and in-kind support to low-income groups, and raising the minimum wage.
The latter’s impact can be seen in Brazil, where economists found that minimum wage increases since 1994 were responsible for a 30 percent drop in income inequality, as well as the United States, where minimum wage hikes following the landmark 1963 March on Washington helped shrink the racial income gap by 20 percent.
There’s a compelling argument to be made for higher minimum wages being a pathway to reducing economic inequality. One might therefore expect public support for this to increase when inequality spikes. But in our paper published in the Journal of Experimental Psychology: General, my co-authors* and I found that this isn’t the case.
Views on income inequality
To explore how public sentiment can influence minimum wage policies, we zoomed in on protests as a signal of public opinion across the US. We analysed data from over 130,000 protests across US counties between 2017 and 2023. The results were somewhat unexpected: In counties with higher levels of income inequality, there were both fewer and less well-attended protests focused on economic issues such as raising the minimum wage.
To dig deeper, we ran a series of experiments to better understand the psychology behind this pattern. In some studies, we asked participants to make minimum wage policy suggestions after learning about fictional societies with different levels of income inequality. In another study, participants learned about a society with either high- or low-income inequality and were asked what goods and services those earning the minimum wage should be able to afford.
We accounted for the role of political ideology by examining whether political liberals and conservatives responded differently to income inequality scenarios. Across the board, we found that when inequality was higher, participants supported lower minimum wages. They also believed that low-wage workers in societies with greater income disparity needed less to meet their basic needs, essentially adjusting their expectations downwards when inequality was high.
What is and what ought to be
Although many forces besides public opinion shape support for minimum wage policies, you’d expect that widespread frustration with rising inequality would exert pressure on policymakers to tackle the issue. And yet, our research suggests that rising inequality doesn’t necessarily trigger public support for higher minimum wages. This may help explain why inequality continues to persist within many countries despite broad awareness of the problem.
We suggest this is due to what we call an “is-to-ought” reasoning error: People tend to look at the world as it is and then assume that’s how it ought to be. In other words, we tend to accept and justify the status quo. In the context of income inequality, that means the current distribution of wealth shapes beliefs about how much people should earn. When inequality is high and the rich earn more than the poor, people often infer that the rich deserve more and, conversely, the poor deserve less.
This mindset can explain why public calls for higher minimum wages have not kept pace with the reality of income inequality. The latter is legitimised in the minds of the public, which undermines support for policies meant to narrow the gap. This could have detrimental effects for society, especially for low-income workers.
What about differences between people with contrasting political beliefs? We found that political conservatives consistently supported lower minimum wages. Political liberals, on the other hand, generally favoured higher minimum wages, but were more sensitive to the context. For example, when shown a fictional society with high inequality (relative to low), they decreased their recommended minimum wages to a bigger extent than political conservatives did.
This highlights just how powerful the status quo can be in shaping our judgements, even among those predisposed to support redistributive policies. It could explain why, even in countries with politically liberal beliefs like France, high levels of inequality may not lead to meaningful wage reforms. This is what happens when people are too constrained by the existing reality when considering how things should be.
Gaining support for higher minimum wages
The tendency to endorse lower minimum wages when inequality is higher seems at odds with many people’s values and policy preferences. This disconnect raised an important question for us: Could a simple shift in perspective help bridge the gap?
In one of our studies, we tested a possible intervention: Instead of getting participants to evaluate a society with a large income disparity on its own, they were asked to compare it to a society with a smaller income disparity. When people viewed the two societies side by side, they prescribed higher minimum wages overall. In other words, the contrast changed how they thought.
When individuals evaluate economic conditions in isolation, what “is” tends to be powerful enough to override their beliefs about the ideal minimum wage. In real life, they may tend to focus on features of their own society (such as how much people on low incomes earn), rather than on comparative judgements. This could explain why minimum wages haven’t kept pace with rising inequality.
A more effective technique to change their perception could be to emphasise how much lower inequality could be and stress that increasing minimum wages can help us get there. Comparing unequal societies directly with more balanced ones highlights this contradiction and helps people apply their own values and principles more consistently.
We built on this idea in another study, where participants were shown the income distribution of a fictional society and had the opportunity to alter it to represent what they thought was ideal. They then viewed both the original and their modified version side by side and were asked to establish minimum wage levels for each setting. This exercise closed the gap in wage prescriptions across inequality scenarios, showing that people are less likely to fall into “is-to-ought” thinking when they picture how things could be instead of just how they are. This offers hope for change.
There’s a broader lesson here for policymakers and advocates. Highlighting the severity of the problem when garnering support for change can backfire. Instead, focusing on what’s possible and helping people envision better alternatives may spark more public support – not just for higher minimum wages but also other policies that promote economic fairness and opportunity.
