Social Determinants: Income

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June 30, 2020

Addressing social determinants of health - the circumstances in which people are born and live - is a business and moral imperative.

Income is associated with health outcomes, including life expectancy. Compared to adults with higher incomes, those with lower incomes have higher rates of chronic disease, such as heart disease, diabetes and stroke, greater physical limitations and lower longevity.1,2  They are also more likely to report nervousness, as well as sadness “all or most of the time.”1 

Worse health outcomes are not just limited to adults. Studies show that rates of low birthweight are highest among babies of low-income mothers, and lower-income children have higher rates of health problems like asthma, heart conditions, and elevated blood lead levels.

According to research, “the relationship between income and health is a gradient: they are connected stepwise at every level of the economic ladder. Middle-class Americans are healthier than those living in or near poverty, but they are less healthy than the upper class.”1 This concept extends across the globe;  one study, for example, found that in China, a person’s health-related quality of life worsened as their income decreased.

Income impacts health in numerous ways, although isolating its effect can be difficult because income is interconnected to other social factors.2 (Nevertheless, studies indicate that income has an independent effect on disease and premature death even after controlling for other socioeconomic variables like education.)2

One of the ways income influences health is that people with lower incomes experience greater barriers to accessing health care.2 Specifically, they are more likely to be uninsured or underinsured, as well as have a harder time affording deductibles, copayments and other health care expenses. People with lower incomes may be negatively affected by the characteristics of the communities where they live (e.g., lower-income neighborhoods have a higher density of tobacco retailers and fast-food restaurants).2 Additionally, people with low incomes may be exposed to chronic stressors, including violence and discrimination, which can negatively impact their health over the longterm.2 And financial adversity in and of itself has been found to have harmful effects on the body.2,4 

Ideas for Action

Perhaps the most significant step employers can take to mediate the negative effects of low income is to pay employees a livable wage. Additional ways employers can assist employees include:

  • Providing health and well-being benefits that help employees pay for basic needs.

8% Despite having a job, eight percent of the world's workers live in extreme poverty.9

  • Designing incentives (or surcharges) in a way that does not unintentionally disadvantage low-income employees. For example, low-income people continue to smoke at disproportionately high rates compared to those at a higher income level.5 They may also not have the opportunity to participate in incentive-related activities outside of work hours.
  • Reducing income volatility by promoting more predictable scheduling for shift workers.
  • Offering financial well-being benefits or programs that specifically address the challenges of low-income employees (e.g., accessing earned wages before payday).
  • Committing to pay equity by being transparent about compensation structures, ensuring equitable wages are set when individuals are hired, and conducting pay equity audits to identify issues and correct pay disparities as necessary. 

As you design benefits to support low-income employees, take care to design them in a way that does not unintentionally disqualify them from receiving public assistance or government subsidies. After all, 69% of all public assistance benefits received by nonelderly families or individuals go to those who work; among those, nearly half (46.9%) work full- time.6 Also, since what's considered low income varies by region (e.g., richer regions tend to have higher low-income thresholds than poorer regions), it's important to take geographic and country differences into account when designing benefits intended to help low-income employees. For example, the definition of low income for a family of four living in the Bay Area of the United States is $117,400 or $82,200 for a one person household but in India, low-wage rural workers make an average daily rate of approximately $1.71, while urban workers make almost double that amount.7,8

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