How morality and efficiency shape public support for minimum wages

Abstract

We use a survey-based experiment to examine public support for minimum wages. To start, we elicit respondents moral assessments of two labor market systems: one with a minimum wage and one without. We find that gender and political affiliation are the strongest predictors of moral assessments, where men and Republicans find the lack of a minimum wage less problematic. Next, we present four pairs of hypothetical employment outcomes and ask respondents to “vote” for their preferred system. Estimating the trade-off between moral attitudes and unemployment, we find the average respondent is willing to tolerate a large increase in unemployment, 4.7 percentage points, before voting against the minimum wage system. Our point estimates, however, mask considerable polarization: 42% always choose the minimum wage system and 27% always choose the no minimum wage system. Overall, Republicans are 14.5 percentage points less likely to choose the minimum wage system, though they exhibit little difference in willingness to tolerate additional unemployment. Notably, racial and gender equity considerations matter. The average respondent is almost 20 percentage points less likely to choose the minimum wage system when told minorities and females are disproportionately affected. Finally, the average respondent is 7 percentage points less likely to support a system featuring a minimum wage of $15 relative to $10.10 or $7.25, all else equal, suggesting that support for minimum wages may not be driven by a desire to maximize aggregate income for low-wage workers.