Organic Consumers Association

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How the 40 Year Drop in the Minimum Wage Helped Cause Obesity

I have written about the link between wages and obesity before-with wages dropping since the 60s and healthy food prices always going up, people eat more unhealthy food. But now two economists have drilled down into these issues and claim to have found a specific link between a drop in the minimum wage and obesity:

Growing consumption of increasingly less expensive food, and especially "fast food", has been cited as a potential cause of increasing rate of obesity in the United States over the past several decades. Because the real minimum wage in the United States has declined by as much as half over 1968-2007 and because minimum wage labor is a major contributor to the cost of food away from home we hypothesized that changes in the minimum wage would be associated with changes in bodyweight over this period. To examine this, we use data from the Behavioral Risk Factor Surveillance System from 1984-2006 to test whether variation in the real minimum wage was associated with changes in body mass index (BMI). We also examine whether this association varied by gender, education, and income, and used quantile regression to test whether the association varied over the BMI distribution. We also estimate the fraction of the increase in BMI since 1970 attributable to minimum wage declines. We find that a $1 decrease in the real minimum wage was associated with a 0.06 increase in BMI. This relationship was significant across gender and income groups and largest among the highest percentiles of the BMI distribution. Real minimum wage decreases can explain 10 percent of the change in BMI since 1970.

Fast food companies have a long history of fighting things like unionization drives and minimum wage increases-indeed, they are often leading the charge. It's clearly been good for their bottom lines and now this study shows how it's been bad for our waistlines. The study authors focused on food eaten outside the home since labor costs are a significant component of total costs for fast food (unlike for processed foods) and such food has been a significant source of additional calories in our diets.

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