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.
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The other issue is when population health or health equity is the subject who is the ‘expert’. Research on minimum wages is obviously not a standard health care topic. Those with expertise are typically economists who not only possess the skills and complex tools, but a deep awareness of the relevant models and literature. So while many are aware of the 2006 NBER paper on minimum wage, there have been a wide variety of other publications on the topic identifying a number of effects, both positive and negative, between minimum wages, income and employment. Even restricting the search to the NBER pulls up a number of research papers that widen the discussion:
– The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment http://www.nber.org/papers/w16533,
– The Unexpected Long-Run Impact of the Minimum Wage: An Educational Cascade http://www.nber.org/papers/w16355 (a paper that interestingly suggests that the minimum wage effect might actually effect ‘social mobility’ in that it fosters an ‘educational cascade’ increasing years of high school because it is theorized the number of jobs for students decreases),
– Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater? http://www.nber.org/papers/w18681
Then there are recent publications from the Ontario government that review the literature from a variety of nuanced perspectives.
– http://www.labour.gov.on.ca/english/es/pubs/mwap/section_03.php
– http://www.fin.gov.on.ca/en/publications/2007/Gunderson/
Therefore, to cite a single review paper – despite its high recognition and respect – and fail to tease out the complexity of findings is not a good foundation for policy development – economic or health policy alike. Like any complex policy issue there are ‘pros and cons’ or ‘side effects’ that must be weighed. Like most policy research the basis for investigation should be multi-disciplinary and cross-sectoral. If there is any basis for rejecting minimum wage as a policy to improve health it should be the simple fact that there is no research (that I am aware of) that actually investigates the intersection of minimum wage policy and health status outcome. We are well aware of the income-health relationship, but far less informed about specific policy mechanisms that influence that relationship. This is the critical issue.
Hey Ron,
Excellent points. I agree with you that policy should not be based on a single paper, despite how cited it may be. I simply cited the paper as it is a rigorous systematic review that summarizes many other papers and includes Canadian studies. The point, however, is not that minimum wage is a bad policy. It is that there is not enough evidence to say that an increase will increase overall incomes such that it will improve health. As you stated, the evidence is mixed and different papers come to different conclusions. I would not argue for a policy of no minimum wage or a reduced minimum wage. I would simply argue that as physicians, we should focus our advocacy on areas in which their is strong evidence in favour of a certain policy. Simply put, we would get more “bang for our buck” advocating for other policies than we would with minimum wage.
Hi Gagan, fair comment although I again emphasize to make sure to be clear about the population health goal (i.e., health improvement vs social fairness)
And I would go further, especially if “bang for out buck” is the health objective. In my final sentence I make reference to a native elders smoking and his social environment. Earlier, Andreas Laupacis drew attention to the issue of lower income populations and the effectiveness of nudge, shove or smack. Over four decades we have seen dramatic drops in the rates of smoking – but a persistent and resilient population of smokers among the low income/low education population. This is despite many different forms of health promotion including nudge approaches.
What it suggests is that nudge/shove has a decreased utility within certain population groups – and the factors that influence the decreased utility are closely associated with social conditions. Again, this is not a new insight or argument as it has been recognized in the health promotion field pretty much from day one. So nudge might be effective when dealing with mostly upper or middle class populations and social environments, it might actually produce a much smaller or no bang for the buck in relation to population groups most in need of health interventions. U-shaped? One runs the risk of investing large amounts of time and resources for the least vulnerable populations – with the added kick of actually increasing health differences.
So overall I am not convinced the theory and evidence underlying nudge is as strong as you suggest.
On a side note, I am not sure why there is so much attention to nudge since many elements of the approach have been in use for at least four decades. Yes, elements might be described as new, but I think some of it might be that the world of economists has suddenly woken up to what sociologists and psychologists have known for many years. There is a clear link with the emergence of “behavioural economics” over the last few years. But really all behavioural economics (and its policy cousin, nudge) is doing is acknowledging that previous models of “economic man”, “rational man” and “maximizing utility” do not reflect the complex reality of human decision making and behaviour.
