Arkansas and Missouri will increase their minimum wage as a result of midterm election initiatives, and additional ballot measures are in the works in other states for 2020.
By studying minimum wage increases in a global context, more can be learned about the health implications minimum wage increases pose for low-income populations in the U.S. and beyond, according to a global health and human development policy expert at Rice University’s Baker Institute for Public Policy.
Farhan Majid, the L.E. and Virginia Simmons Fellow in Health and Technology Policy at the Baker Institute, have weighed in on the topic.
“Although it is well-known that poverty and income inequality can have disastrous health consequences, knowledge about the effectiveness of minimum wages in improving population health is limited,” Majid wrote in a recent op-ed in The Hill. “Minimum wages may be most effective among the more-skilled and richer groups, but can have unintended effects on the low-skilled and low-income groups who they are meant to support the most.”
Majid and colleagues published a study in 2016 that examined the impact of minimum wage legislation on children’s health in low- and middle-income countries (LMICs).
The researchers found that increasing the minimum wage can lead to higher unemployment, particularly among women of childbearing age who, in turn, may be less likely to avail themselves of health services critical to shaping child nutrition and stunting levels.
To carry out the analysis, the researchers used a measurement known as the height-for-age z score (HAZ). This number indicates how a child’s height compares to the mean height of children his or her age. HAZ is an important proxy for progress on remediating malnutrition and hunger, which was prioritized by the United Nations Sustainable Development Goal 2 for 2030.
The researchers obtained the HAZ scores of almost 140,000 children up to 5 years old who were born between 2000 and 2013 in 49 LMICs across Africa, Asia and Latin America. The children were all from urban areas. The researchers combined the HAZ data with information on government-mandated minimum wages over the same time span. Then they looked at the effects of changes in minimum wages around the year of birth — which is widely understood to be a critical period in child development — on HAZ scores in the first five years of life.
“After accounting for other variables, we found — perhaps counterintuitively — that an increase in minimum wages is associated with a decrease in HAZ scores in lower-income countries,” Majid said. “This modest adverse effect was most pronounced in South Asian nations. There, a 1 percent increase in minimum wages led to a 0.8 percent decrease in HAZ scores. We also found that this adverse effect was greater among children whose parents engaged in manual labor and who lived in the poorest families.
“We find suggestive evidence of increased maternal unemployment up to five years after an increase in minimum wages, which lends credence to this mechanism,” Majid said.