A Job Is More Than Income: The Role of Employment Capital in Producing Long-Term Financial Stability
Low wages are not the only barrier to economic security and prosperity for many. Work without other forms of “employment capital” blunts opportunity and limits prosperity for individuals and their families. In this paper, we use this term to conceptualize the set of employer-provided benefits including matched retirement savings, subsidized health insurance, short term disability, paid sick and vacation time, job flexibility, tuition reimbursement, employer provided training, and job stability. As we review, these job features help low- and middle-wage American workers and their families build wealth and financial stability for the long-term. We investigate what happens when workers’ jobs lack characteristics that build and preserve wealth, explore why inequities exist in access to those job characteristics, and propose policy solutions to improve work-based pathways to wealth building and economic security.
Methods:
The paper draws on data from a unique longitudinal interview study of 137 families drawn from across the U.S. The interviews examined the ways that low and middle income families built wealth between 1998 and 2010, and the kinds of opportunities that wealth provided for them. Questions asked included information about income and employment history, wealth and debt histories, as well as information about family context including partners and children. Families were interviewed in-person at baseline in 1998 and then again in 2010 with similar questions asked both times in a semi-structured format. Data was analyzed using qualitative software and a combination of emergent and axial codes. We supplement these analyses with data from the Panel Study of Income Dynamics and Bureau of Labor Statistics.
Results:
The interviews demonstrated that more than two-thirds of workers had seen their wealth increase. Employment characteristics, or capital as we term them, emerged as an important mechanism through which many upwardly mobile families built wealth, in some cases despite other adverse events such as divorce. Employment capital such as fringe benefits and job security and flexibility facilitated a pathway to accumulating wealth that income alone could not provide. The interview data thus suggest the link between employment and building wealth and prosperity goes far beyond the paycheck.
Families that lacked employment capital drew on other resources, that when unavailable stymied their wealth-building capacity. National data point to the unequal distribution of employment capital by occupation. Service sector workers, for example, are less likely to have access to employment capital opportunities than professional and managerial workers. Since these occupations are also racially segregated it becomes clear that wealth-building job opportunities are distributed unequally among racial, class, and occupational divides.
Conclusions/Implications:
The lived experiences of families shared through these interviews allow us to add a critical new understanding of the connection between work, wealth, and prosperity, with implications for social work practice across the micro to macro spectrum. The findings suggest important public policy reforms that could be put in place to increase employment capital and its generation, in turn, of financial security. The data also point towards specific workplace policies that could help families to increase their economic footing.