That being said, there needs to be further exploration and testing of nudge approaches. Just lets not assume too much bang for the buck just yet.
One important consideration when discussing population health and health equity is the end goal. Many coming from the perspective of population health view the social determinants as ‘health strategy’. Fair enough. However, those who emphasize health equity often tend to have a wider lens that is more in sync with social justice advocates. What is meant by this is that health is simply an indicator, not a goal. From this perspective, health inequalities or inequities are viewed as a very sensitive indicator of the fairness of social arrangements (World Health Assembly, 1986). The end or goal is social fairness.
I believe it was Margaret Whitehead who made the provocative observation that even good slave owners were concerned about the health and well being of their slaves and would take steps to ensure their slaves were healthy. But the fact that a slave might live longer in better health does not change the fact that the social arrangements of slavery are fundamentally unjust.
From this framing, one cannot simply substitute improving social arrangements with ‘nudge’ techniques that might reduce harmful activities such as smoking among low income populations because health improvement is not synonymous or interchangeable with social justice. As one native elder once said, ‘why should I quit smoking if all it means is I get more of this’ (as he swept his hand across the background of poor housing on a reserve).
Thanks Gagan. Can you provide a couple of examples of nudge strategies that would increase exercise and decrease smoking?
Andreas,
Thank you for the comment. Here are some nudge strategies for smoking and exercise:
http://nudges.org/tag/smoking/
http://nudges.org/2011/01/24/a-gym-membership-where-you-pay-more-if-you-dont-workout/
The first link describes how Texas anti-smoking campaigns used peer pressure–one of the most influential factors in teen smoking–to try to dissuade teens from smoking! The notion is that if you can show teens that smoking is “uncool” and not done by most, teens are less likely to smoke.
The second link talks about a strategy regarding increasing exercise via fees. That is, if you do not visit the gym at least X number of times per month, you’re bill is higher than if you did. While this may sound like a traditional financial incentive-based approach, the key is that it is based in behavioural economics research.
London (UK) has been very active in promoting nudge policies. Here is an article about nudging strategies in the public health context:
http://www.local.gov.uk/documents/10180/11463/Changing+behaviours+in+public+health+-+to+nudge+or+to+shove/5ae3b9c8-e476-495b-89b4-401d70e1e2aa
Now something I did not mention in my article is that the whole “nudge” policy paradigm is certainly controversial. Opponents cite that the notion of nudge is grounded in deceiving people, and that policies can be used in malevolent ways. Here is one article outlining the ethics:
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3867635/
Cheers!
Thanks for this, Gagan. I enjoyed reading the links, especially the one from the UK that described public behavioural interventions as “nudges”, “shoves” or “smacks”.
Your Opinion piece was about improving the health of folks with lower incomes, and I must say I didn’t see any examples that I thought would work well in that population. Most of them can’t afford any kind of gym membership. If high calorie food continues to be cheaper than healthy food, it may not matter how much of the super market display is devoted to healthy foods. Sorry to drag this out, but any examples of effective nudges for people with lower incomes?
Finally, I am always amazed by the negative reaction to some public health policies that just seem sensible to me, such as Mayor Bloomberg’s move to limit the size of sugary beverages sold in New York city.
Hey Andreas,
That is a fair point. I would offer the following retorts.
First, I would argue that although the anti-smoking campaigns do not target individuals based on incomes, they would have a disproportionally positive effect in lower income individuals given that their tobacco usage is higher. My argument was not that nudge policies can be tailored to low income individuals to help them. It was that since many unhealthy behaviours and outcomes are disproportionally higher in low income individuals, nudge policies could have an especially positive effect for such individuals.
Second, nudge policies are just one of many possible policy solutions. In an earlier paragraph, I cited improving social mobility and education. In subsequent paragraphs, I eluded to the role that culture plays in determining health. I raised nudge policies in order to encourage Healthydebate readers to think of some creative policy solutions. Nudging is not a magic bullet by any means.