Home > Medical School, Medical/Health Commentary > A med student minimum wage? I sure hope not!

A med student minimum wage? I sure hope not!

Josh Herigon, MPH, thinks that I should be unemployed while at medical school, and would have me go through four years of medical school with only minimal research opportunities.

This isn’t because Mr. Herigon has anything against me personally — I don’t think I’ve ever met him or otherwise offended him — but rather because he thinks that medical students are “vulnerable,” in need of protection from “exploitation,” and otherwise in need of “institutional protections” in the form of a minimum wage for work on medical research programs.

And here I thought most MPH programs taught basic economics!

Seeing as how some seem to be heavier on paternalism than Pareto, let’s review the (simplified) basics:

  • A firm will hire a worker only when the value of what that worker will produce exceeds the costs of employing that worker (wage + benefits + payroll taxes + liability risk, etc).  The benefits of hiring have to exceed the cost.
  • Therefore, a worker with lower expected productivity will, all else equal, command a lower wage for her labour than her more productive colleague.
  • Forcing an employer to pay only wages above a certain minimum level forces the employer to hire only those workers who meet the corresponding minimum standard of productivity.  Remember, this is business, not charity that we’re talking about here.
  • Thus, the workers whose levels of productivity don’t justify receiving the minimum wage prescribed… well, they’re simply out of luck.

This is the sort of basic microeconomics that I’ve discussed in the abstract with friends and in the academic setting numerous times, though I will admit that the passions are more inflamed when it gets personal, as it does in this post.

If medical schools, whether individually or collectively, were to impose a minimum wage for med student research, I have no doubt which end of the stick I’d be getting.  My undergraduate background is in economics; my undergraduate experience in lab work or other medical research is minimal.  My productivity at assisting with medical research is much lower than my productivity at explaining what a minimum wage for medical student research would do to me.  If labs and research groups were forced to pay students from a necessarily limited pot of money, I have no doubt as to which students they’d most often choose to employ.

Here’s a hint:  it ain’t the ones with the social science degrees.

The question of the minimum wage more broadly is one about which there is spirited debate, as well a good deal of misconception (for a short summary of the issues involved, see here).  However, as Mr. Herigon concedes in his post, medical students already benefit greatly from undertaking term-time and summer research projects, and in fact their participation is often a net hindrance and not a net help to the labs they work with.  This is not a situation that leads me to think that the problem is one of wages that are “too low.”

So, medical schools of North America (SUMS in particular), this is one area where I urge that you don’t discriminate against the less productive!  Unless, that is, you think that student medical research should be an opportunity limited to those who have done it before.

***

A mere 18 months ago, I never could have seen myself doing this, but here’s 3.5 minutes of quality Milton Friedman on the subject:


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  1. Carlson
    August 15, 2010 at 23:03

    Without taking sides on the particulars of the argument, since without meaningful data its very easy to say “oh this or that will be the effect on demand for medical students labor” and sound very convincing (as an aside, this principle is true for almost everything, and yet there is no shortage of people that ignore it, particularly among the political class), here are a few arguments in favor of the minimum wage, and a few things that you should consider in this particular case:

    1. Minimum wages improve the standard of living for lower-income people. Even if we grant that fewer people will be employed (which is highly suspect, see point 3), if we assumed that the minimum wage was a living wage (yeah i know, huge assumption, and probably false today), there are a number of good reasons why its better to have a smaller absolute number people making less than living wages that I hopefully don’t have to elaborate (I will give one example anyways: an absolute number of more people have living wages => less crime).
    2. People paid higher wages, to a certain point, perform more effectively(theory of efficiency wages), for a number of reasons. By getting rid of the market holding wages down in a non-minimum wage situation, it is possible that efficiency gain from paying people more will weigh against or even outweigh the potential harms of a minimum wage.
    3. Minimum wages may increase the sum of producer and consumer surplus. The typical liberal premise of wages is that the higher the wage, the more people are willing to work (ie, greater labor supply), leading to a mismatch between supply and demand, and thus unemployment. Besides being obviously false on the high end (if I was being paid a billion dollars a day, I’d work a week then buy the Seychelles), it is also probably false on the low end. People, especially in societies that value the individual, value their dignity, and for better or for worse, ascribe the payment for their labor as an indicator of the dignity that their labor provides them. As a result, people will simply not work if the market wage is too low, resulting in a lower output of whatever good those people were producing than is beneficial for society at the “true” wage rate (one way to envision this is that there is a sort of “dignity” wage that acts as a multiplier to the pure cash wage, starts below the wage curve and looks sort of like an s-curve). There are a number of psychological studies that bear out the idea that this is a large part of the human condition (I think Fehr and Gachter (2000), which shows that people are willing to suffer substantially to punish people they believe are behaving unfairly), may be one of the better examples). More anecdotally, this may explain why companies are having difficulty filling positions despite absurdly high unemployment and underemployment. In other words, the market wage without a minimum is lower than the what the market for the “effective” wage, resulting in a market inefficiency. And don’t tell me that they’ll just raise the wage to the dignity level in response, because there are ways around that, like forcing existing workers with steeper dignity curves to work longer, etc, short-term obligations investors outweighing the longer-term advantages of employing more people, etc, all of which result in suboptimal outcomes.
    4. Just in general, so long as we live in a society that agrees in principle with a degree of redistribution (and we do; go to Somalia if you want a society where government doesn’t redistribute anything), the minimum wage may be more effective than other redistribution mechanisms. For example there are certain classes of people (such as those with certain disabilities) that it is easier to redistribute to through providing artificially higher wages than through other means
    5. Minimum wages may be necessary to prevent monopsonies or cartels from abusing workers, especially in situations where labor mobility is poor or people have skills that aren’t easily transferable but are nevertheless necessary to a well-functioning society (this also explains some of the virtue of prevailing wage laws).

