The potential benefits of raising the federal minimum wage continues to be a matter of controversy among economists. Proponents of a minimum wage hike believe it would reduce poverty and decrease income inequality. Skeptics argue that it would lead to fewer jobs and higher prices. Now, further complicating this already complicated debate, there’s new research on some of the long overlooked non-market benefits of higher wages.
Two recent studies have found that higher mandated hourly wages lead to healthier babies at birth. The first, titled “Effects of the Minimum Wage on Health” and published as a working paper by the National Bureau of Economic Research, compared the birth weight, fetal growth, and gestation length of babies born to women with low educational status from states with different minimum wages. They rely on data from 1989 through 2012, a period during which the federal minimum wage went from $3.35 to $7.25, and higher in states where mandated wages supercede the federal minimum. (One caveat: The researchers did not know whether these women worked minimum wage jobs, only that they are the population most likely to do so and therefore experience the effects of minimum wage fluctuations.)
They found that there was a “small, significant and beneficial effect of a minimum wage increase on birth weight due to both a decrease in preterm birth (increase in gestation) and increase in fetal growth (gestation‐adjusted birth weight).” Also, they discovered that higher wages led to greater prenatal care and reduced maternal smoking—possibly a result of the greater prenatal care.
The second study, titled “The Effect of an Increased Minimum Wage on Infant Mortality and Birth Weight” and published by the American Journal of Public Health, was similar in design and tracked the effect of state minimum wage changes on birth weight and infant mortality between 1980 and 2011. They found that “a dollar increase in the minimum wage above the federal level was associated with a 1% to 2% decrease in low birth weight births and a 4% decrease in postneonatal mortality.” Based on these figures, they say that a $1 increase to the minimum wage across the country in 2014 would have likely led to 2790 fewer low birth weight births and 518 fewer postneonatal deaths during that year.
Roughly 60 percent of all minimum wage earners are women, and, according to the Department of Labor, two-thirds of them have children. When these babies are born premature, or before 37 weeks, they have a higher risk of infant mortality and long-term neurological problems. Studies have found that women with low incomes are at a higher risk for premature births, which some explain as a result of the high rates of high blood pressure, obesity, smoking, diabetes, drug use, poor prenatal care, and poor overall maternal health within the demographic. A 2007 report from the Institute of Medicine found that the cost associated with premature births, including treatment of health complications and lost work and pay, was upwards of $26 billion a year in the United States.
As the authors of the first study point out, the research on minimum wage is consistent with previous studies done of the positive effect the Earned Income Tax Credit has on infant health. They conclude that this should inspire economists and policy-makers to broaden the minimum wage discussion beyond the confines of its effect on the economy and personal income. “Wages can affect wellbeing in broader ways than often considered,” they write. “These ‘other’ effects of the minimum wage should enter the debate over its merits.”