The Minimum Wage and Consumer Nutrition
The USDA estimates that 1 in 9 U.S. households is “food insecure”: unable to purchase sufficient, or healthy food. Public policy advocates and politicians have pointed to the prevailing federal minimum wage as a culprit, labeling it a “starvation wage.”
This paper examines whether and to what extent increases to the minimum wage can improve the quantity and nutritional quality of food purchased by minimum wage earners. We show that households earning the minimum wage increase their calories purchased in response to minimum wage increases, primarily during the weeks of the month in which they had previously been more budget-constrained.
By contrast, households do not improve the nutritional content of calories purchased in response to the minimum wage. Why? Are households unable to do so, perhaps because past minimum wage increases were insufficiently large? Or are households disinclined to change what they eat? We find more support for the latter explanation.
Overall, our findings suggest that while increasing the minimum wage may help households afford much needed calories, it is not a panacea for food insecurity. Policy-makers aiming to promote healthier eating may need to leverage alternative policy instruments shown to do so, such as “sin taxes.”