Latest minimum wage increase will not improve people's health, well-being: SCP

The recent increase in the minimum wage will not affect the health and well-being of the group receiving that extra money for the next four years, according to the Social and Cultural Planning Office (SCP). Only after four years will there be a limited influence. More than income measures are needed to improve minimum wage earners’ quality of life.

“In that, it is good to look at measures that contribute to behavioral change, such as making healthy products cheaper or encouraging people to exercise more.”

As of January 1, the government increased the statutory minimum wage and the associated benefits by 10 percent. Previous research has shown that people in lower-income groups have poorer health and lower well-being on average. But according to the SCP, the increase in the lowest incomes will lead to little or no improvement in their mental and physical health over the next four years. On average, it will not contribute to less use of medicines, less mental healthcare, or a higher satisfaction with life.

It is really a question of the longer term, the SCP said. Positive health and well-being effects could occur later, especially in children. “They may benefit from the increased income of their parents. For example, if this allows them to play sports more or have less stress because there is more financial security at home.” However, a substantial reduction in the differences in health and well-being between income groups is not expected, the SCP emphasized.

The effect is too small, and the approach too general. “In order to reduce the health and welfare inequalities of the low-income group, a financial policy that focuses specifically on risk groups seems more promising than the current, fairly generic income policy.” Measures to solve debt problems, for example, not only help people to get rid of those debts but also relieve stress.

However, the government’s recent financial measure is “essential” in this time of inflation to prevent more people from falling into poverty.

And a higher income in itself does not automatically lead to an improvement in health and well-being, the SCP noted. “For example, more income could also lead to more smoking and alcohol consumption.”