Policies on minimum wage, income tax have a direct effect on who goes hungry: researcher

·3 min read
Raising the minimum wage and lowering income tax rates for the least privileged has a direct effect on health outcomes and health-care spending, a new study finds. (Ousama Farag/CBC - image credit)
Raising the minimum wage and lowering income tax rates for the least privileged has a direct effect on health outcomes and health-care spending, a new study finds. (Ousama Farag/CBC - image credit)
Raising the minimum wage and lowering income tax rates for the least privileged has a direct effect on health outcomes and health-care spending, a new study finds.
Raising the minimum wage and lowering income tax rates for the least privileged has a direct effect on health outcomes and health-care spending, a new study finds.(Ousama Farag/CBC)

As Newfoundland and Labrador's 2021 budget drop approaches, new research is pointing to policy decisions that could kickstart ground-up healing for the province's wounded economy and give its least privileged a better shot at leading healthier lives.

According to University of Toronto researcher Valerie Tarasuk, it all begins in the kitchen.

"Adults in a food-insecure household will burn up more than twice the health-care dollars over the course of a year than somebody who's food secure," Tarasuk, a leading scholar on the topic, said Friday, citing research showing that households without steady access to enough nutrients have higher morbidity rates.

That statistic hangs over about one in seven households across Newfoundland and Labrador. According to the most recent Statistics Canada data, nearly 15 per cent of households across the province cannot afford reliable access to food.

Oddly, that's not because people are spending too much on power bills or that grocery prices are too high, according to Tarasuk.

Instead, the study found, it's policy decisions — like the ones Premier Andrew Furey's government will reveal on Monday — that directly affect food security levels to the greatest extent.

In particular, a government's position on minimum wage, social assistance payments, and low-income tax percentages had the most extreme impact on how much, and how well, underprivileged residents can afford to eat.

For every dollar increase in minimum wage, Tarasuk explains, a household has a five per cent decrease in its chances of experiencing food insecurity. Similarly, increasing social assistance payments by $1,000 a year would have the same effect.

Valerie Tarasuk is a professor of nutritional sciences at the University of Toronto.
Valerie Tarasuk is a professor of nutritional sciences at the University of Toronto. (Nicole Ireland/CBC)

"It's very much about money in the purse," Tarasuk said. Higher wages directly influence household budgets for the long-term, giving households more options to keep their pantries stocked.

The income tax rate for the lowest bracket matters, too, she says.

"It made a huge difference. A one per cent increase in that lowest bracket could lead to a two per cent increase … in the probability of food insecurity."

Newfoundland and Labrador has already added to the pool of evidence for poverty reduction policies and their effects on access to food. In the mid-2000s, the Progressive Conservative government of the day introduced an anti-poverty strategy that dropped the low income tax rate.

That directly caused the food insecurity rate to plummet to a record low, said Tarasuk, who said Newfoundland and Labrador for a while was "a poster child" for policies that tackled food insecurity head on.

That strategy, however, ended, and so did N.L.'s standing among the provinces.

However, if Monday's budget zeroes in on a similar approach, her research suggests those policies could influence savings down the line.

"Somebody who's food insecure is not healthy," Tarasuk said starkly.

"Where provincial policy frameworks fail to protect the needs of very low income people, they also play out in terms of those health-care dollars."

Read more from CBC Newfoundland and Labrador

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