Jan 20th 2020
OF ALL THE tactics governments employ to raise living standards, few stir as much controversy as the minimum wage. Advocates claim that minimum wages help boost earnings in industries with too little competition, and prevent workers from being exploited. Critics maintain that, by setting an arbitrary floor on pay, minimum wages reduce overall employment, particularly among low-skilled workers. Now a group of epidemiologists at Emory University in Atlanta say the minimum wage has other benefits that have been overlooked.
A new paper in the Journal of Epidemiology & Community Health finds that as well as raising earnings, minimum wages may also improve workers’ mental health. Using data from all 50 American states and the District of Columbia from 1990 to 2015, the authors estimate that a $1 increase in the minimum wage is associated with a 3.5% decline in the suicide rate among adults aged 18 to 64 with a high-school education or less. This may sound small, but the numbers add up. The authors reckon that a $1 increase would have prevented 27,550 suicides in the 25 years covered by the study; a $2 increase would have prevented 57,000.
Minimum wages may have life-saving effects. But they are no panacea. The authors point out that, even if American lawmakers had raised the minimum wage back in 1990, the country would still have suffered a sharp increase in suicides (see chart). There are several measures policymakers could take to reduce such “deaths of despair”, which killed 47,000 Americans in 2017. Stricter regulations for firearms, which were used in over half of suicides in 2017, could make a dent; spending more on mental-health care could also help.
There are no easy solutions to such a complicated problem. But reducing economic distress for America’s lowest-paid workers might be a good place to start.