Posted: April 19th, 2021
By: Katherine Brock
Nearly eight years ago, fast food employees in Seattle marched out of work and into the streets, launching a strike—and ultimately a movement—for a $15 minimum wage. Within two months, the strike spread to more than fifty cities across the country, forcing many restaurants to close temporarily amid cries for higher wages and the right to organize. Today, Seattle residents enjoy a minimum wage between $15 and $16.69 an hour depending on the size of the employer, but the movement that spurred change in Seattle—and even the state of Washington—has yet to succeed on a national scale. Why is that?Unfortunately, the scope of the policy debate surrounding the national minimum wage lacks breadth—focusing primarily on economic factors such as poverty and unemployment—and should be expanded to include health outcomes. The debate itself is tired. Economists, policymakers, and business owners continually disagree as to the impact of raising the federal minimum wage on poverty and unemployment. Moreover, a likely reality is that any significant adjustment to the minimum wage may help some Americans financially while hurting others, even those whom the policy is intended to benefit. For example, the nonpartisan Congressional Budget Office estimates that achieving a $15 federal minimum wage by 2025—a proposal recently rejected by the U.S. Senate—would hoist 1.3 million Americans out of poverty while causing another 1.3 million to lose their jobs.
Now is the time to broaden the discussion. Poverty and low-income status are correlated with poor health outcomes, so why are health outcomes not privy to the wage debate? More than 20% of low-wage workers don’t have health insurance, which is consistent with the percentage of uninsured Americans with family incomes below the poverty level. Given that the uninsured population often bears the blame for rising healthcare costs due to uncompensated care, it is curious that the health needs of low-wage workers and, by extension, potential benefits to the healthcare economy are not part of the public wage discourse.
Moreover, there is an absence of scholarship examining the direct effect of federal minimum wage adjustments on health outcomes. A 2019 literature review published in Preventive Medicine identified only thirty-three appropriate studies examining minimum wage and public health, the majority of which were conducted between 2016 and 2018. The review found many studies unsuitable for determining the direct impact of minimum wage on health outcomes because such studies conflated minimum wage workers with other low-income workers or did not distinguish part-time youth employees from full-time adult employees attempting to support families.
To effectively understand and address changes to the federal minimum wage, healthcare access, outcomes, and disparities must be: (1) studied at the national level, taking into account race and ethnicity, age, familial status, and household income, among other important socioeconomic factors; (2) examined in light of regional differences (e.g., cost of living, rural vs. urban settings, etc.); and (3) brought to the forefront of the policy debate alongside poverty and unemployment. Alternatively, in the absence of reliable studies reporting the potential impact of proposed wage increases on health outcomes, we may turn to public health statistics based on poverty; however, doing so has its limitations. For instance, the nonpartisan Government Accountability Office’s September 2017 analysis of Current Population Survey data found that only 20% of families with a federal minimum wage employee lived in poverty in each of six years assessed. This highlights the critical shortcoming of the minimum wage debate: living in poverty and working for minimum wage are not the same. Conflating the two by focusing the policy debate so narrowly on poverty and unemployment fails to acknowledge and address the needs of a significant population of minimum wage workers whose family incomes simply exceed the federal poverty level. For reference, the federal poverty level is currently $26,500 for a family of four.
Washington state not only illustrates its capital city’s success story, but it also reinforces what we have discussed about the diverse, yet oversimplified, population of minimum wage workers. A very recent study conducted by the University of Washington, which linked National Health Interview Survey data to state wage policies, reported no significant change in health outcomes tied to higher minimum wages. However, the same study also reported mixed health effects among subgroups, such as women and people of color. Co-author Heather Hill stated, “[t]hese mixed results shine a spotlight on segments of the population that need to be studied in relation to rising minimum wages in order to learn how best to achieve the goal of reducing inequality with adjustments to the minimum wage.” Well said. Until outcome studies are prioritized on a national scale and used to inform policymaking, America will do no more than continue its tired and inconclusive debate of the federal minimum wage.