A 2017 report by the Board of Governors of the Federal Reserve System found that "four in 10 adults in 2017 would either borrow, sell something or not be able pay if faced with a $400 emergency expense."
While minimum wages might rise incrementally and unemployment numbers drop, it's impossible to forget that many people are one stroke of bad luck away from being out of a job, a home or a car.
This marginalizes the low-wage workers who make up a significant part of the U.S. workforce, but employers can build systems that empower this demographic.
Employer-based empowerment efforts have three keys to success:
● Understanding the barriers that prevent low-wage workers from advancing to high-paying careers;
● Understanding the inherent challenges in communities where the lowest wage workers live;
● Having a willingness to cultivate low-wage talent internally, thereby elevating career potential and providing a path to both long-term employment and higher-wage work.
Let's examine how organizations can take steps to build the workforce of tomorrow by lowering unemployment in the most marginalized demographics.
Understanding Barriers for Low-Wage Workers
“It's important for employers to understand that the worker is not a monolith," says Caryn York, executive director for Job Opportunities Task Force (JOTF). (Her organization works to eliminate obstacles to stable employment through investments in adult education and skills training, effective policy reform advocacy and cutting-edge research.)
“Each segment of the workforce comes with their specific differences and challenges, like race, ethnicity, gender, zip code and age," York continues. "Those differences, alone or coupled with others, may relegate a worker to low-wage status."
Low-wage workers have two definitions. First, they are defined as those who earn less than two-thirds of the median hourly wage for an area. The second definition is a worker whose salary would not put them above the poverty line for a family of four if employed full-time.
This demographic faces many barriers to employment that can keep them trapped in low-wage work. York outlines three of the most prominent below.
While one might think that removing the box on a job application inquiring about a worker's criminal record would be enough to open doors to historically low-wage workers, it's not that simple.
If we find someone who we believe is a valuable asset yet may be hindered due to certain circumstances, we will give them the opportunity to prove themselves.
—Nate Masterson, CEO, Maple Holistitcs
"Banning 'the box' is just scratching the surface," says York. "The question about a person's criminal record never goes away. You are simply moving the point in time when you ask."
Even if they remove the box, many employers still run criminal background checks before an employment offer is made. This means any criminal record, even those devoid of convictions, could prevent a person from securing employment.
Lack of Support Networks
Even when low-wage workers earn an opportunity to work, they may still face challenges that more privileged workers might not. When times get tough, think of the list of people you could call to lend a hand. For marginalized communities, that list may be shorter.
“We're privileged to know people who know people who know people," says York. “Jobs can be lost and opportunities missed out on because these communities don't have access to someone who can help them out if they're in a jam."
Lack of access to support networks can mean missing days of work because of unreliable childcare or the lack of someone to (literally) bail you out when facing a minor infraction.
There's no argument that it's tough to think about a worker who might be facing a legal infraction, but such an infraction has different implications for a worker with a support network ("I'm in a bind. Can you bail me out?" Worker is out and back at work with no one the wiser.) and without a support network ("I don't have anyone in my world with the money to get me out of jail so I'm going to miss work and probably lose my job.").
For low-wage workers, transportation issues are the most pronounced and can create obstacles that those with easy access to transportation might not face. Workers are often penalized for living in transportation deserts without access to a secondary car should primary transportation fail.
"For many workers in impoverished communities, the jobs aren't there and workers must travel outside of their communities to find a job," says York. "Moreover, credit, income, education and zip code can dictate how much you pay for car insurance. If you can barely afford a car but can't afford the insurance, those workers have no chance of moving up without an increase in wage."
Understanding these employment barriers and how they intertwine is just the first step. The next is acknowledging the risk employers face by not actively participating in long-term solutions for this demographic.
The Risks for Employers
Employers might think that there are unacceptable risks in cultivating talent from populations that experience marginalization like those outlined above. York encourages employers to think of risks from another angle: opportunities lost.
"The real risk for employers who choose not to address barriers to employment and actively participate in cultivating talent is the inability to consistently access good workers," says York. “Any business expects a certain level of risk when they hire someone. The real question is whether your business can risk the lack of access to a motivated pool of workers who crave employment opportunities and growth potential?"
As you look to expand your talent base and bring marginalized workers into your company, think about your team ecosystem.
When you understand and then build policies to counter the barriers to employment for the low-wage worker, you're developing a talent pool ripe for internal advancement. These employees can then be trained and nurtured at a company level for positions offering higher wages and long-term career potential. This can help reduce turnover.
It can also offer socioeconomic advancement opportunity and send dollars back into marginalized communities, which advances the quality of life for people beyond your payroll. On the flip side, fewer employment opportunities for low-wage workers means fewer workers contributing to the tax base, which ties to long-term sustainability in an employer's city and state.
So how can your company take steps to break down these barriers and cultivate talent from this ready-to-work demographic eager for a career and not just another job?
Cultivating Talent: Employers Taking Action
ZeroCater understands that the workers they need most are workers who love their company and are excited to come to work every day. Theresa Morgan, the company's talent acquisition specialist, shares how ZeroCater is doubling down on its efforts to empower and elevate the low-wage worker.
“So, you have increased your hiring numbers for underrepresented communities, but the real question is are you retaining them?" asks Morgan. “This is where most companies fail. At ZeroCater, we launched our Diversity & Inclusion Taskforce with a mission to cultivate a culture that reflects not only our diverse employee base but also our diverse customer and vendor base."
At ZeroCater, cultivating talent stretches deep into their corporate culture through cross-departmental training and an annual professional education stipend for every employee.
“We had a vendor associate interested in engineering. She used her stipend to complete a coding boot camp and later joined our engineering team," Morgan says.
To further break down barriers, ZeroCater offers benefits like a pre-tax flexible spending account that can cover commuting expenses. Their offices also provide free snacks and meals daily.
"While some of our employees see this as a perk, we acknowledge that others find this to be a significant cost savings, even taking leftovers home for dinner," says Morgan.
And that daunting criminal record box? ZeroCater only performs background checks on applicants who will be driving company vehicles, which is less than 10 percent of their team.
At Maple Holistics, a small e-commerce company based in Farmingdale, New Jersey, CEO Nate Masterson chooses policies that put people and potential first.
“We don't require candidates to divulge their gender, religion, race, ethnicity or age on their application," says Masterson." However, we do require candidates to describe what makes them distinct and how that translates into creating a team better equipped to make it in the e-commerce world."
Additionally, they consider each applicant on a case-by-case basis with no hard and fast rules about what could prevent someone from becoming a powerful contributor to their team.
“If we find someone who we believe is a valuable asset yet may be hindered due to certain circumstances, we will give them the opportunity to prove themselves," he adds.
Maple Holistics also understands that every employee has a home life—and with that life comes limits.
“We provide transportation subsidies and often encourage employees to work remotely. In fact, we have a few dozen employees associated with our company, many of whom work from home," he says.
Distance hasn't proven an obstacle yet. It seems they've even made it a non-issue.
When employers invest in strategies to end the cycle of employment barriers for low-wage workers, they're transforming the workforce of tomorrow one person at a time. The question that remains is how deep is your company willing to work and build strategies for cultivating talent that could improve lives for generations to come?
While it might be uncomfortable to think about employees who have pasts and presents unfamiliar to our own, it's likely the mindset shift employers need to build the inclusive cultures many-a-company purports to have.
Read more articles on hiring & HR.
Photo: Getty Images