In the next few years, minimum wage hikes will offer 13 million people a once in a lifetime opportunity to build their financial security. At Commonwealth, we’re looking at how we can partner with workers, employers, financial institutions, community organizations, and government to make this a reality.
Our first step was to talk with workers. In the last 6 months, we surveyed two small samples of low wage workers — those who are going to get a raise and those who already got a raise. 67% of the first group reported that they plan to save at least part of their increase, with emergency savings as their primary saving goal.
The second group of workers reported that they took action. 62% said that they did save some of their raise. These preliminary results are encouraging– workers see the opportunity to begin building financial security with these raises. Our next step is to build cross-sector (public, private, and social) partnerships to offer simple and easy ways for them to turn intentions into actions.
We have started talking with employers about the impact of workers’ financial insecurity on the workplace and how they can address this very real obstacle to a productive and stable workforce. A recent study by PwC found that nearly one in three employees report that personal finance issues have been a distraction at work, and 46% of those reporting distractions say that they spend three or more hours a week at work thinking about their financial issues.
There are not enough good quality, unrestricted savings products offered by financial institutions through employers. We have started talking to financial institutions about this market need. Government and community organizations each have a role to play in prompting action by expressing public support and enacting policies that build thriving communities.
On July 1, 2017, 14 cities or counties across the United States will increase their minimum wage by up to $2/hr. This provides us with the chance to transform all this talk into a real-world pilot. We are looking for employers to think creatively with us about how to pilot a solution for their workers when these wage hikes go into effect. Start a conversation with us today.
The security and peace of mind that comes with having emergency savings is invaluable. Commonwealth is committed to working across sectors to design, pilot and scale a solution that will support 13 million workers in taking advantage of the minimum wage hike opportunity to begin building financial security.
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