Campaigners seeking to raise the minimum wage will need to fine-tune their targeting based on a large scale randomized trial that recently found that the people closest to being minimum wage earners themselves were the most reluctant segment of the population to support an increase.
While we have always known that people don’t want to see themselves as poor – even if they are below the poverty level – this study suggests it is much more complicated, owing to something the researchers call “last place aversion.” The theory goes that if you are in the second lowest cohort, right above the bottom rung, you are more likely to reward people above you when forced to make a choice. In this case, reward those with higher incomes rather than those with lower incomes. The results show that Americans prefer to be second to last rather than dead last, and so gains for the lower group are avoided.
While counter-intuitive, low wage workers, especially those near the bottom shouldn’t be called upon to support an increase in the minimum wage.