In January, Ontario’s Liberal government approved legislation that would increase the minimum wage by 75 cents to $11/hour. And in March, Saskatchewan followed by increasing theirs by 20 cents to $10.20/hour. While this has ramifications for labor and the economy, it also impacts the patients in our healthcare system.
This minimum wage rise came right on the heels of a campaign in which Ontario healthcare workers advocated for a $14 minimum wage. Healthydebate.ca had a lively debate between Dr. Ritika Goel and Mike Craig. Dr. Goel and other advocates argued that increasing the minimum wage would increase the income of the poorest patients, thereby improving their health. While this seems like a logical argument, does the evidence agree? The answer might surprise you.
The debate regarding whether or not minimum wage would help improve patient health is grounded in two ideas. The first is that minimum age would increase income of the poorest patients; the second is that increased incomes would improve health. The evidence is far more convincing for the latter than the former. Public health data shows that as you move down the income ladder, morbidity increases and life expectancy declines. Lower income individuals more likely have unhealthy working conditions, little drug coverage, and poorer health practices. Of course, actors beyond income—such as personal choices, genetics, and culture—influence health. Dr. Lightman best summarized this topic in a 2008 Wellesley Institute report: “high income does not ensure good health, but poverty almost inevitably guarantees poor health”.
Unfortunately, there is not convincing evidence that minimum wage increases will improve the income of low-income earners. There is the dogmatic economic argument: that a minim wage discriminates against low skilled workers. Employers will either cut back work hours, or hire workers who are skilled enough to justify such a wage. This is supported by a rigorous 2006 systematic review by the National Bureau of Economic Research. The review looked at over a hundred studies, including five from Canada, and concluded that the majority of studies showed a negative relationship between employment and minimum wage increases. Of the five Canadian studies, three found a negative employment effect with minimum wage increases. The other two studies found that increases had positive effects in the short term and for temporary workers, but negative effects in the long run and for permanent worker.
If minimum wage hikes cannot improve patient income, what can be done? One approach is to improve social mobility via education. Even if patients start at a low income, access to high quality education and retraining programs can raise family incomes and indirectly improve health. While our social mobility is greater than the US, we ranked 5th out of 12 countries among OECD nations. Policies that aim to increase accessibility to post-secondary education for underrepresented groups—such as First Nations and low-income people—and improve elementary education is a starting point.
Unfortunately, improving education in the near future is difficult given the complexity and various stakeholders involved. However, behavioral economics research may provide more actionable and creative policy solutions. In the book “Nudge: Improving decisions about health, wealth, and happiness”, economists Richard Thaler and Cass Sustein argue that instead of using traditional incentives and penalties, policies should be grounded in evidence about human behavior. One example is organ donation: governments could increase organ donation rates by mandating that drivers answer organ donation questionnaires in order to renew their license. Similar nudging strategies could be used for health-related initiatives such as promoting exercise and quitting smoking.
Of course, there are many sociocultural factors complicating patient income and health. The famous Roseto effect—in which a small Pennsylvania town filled with Mediterranean immigrants had cardiovascular disease rates well below the national average—showed researchers that a cohesive social structure could improve health. A more modern example is the educational and financial success of certain ethnic groups, such as Asian Canadians. These factors complicate matters for physicians and policy makers trying to abridge health inequality.
Let me be clear: I believe that physicians should advocate for economic policies that improve their patient’s income—it is both our fiduciary and moral imperative. But we also have an obligation to look at the empirical evidence and act accordingly: the evidence is not in favor of a minimum wage rise. Physician advocates should refocus their efforts on other policy areas such as “nudging” and social mobility. If we do not take the same evidence-based approach that we use in clinical medicine, we may undermine this and future advocacy efforts.