Effects of Minimum Wages on Population Health
Research indicates that an increase in minimum wages can have important health benefits—a finding that is relevant to public debates about both health and economic policy.
What's the Issue?
Stagnant wages are at the forefront of U.S. policy debates. It is widely acknowledged that increases in minimum wages lift the earnings of employed low-wage workers, although there is less agreement about the effects on poverty and employment. Research into the effects of minimum wages has typically addressed economic concerns, and it has addressed health only recently. This brief primarily addresses three questions: 1) Why does the minimum wage matter? 2) What does research over the past 50 years suggest about the effects of minimum wage increases on unemployment and poverty (two factors that can affect health)? and 3) What does recent research suggest about the effects of minimum wage increases on the health of low-wage workers and their families?
Research into the effects of minimum wages on health is rapidly expanding. At least three mechanisms could link higher wages to changes in health status. Higher wages could allow workers to afford both health improving and health-harming products and services; result in greater job satisfaction, which would improve health; or increase economic incentives to work more hours, which could either improve or harm health.
The preponderance of evidence suggests that increases in minimum wages decrease smoking and the number of days with health limitations and increase birthweights among infants of low-wage or low-skilled workers. Effects are more mixed for other populations such as teenagers and non-continuously employed adults.
Policymakers should consider both the possible health and economic effects of raising minimum wages. Future research should more precisely distinguish between groups likely to be affected by such a change and those not likely to be affected.