Saturday, February 16, 2013
President Obama proposed an increase in the minimum wage in his State of the Union address this week, and according to polls, that policy is broadly popular, even among Republicans. But researchers at Princeton University and Harvard Business School have detected a startling trend in support for the minimum wage: it dips among the people who make just above the minimum wage.
The current federal minimum wage is $7.25 an hour, and about 85% of people who make that amount of money or less support an increase in the minimum wage, according to the study. Support jumps to almost 95% among people who make between $8.26 and $9.25 and would benefit from an increase as well. But among hourly wage workers, the lowest level of support for an increase comes, surprisingly, from people who make just above the minimum wage, between $7.26 and $8.25.
This surprising trend helps explain another startling political trend over the last few decades: Support for policies that redistribute wealth and reduce income differences has plummeted, according to the General Social Survey, which asks Americans every year whether government should do more to reduce income inequality. In 2010, the number of people who told the General Social Survey that they oppose redistributive policies was at its highest level in decades. So the researchers asked: Why do people who would benefit from policies that redistribute income gains oppose those policies?
The researchers propose a theory: people don’t want to end up in “last place.” An increase in the minimum wage would benefit people at the low end of the income scale. But, as the researchers found, people who make just above the minimum wage don’t want to become minimum wage workers themselves. They don’t want to end up in “last place” on the income scale. They’d rather make just above the minimum wage, even if it means making less money overall. It’s a fascinating finding, and one that helps explain a lot about the politics of wealth redistribution and inequality in the United States.

President Obama proposed an increase in the minimum wage in his State of the Union address this week, and according to polls, that policy is broadly popular, even among Republicans. But researchers at Princeton University and Harvard Business School have detected a startling trend in support for the minimum wage: it dips among the people who make just above the minimum wage.

The current federal minimum wage is $7.25 an hour, and about 85% of people who make that amount of money or less support an increase in the minimum wage, according to the study. Support jumps to almost 95% among people who make between $8.26 and $9.25 and would benefit from an increase as well. But among hourly wage workers, the lowest level of support for an increase comes, surprisingly, from people who make just above the minimum wage, between $7.26 and $8.25.

This surprising trend helps explain another startling political trend over the last few decades: Support for policies that redistribute wealth and reduce income differences has plummeted, according to the General Social Survey, which asks Americans every year whether government should do more to reduce income inequality. In 2010, the number of people who told the General Social Survey that they oppose redistributive policies was at its highest level in decades. So the researchers asked: Why do people who would benefit from policies that redistribute income gains oppose those policies?

The researchers propose a theory: people don’t want to end up in “last place.” An increase in the minimum wage would benefit people at the low end of the income scale. But, as the researchers found, people who make just above the minimum wage don’t want to become minimum wage workers themselves. They don’t want to end up in “last place” on the income scale. They’d rather make just above the minimum wage, even if it means making less money overall. It’s a fascinating finding, and one that helps explain a lot about the politics of wealth redistribution and inequality in the United States.

Notes

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    Joe says federal government should never butt into private sector wages. Free market should base wages depending on...
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    What is wrong with people, shouldn’t they also worry about being in constant danger of losing their current jobs and...
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    This goes to show that being well-off is to a large degree subjective and relative
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