One can’t seem to pick up a paper, turn on a podcast, or listen to the news without hearing about the need for businesses to create and support more quality jobs. But what are the elements of a quality job? The American people tell JUST Capital what the key components of a quality job are – a living wage, access to adequate benefits, and stakeholder-driven corporate practices. Last year, JUST Capital launched its Quality Jobs Initiative to better understand how companies think about these issues and identify strategies for companies to implement policies that support good jobs.
While there are a range of benefits and practices that companies should adopt, from providing paid leave to all new parents to conducting pay equity analyses, one innovative benefit is emergency savings programs, which is based on a striking number: 40% of Americans can’t cover a $400 unexpected expense.
Workers’ ability to set aside even a small amount of money can help them weather financial emergencies and prevent additional costs from high-interest credit cards, payday loans, cash advances, or missed work. Even $250 to $749 of liquid savings, for example, have been shown to make a family less likely to be evicted or miss a utility payment. In cases of unexpected expenses, a savings cushion can also reduce the need to take out loans and hardship withdrawals from retirement accounts like 401(k)s, and can give employees more stability to contribute steadily to other savings vehicles like health savings accounts (HSAs).
Businesses that are committed to practicing stakeholder capitalism should take steps to improve the financial security of their employees for their workers’ sake. But it is in employers’ economic interest to address this issue as well: financially secure employees are less likely to miss work, more productive when they’re at work, and more committed to their organizations’ goals. According to MetLife, employers have lost $250 billion each year due to employee stress affecting their work, with personal finances ranking as the top source of employee stress.
Employer support for building emergency savings is crucial to building financial security among employees. The Emergency Savings Initiative launched by BlackRock aims to garner greater business support for this issue and expand employer-provided savings programs by providing direct assistance to companies as they develop and implement new savings programs.
As part of the Initiative, JUST Capital partner – nonprofit Commonwealth – builds solutions to make people more financially secure, and advises companies on best practices for structuring effective emergency savings vehicles. Commonwealth recommends that employers evaluating emergency savings solutions as a benefit should insist on certain features to maximize the impact of their investment. Specifically, the most effective savings vehicles are highly liquid, have low or no fees, and have no minimum balance requirements.
We are pleased, though not surprised, to see some 2020 JUST 100 companies participating in the Initiative. Etsy, the Industry Leader in Retail and #53 in the 2020 JUST 100, has joined the Initiative to research the financial challenges faced by its sellers to help them create savings using a goals-based financial app that will launch early this year. Similarly, UPS, the Industry Leader for Transportation and member of the JUST 100, has committed to creating financial solutions for its employees by conducting research to understand their financial needs. Honorable mention goes to Mastercard, ranked #88 out of 923 companies for Workers, for its commitment to testing a variety of savings strategies with its customers and other stakeholders.
JUST Capital is committed to identifying and elevating best practices that support quality jobs. It’s clear that having the ability to set aside money for a rainy day is an important part of a good job. We applaud the efforts of BlackRock and Commonwealth to not simply highlight the dire need to strengthen families’ finances but bring effective solutions to the market.
To learn more about joining the growing list of companies committed to increasing employee financial security, contact Commonwealth at email@example.com.