High Pay Gets Higher, Low Pay Gets Lower
This chapter studies the effects of wages on health. A 2018 health policy brief in Health Affairs highlights fluctuations in wages and how population health reflects these changes. In the brief, the authors emphasize that the labor market does not strictly follow basic economic assumptions. In particular, an increase in wages may not reduce quantity or quality of work, as an economist critiquing minimum wage hikes might expect. Instead, the study’s authors argue that increased wages can improve productivity by boosting morale. Wages between 1979 and 2013 rose notably only for those with very high pay; people in the middle wage group have not seen much of an increase in pay over the years. Meanwhile, those with very low wages have almost exclusively seen drops in their pay over the decades. The study authors then explain how increases in the minimum wage can positively impact health, citing prior research on the connections to lower smoking, fewer missed work days, and improved birthweight. With many states looking to raise their minimum wages, the authors recommend that those still caught in the debate should approach the decision from both a health and economic perspective.