The Psychology of Raising the Minimum Wage
By David Nussbaum
Barry Schwartz discusses the psychology of anchoring in Slate and how raising the minimum wage would affect other wages as well.
You might be suspicious that raising the anchor set by the minimum wage will not have this general effect. After all, employers are pretty savvy. They know about what the labor market has to offer. They know how much they can raise their prices without suffering. Surely these factors will influence wage-setting rather than an externally imposed anchor. If you think this, you underestimate the power of anchors. They have effects even among extremely sophisticated people.