Know Your Workforce
Many entry-level employees have trouble keeping low-wage hourly jobs even when they are qualified for the work. Complexity in their lives can be compounded by trying to make ends meet, dealing with transportation and childcare issues and juggling multiple jobs. Many managers and business owners come from a middle or upper class background and may not be familiar with or understand the challenges faced by workers in poverty.
Companies that understand their employees and how best to support and develop them, foster a workforce that is more engaged and committed to the company and its success.
Factors Complicating Job Performance for Entry Level Workers:
- Financial Realities: The inflation-adjusted minimum wage has risen only 5% since 1990, although most costs of living, such as rent, have grown far faster. Minimum-wage jobs, and even many better paid jobs, are often not sufficient to meet the basic needs of a family. Therefore, many low-wage workers work more than one job and many qualify for public assistance. Although the public assistance helps workers financially, it also imposes additional stress and administrative requirements that can detract from work attendance and engagement.You may not realize that some of your full-time employees qualify for public benefits. Additionally, many part-time low wage workers piece together several jobs to make ends meet.Read our report: Outlining the Disincentives and Opportunity Costs for Working Mothers
Here's a snap shot:
Benefit eligibility is calculated based on the federal poverty level. The federal poverty level was created in the 1950's by the USDA. At the time, most families spent an average of one third of their income on food, so it was assumed that multiplying the food budget by three would result in an amount that would meet basic needs. The federal poverty level does not vary by geographic region, so the federal poverty level for a family of four is the same in Boston, Massachusetts as it is for Mobile, Alabama (which clearly have very different costs of living.) The federal poverty level also doesn't take into account the composition of a family. A three-person household could comprise two working adults and a teenager or a single parent with twin preschoolers. Obviously these families have very different needs.
The Self-Sufficiency Standard is a better measure for how much a family needs in annual income, as it accounts for family composition and geographic location, as well as family size. It is calculated county-by-county with a standard methodology.
In Cincinnati, the self-sufficiency standard for a single parent with one preschooler is $41,282 per year, or approximately $20 an hour. The federal poverty level for a household of two is $16,240 per year. Generally speaking, financial self-sufficiency occurs when you are earning 250% of the federal poverty guideline.
See the Self-Sufficiency Standard for your county.
- Inflexible Schedules: The typical workplace structure can be challenging for entry-level employees, especially since low-wage employment is often characterized by rigid and unpredictable schedules. From a financial standpoint, instability and inconsistency in number of hours of work, and therefore actual pay, create significant stress for individuals living paycheck to paycheck.
- Child and Elder Care: Childcare and elder care are expensive, and many low-income families rely on piecemeal networks of care provided by friends and relatives. Compared to higher paid employees, entry-level workers generally have less access to flexible start and quit times and limited advance notice of schedules. They are unable to make last minute schedule changes, or to telecommute and work compressed work weeks in order to meet family demands. They are also less likely to have paid time off. As a result, their fragile networks for childcare and elder care can easily fall apart when work schedules suddenly change, leading to absenteeism. This disproportionately affects female workers, who are not only overrepresented in low-wage work, but also take on more responsibility for child and elder care in their families.
- Transportation: Transportation can be complicated by the unpredictability of work schedules when public options are limited. Entry-level workers private transportation is often unreliable, and may be costly if free parking is not available. Public transportation can be notoriously inefficient for workers who have to make a transfer and there may not even be a bus stop close to your business. Scheduled stops can occur hours before or minutes after a shift starts which leads to an inefficient and frustrating experience each working day. Many employees are penalized for tardiness, when it may be the result of inflexible public transportation options.
Because of these factors, low-wage workers have many difficulties in balancing their work and family responsibilities. Policies that help mitigate these challenges can significantly reduce turnover and absenteeism and build employee loyalty and engagement.
The most effective way to start understanding the complex needs of your work force is to engage your frontline workers, not just management, in defining the problems, selecting and implementing changes and evaluating impact. Lived experience with these issues is the most powerful expertise. You simply can't design effective policies without the input of your frontline workers.
Read our white paper Unintended Consequences: Changing Workplace Policies to Support Low-Wage Employees to learn more.