Aiding low-wage workers is a matter of life and death — literally

Deaths from alcohol, drugs and suicide have increased markedly over the last 20 years, reversing a century-long trend of rising life expectancy in the U.S. 

These “deaths of despair” are now greater than the number of motor vehicle-related fatalities each year. Many of these deaths could be prevented through better support for people with mental illness and those with substance use disorder.

Our new study, released through the National Bureau of Economic Research, finds that modestly increasing wage supports for low-wage workers could save over 1,200 lives each year.

The minimum wage and the Earned Income Tax Credit (EITC) are widely regarded as effective policy levers to raise incomes of low-wage workers. Our team investigated whether suicides would fall in response to changes in these two policies.

Building on research that finds a strong link between financial stress and depression and suicide rates, we hypothesized that raising incomes would reduce stress on household finances and thus prevent suicides.

We examined state and federal increases in minimum wage and EITC policies over a 16-year period, seeking to pinpoint their potential effects on suicide and drug-related deaths for people aged 18 to 64. We focused on the number of suicides among people with high school education or less, the group most affected by the two policies.

Previous studies have found that suicides fall when unemployment falls, such as during the long recovery from the Great Recession. These studies lend credence to a connection between economic conditions and suicides, but they do not establish a causal effect of the economic policies themselves.

For example, fewer people may attempt suicide when they have access to mental-health professionals, and more people have such access when a growth in employment increases the number of people with health insurance. The key causal factor in such a scenario is access to mental-health care, and it is undoubtedly important. 

Our study is the first to systematically examine a direct causal connection between the increases in income generated by the minimum wage and the EITC and suicides. 

We found that non-drug-related suicides indeed dropped substantially after states implemented more generous policies. The largest effects were on women, who are more likely to work minimum-wage jobs and be eligible for the EITC.

Meanwhile, we found no reductions for college-educated workers, who are unlikely to be affected by either policy. Taken together, these findings suggest that these policy changes actually caused a drop in suicide rates, not merely that the two variables were linked, as other studies have previously found.

All in all, increasing both the minimum wage and the EITC by 10 percent would likely prevent a combined total of over 1,200 suicides each year. 

Yet neither policy significantly affected drug-related deaths, which have risen due to the greater availability of illegal opioids, heroin and fentanyl.

To reduce these deaths, we need coordinated efforts that will involve policy change, community empowerment and evidence-based interventions to promote responsible opioid use, reduce the supply of illegal drugs and support overdose treatment and prevention. 

Time and again, economists have found that minimum-wage policies increase income and reduce poverty while having very little to no negative effects on employment. Additionally, research on the EITC finds that it increases employment among mothers and has positive effects on maternal mental health. 

The new findings in this study suggest that the benefits of minimum wage and EITC policies are even broader than previously thought.

A bill in the House of Representatives would raise the federal minimum wage gradually to $15 by 2024. Meanwhile, a recent National Academy of Sciences report recommended a major increase in the EITC to reduce U.S. child poverty.

Amid a growing body of work linking income and health, our research points to a substantial public-health benefit of using these policies to raise incomes of low-wage workers.

While we have yet to find a silver bullet to fix our country’s troubling decline, these policies can be part of the solution to slash the increasing levels of “deaths of despair” in the U.S.

Michael Reich, Anna Godoey and William H. Dow are all researchers at the University of California, Berkeley. Christopher Lowenstein, a graduate student, contributed to this piece.