Americans — 14. 8 percent — were living in poverty in 2014.
For children under 18, the rate was 21. 1 percent.
That situation is not the norm in most other industrialized
nations. As Smith cites in her article, an analysis by economist
Timothy Smeeding, PhD, and colleagues found that while the
United States had the second-highest overall income level of
the world’s 19 wealthiest nations, it also had the third-highest
percentage of citizens living in poverty (Center for Policy
When it comes to the complex factors that create and
perpetuate poverty, minimum wage is only one piece of the
puzzle. Still, Smith says, “minimum wage reform seems like
such an obvious place to start.”
Research has demonstrated that increasing incomes can
improve mental health outcomes for people in poverty. Some
evidence comes from a natural experiment that occurred in
the 1990s, when a tribe of Cherokee Indians in North Carolina
opened a casino and began distributing a share of the profits to
all of its members.
Jane Costello, PhD, at Duke University, had already been
following a sample of those families when the royalty checks
started coming in. Poor children in her study population had
more psychiatric problems than those who had never been
poor. But among families who moved out of poverty after
receiving the casino stipends, the rate of children’s psychiatric
problems fell to the same level as those who had never been
poor (JAMA, 2003).
Lisa Strohschein, PhD, at the University of Alberta, saw
a similar pattern when she analyzed data from the U.S.
Department of Labor’s National Longitudinal Study of
Youth. Initially, children in families with household poverty
experienced higher levels of depression and antisocial behavior.
But the incidence of those issues declined in families whose
incomes rose during the study period (Journal of Health and
Social Behavior, 2005).
More recently, graduate student Katharine Burmaster, at
the University of California, Berkeley, and colleagues showed
that interventions to raise wages could have a direct effect on
mental health. They took advantage of a natural experiment in
the Dominican Republic, where workers in one factory began
receiving a “living wage” that raised their income above the
poverty line, while workers in another continued to earn the
standard wage. A little more than a year after the wage increase,
researchers found 23 percent of workers in the living-wage
factory had depressive symptoms, compared with 40 percent in
the standard factory — a reduction in risk of 47 percent (BMJ
The link between poverty and diminished emotional
and physical well-being seems clear. But does that mean
psychologists should be more active in efforts to reform policies
aimed at fighting poverty and increasing the minimum wage?
“Given the power of socioeconomic status and income
to affect mental health and overall health — absolutely,” says
Nancy Adler, PhD, who directs the Center for Health and
Community at the University of California San Francisco
School of Medicine.
It wouldn’t be the first time that the field of psychology has
thrown its weight behind important social issues. As Smith
noted in her article, psychology played an important role in
advancing policies that promoted racial justice and prohibited
discrimination based on sexual orientation.
“At the time, those issues didn’t seem to everyone like
such obvious banners for psychology to wave,” she says. “I’m
hoping to point out to psychologists that we have something to
contribute to the national dialogue on minimum wage reform
While APA does not have an official policy statement on
minimum wage policy reform, it does take seriously the issue of
poverty, says Gabriel Twose, PhD, senior legislative and federal
affairs officer. In 2000, the association adopted a resolution
on poverty and socioeconomic status that advocates for more
research on a range of issues related to the causes and impacts
of poverty. The resolution also commits APA to support public
policies that improve the lives of people in poverty, including
encouraging access to education and training that would allow
individuals to qualify for jobs that pay a sufficient wage to
support their households.
In 2012, the association submitted a letter to the U.S.
Senate in support of the Raise the Wage Act (S. 1150), which
would gradually raise the federal minimum wage to $12 per
Some four years later, that legislation has gone nowhere.
But change is beginning to happen, city by city, across the
nation. More than half of states, as well as Washington, D.C.,
have enacted minimum wages higher than the federal hourly
wage of $7.25. In 2015 alone, 14 jurisdictions approved $15
minimum wage laws. Those laws are predicted to benefit
more than a million workers, including home health-care
workers in Massachusetts, fast-food workers in New York
state and city workers in Pittsburgh.
Smith is optimistic about the outcomes in places that have
already boosted wages. One argument against raising wages
is that paying workers more would upset local economies.
Yet a recent meta-analysis by economist John Schmitt, PhD,
at the Center for Economic Policy and Research, found that
modest increases in the minimum wage have little to no effect
on employment. Any job losses, he reports, tend to be offset
by factors including improved productivity, reduced training
costs and reduced employee turnover (Center for Economic
Policy and Research, 2013).
“The early results are suggesting that not only has minimum
wage reform not hurt the economy in those cities, it may
actually be helping,” says Smith.