How is Minimum Wage Affecting Health Insurance?

How is Minimum Wage Affecting Health Insurance?

How is minimum wage affecting health insurance? Minimum wage is the amount an employer has to pay their employees for any work provided.. The minimum wage varies as you move across the country or across the globe. The minimum wage in Texas is $7.25/hr and in California is $12/hr. Minimum wage affects an individual’s ability to maintain their health, life, or any other kind of insurance.

Minimum Wage Calculation

For example, you earn $7.25/hr. This makes your income $58 per day. That is around $1400 per month. On average for an individual, needs around $600 per week to live a healthy life. According to this analysis, an individual without any family should be able to make at least $2400 per month to be able to live a good, healthy life. An individual making minimum wage is $1000 short of the ideal monthly income.

min wage


Do you think health insurance is a priority when you are $1000 short on living a basic healthy life? Probably not. A person is barely making enough to ensure they and their family are getting enough meals and a decent place to stay. This makes health or life insurance an unnecessary expense for them. Health insurance is also a benefit provided by your employer. However, if you are a worker working on minimum wage, employers are reluctant to pay for health insurance. The general calculation of paying for an employee is to pay as much as they earn for you.

For example, if they help you earn $6 an hour, the employer is ideally planning to pay them $6 an hour. However, they cannot pay below the minimum wage, which is $7.25 in Texas, so they are $1.25 over the target. The employer tries to gain the extra by reducing the non-wage benefits such as health insurance or vacation days. Thus, as the minimum wage increases by the changes in government policies or other circumstances, it reduces the health insurance benefits for the employees in a similar amount.

Employment Benefits

This could be a forced impact on losing the benefits for the employees since more than half of the Americans receive their health care insurance from their employers.


Furthermore, there are various downsides to this. As they don’t have any health insurance, affording health care if extremely difficult. This leaves them with various casualties. Increasing the minimum wage decreases their health care benefits, moreover, it also increases inflation in the economy. Inflation causes an increase in expenses, which again leaves those with minimum wage vulnerable.

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