Why workers ignore some pay cuts but fight others

Researchers combined lab experiments and real gig-work data to measure how workers adjust hours when pay changes. They found workers behave two ways depending on context: when expectations are front-of-mind, they show loss aversion (fighting a 10% cut harder than they'd pursue a 10% raise); when expectations fade, income effects vanish and they shift toward simple neoclassical economics. Framing matters enormously—the same wage cut either triggers elastic resistance or gets absorbed, depending on whether workers anticipated it.