Workforce.com

Low-Wage Workers More Engaged When Given Better Benefits, Opportunities

November 7, 2006
Low-wage employees are more likely to be engaged and productive when they have access to the same types of benefits and opportunities available to high-wage workers, according to newly released research from the Families and Work Institute.

Creating a base of entry-level and hourly employees that is more productive and effective could boil down to one critical concept: access. According to newly released reports from the Families and Work Institute, low-wage employees are more likely to be engaged and productive when they have access to the kinds of benefits and professional opportunities that their high-wage counterparts enjoy.

The research defines low-wage employees as individuals earning about $9.70 per hour, with total annual income below 200 percent of the federal poverty threshold, or $39,612 for a family of four in 2005. The findings were drawn from the National Study of the Changing Workforce, which was conducted by the Families and Work Institute in 2002 and 2003.

The study sampled 3,504 workers in the U.S. At the time when the survey was taken, 12 million to 13 million employees were considered low-wage earners.

Creating a more egalitarian workplace would entail a multi-pronged approach by employers, says Ellen Galinsky, president and co-founder of the Families and Work Institute in New York City. Companies would have to pay close attention to narrowing the wide disparities in access to training, health insurance, paid vacation and other fringe benefits that elude many low-wage workers but are abundant among high-wage workers.

The imbalances are quite pronounced, Galinsky says. For instance, only 42 percent of low-wage workers receive personal insurance from their companies. By contrast, 94 percent of employees in high-earning brackets are offered personal insurance. Paid time off for personal illnesses extends to only 39 percent of low-wage workers, while 90 percent of employees in the high-earning segment have this benefit.

Even initiatives like training and development, which are directly correlated with productivity and employee effectiveness, are scarce among low-wage workers. The research reveals that 81 percent of high-wage earners have access to training or educational programs. Only 45 percent of low-wage workers had access to training or educational benefits.

Bridging the differences in benefits might take effort and dedication, but it wouldn’t necessarily break the bank for employers. According to Galinsky, many of the initiatives that can foster balance in the workplace require little investment and could produce a big payoff for companies.

Low-wage workers who receive more job autonomy and flexibility, for example, are less susceptible to negative spillover from home to work, which could reduce stress on the job and bolster productivity.

--Gina Ruiz