BMJ  2005;331:857-858 (15 October), doi:10.1136/bmj.331.7521.857

Editorial

Keeping healthy on a minimum wage

Is not easy in the United Kingdom

The national minimum wage was a flagship policy of the United Kingdom's Labour party during the 1997 election campaign—a century after Fabians Sidney and Beatrice Webb first advanced the idea.¹ From April 1999 the policy set a main minimum wage of £3.60 per hour for those aged 22 and older and a lower rate of £3.00 for those aged 18-21. Reviewed annually, the main rate now stands at £5.05 and the youth rate at £4.25 per hour. People aged 25 or over and working at least 30 hours a week can also receive working tax credits after means testing. Has the policy reduced poverty and, in turn, improved public health?

The minimum wage and working tax credits are important policies in the government's anti-poverty strategy. Yet the latest estimate shows that wages in 250 000 jobs held by people aged 18 or over in the United Kingdom are still below the minimum rates.² Furthermore, although these "welfare to work" policies stemmed from beliefs in social justice and in "making work pay," the overall effect of the minimum rates on income inequality appears small.^{3 4}

The national minimum wage and working tax credits have raised the earnings of the lowest paid workers. However, progress towards a minimum income for healthy living has been slow and patchy. The health community did not participate in decisions on setting minimum incomes and calculations to set the rates did not consider requirements for personal health.^{5 6}

Arguing that policies on social welfare should take account of the minimum income needed to maintain health, Morris et al have identified several basic needs for health and wellbeing and have calculated a minimum income for healthy living.⁷ They based their calculations on the needs of a healthy single man aged 18-30 who has left the family home,⁷ although a single healthy woman may have been a more appropriate choice because two out of three beneficiaries of the minimum wage in 1999 were women.⁸

To calculate the minimum income for healthy living, Morris et al derived minimum prices for nutritional requirements from consensus guidelines on diet. They budgeted for physical activity, choosing the least expensive dynamic aerobic exercise but including expenditure spread over a year for items such as training shoes or a bicycle, helmet, and cycling kit. The psychosocial budget covered a variety of expenditures for social participation: on telephone bills, postage, the occasional gift, and subscriptions for clubs and trade unions. For essential items such as clothing and the costs of renting a home the researchers used data from the Office for National Statistics' family expenditure survey on average weekly expenditure by the 30% of the population on the lowest incomes. The minimum income for healthy living was £132.00, but the take home pay of the average young single man working 37.5 hours a week on the minimum wage was £120.00. Hence there was a shortfall of £12.00 each week between what such a man earned and what he needed to stay healthy (April 1999 prices).

The researchers point out that their budget has some gaps and excludes any allowance for personal choice and development, contingencies, or emergencies. Thus, their budget is an underestimate of the real minimal costs for healthy living. Inevitably too, there are inefficiencies in purchasing. For example William Beveridge, the British economist and social reformer whose recommendations paved the way for the NHS, allowed 6% for inefficiencies when he was setting social security budgets in 1942.⁹ Allowing for these margins and bringing the calculations up to date by correcting for inflation, a single healthy man aged 18-21 working a 37.5 hour week (the national median) on the lower rate of national minimum wage currently has £20.00 less a week, on average, than he needs to live healthily. Those aged 22-24 on the main rate may just about manage. A single man aged 25-30, if he gets working tax credits, should receive an income sufficient to maintain health—on average £11.00 above the basic amount.

Of course the government also has to consider economic implications when setting the national minimum wage. Given that the government has recently committed to helping people to achieve healthier lifestyles,¹⁰ can politicians afford to ignore the evidence for a minimum income standard that would offer all those in low paid work a better opportunity for choosing health?^{11 12}

School for Policy Studies, University of Bristol, Bristol, BS8 1TZ (christopher.deeming{at}bristol.ac.uk)

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Competing interests: None declared.

References

1. Webb S, Webb B. Industrial democracy. London: Longmans, 1897.
2. Milton, J. Low pay estimates for 2004. Labour Market Trends 2004;112: 481-3.
3. Sutherland H, Sefton T, Piachaud D. Poverty in Britain: the impact of government policy since 1997. York: Joseph Rowntree Foundation, 2003.
4. Dickens R, Manning A. Has the national minimum wage reduced UK wage inequality? J R Stat Soc: Series A 2004;167: 613-26.[CrossRef]
5. Morris JN. Are we promoting health? Lancet 2002;359: 1622.[CrossRef][ISI][Medline]
6. Morris JN. Commentary: Minimum incomes for healthy living: then, now—and tomorrow? Int J Epidemiol 2003;32: 498-9.[Free Full Text]
7. Morris JN, Donkin AJM, Wonderling D, Wilkinson P, Dowler E. A minimum income for healthy living. J Epidemiol Community Health 2000;54: 885-9.[Abstract/Free Full Text]
8. Heasman D. Patterns of low pay. Labour market trends 2003;111: 171-179.
9. Beveridge W. Social insurance and allied services. London: HMSO, 1942. (Cmd 6404.)
10. Department of Health. Choosing health: Making healthy choices easier. London: Stationery Office, 2004. (CM 6374.)
11. Morris JN, Deeming C. Minimum incomes for healthy living (MIHL): next thrust in UK social policy? Policy Politics 2004;32: 441-54.[CrossRef]
12. Zacchaeus 2000 Trust. Memorandum to the prime minister on minimum income standards. London: Zacchaeus 2000 Trust, 2004.

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