    And for your specific case:

    1. Externalities. There are a lot of these. One of these is that med students might be more willing to do research than they would be if they were merely indentured laborers, increasing their efficiency. If one wants to go off the deep end, one could say the non-payment of wages to medical students (if in fact the amount of labor provided by medical students to researchers is substantial) may discourage talented but poorer students from entering medicine.

    2. You assume that healthcare should be treated like any other good. This assumption is unjustified. We obviously create different classes of goods in society, some that we allow to be determined by markets, such a video games, and others that we don’t, such as fundamental rights (i.e., we generally don’t allow people to sell themselves into slavery, though maybe you would be comfortable with such a thing, I don’t know). As such, there are some decent arguments why healthcare != a video game, such as the complicity of society in creating the environment of its citizens, including its health environment and the obligations incumbent on that society as a result; the idea that rationing healthcare by price is effectively a positive infringement on the right to life for certain classes of people than if it were rationed by some other metric, etc. As such, there is no reason to believe a liberal market analysis should be the reference point, as opposed to, say, how do we achieve a minimum level of healthcare for everyone, which may involve paying medical students more (this is both a garnish and a frame for the externalities point)

    3. You assume that the market wage for the service of medical students in a basic research capacity is less than the minimum wage. There is no reason to assume this. The work performed by medical student research probably requires a fair amount of intelligence, precision and diligence, none of which are easy to come by, In fact, a more likely reason med students don’t get paid for the work you describe is that non-payment is simply a long-standing tradition that medical establishments have no reason get rid of because it provides them with labor at below market rates and medical students are too risk-averse or busy to protest. Don’t sell yourself short, Notwithstanding!

    • August 17, 2010 at 15:40

      As to the general case, I think that points 3 and 5 are strongest. I can’t see how a minimum wage could be a more efficient means of redistribution than something like a fully-refundable negative income tax (paid quarterly to avoid liquidity-constraint issues). There are means of taxation that are far less distortionary than the minimum wage. The data on minimum-wage earners indicate that they are few in number, and overwhelmingly below the age of 25, most often from middle/upper income families. That said, the general case is a bit outside my area of expertise (not that anything really falls in said area…).

      The specific case of medical student research, however, is where I feel comfortable making these sorts of convincing-sounding puff statements ( :-) ). I’m not convinced that your first point holds much water. No one thinks that the current medical graduate debt situation in the US is an ideal one, but I don’t think that many, if any, students rely on research earnings as a major source of income. I could be wrong, I concede now, but the sense I get is that most non-foreign students are funded via a combination of grants and debt intended to cover tuition + some estimate of the cost of living. Similarly, I’m not sure how paying (or not) medical students for research assistance impacts the provision of health care (at least in any direct or proximate sense), so I’m not sure how your second point there would apply.

      Finally, while I appreciate your suggestion of confidence in my abilities, I can assure you that my labour market competitors are every bit as intelligent and diligent as the stereotypical medical student nerd (though, alas, many of them are also gifted with those social graces that I lack). There may well be some students there who are able to produce enough in the research setting to justify a wage… coming from the social sciences, I don’t think that I would be one of those people in a lab setting.

  1. January 26, 2011 at 23:59

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