Disclaimer: Posts are solely the views of the author and do not represent the views of Brandeis University or The Institute on Assets and Social Policy.
This time of unprecedented crisis is shaking our collective understanding of work in ways that may open up new policy opportunities. How do we address historic unemployment when we need as many people to stay home as possible? Why are the people putting themselves most at risk to care for and sustain us often paid the least? What workplace protections do workers deserve as we ease into a new “normal”? COVID-19 is throwing old problems of how we value and compensate work in a harsher light.
In this moment, it’s time to revisit the idea of employment capital. Employment capital is a valuable framework for understanding one way that inequity accrues: not just in unequal paychecks, but also in unequal access to the job qualities and benefits that build and protect wealth. But if we’re not careful, the term may limit our policy imagination as we forge forward.
“Employment capital” refers to the work-based resources and job characteristics beyond income that enable families to build and preserve wealth. The concept includes job benefits, job flexibility, and consistent work. For example, employment capital may allow workers to pool risk by joining a subsidized health care plan, weather personal or family shocks with sick leave and job flexibility, or access transformative asset-building opportunities with retirement or educational benefits.
On the one hand, there are many ways that employment capital could be protective in a global pandemic.
Past IASP research has documented how employment capital is distributed unequally among racial, class, and occupational divides. Historical legacy and ongoing discrimination concentrate Black and Latino working people disproportionately in jobs and industries that lack employment capital. Disparities persist even among peers in a field: for example, Black and Latino workers in the restaurant, construction, and healthcare industries are significantly less likely than their white coworkers to have health insurance coverage or retirement benefits.
The health and economic crises caused – or illuminated – by COVID-19 make this concept more relevant than ever. On the one hand, there are many ways that employment capital could be protective in a global pandemic. Workers who have paid sick days or paid family and medical leave may be able to take more time off – and be paid at their full wages – than what is guaranteed under the CARES act, which lets many workers fall through the cracks. Workers with more job flexibility have an easier time taking care of kids from home or running to the grocery store at off-peak hours. Workers with subsidized high-quality health insurance may enter the crisis in better health and exit it without catastrophic hospital bills.
As employers laid off workers on an unprecedented scale in the early months of the pandemic, at least 26 million workers and their dependents lost their health insurance.
The pandemic is also laying bare the cost – to workers, their families, and the country – of inequitable distributions of employment capital. Many of the frontline workers who are shouldering the most risk going into work during a pandemic don’t have benefits or flexibility at work. Cashiers, personal care aides, nursing assistants, food service workers: many of our highest-risk jobs are the lowest-paid and the least likely to offer benefits. Workers across the country are demanding better pay, safe working conditions, sick leave, health insurance, and protections for contingent work.
Also clear in the context of a pandemic is the cost of tying so many asset-building strategies to employment. For example, as employers laid off workers on an unprecedented scale in the early months of the pandemic, at least 26 million workers and their dependents lost their health insurance. In the middle of a global health crisis, these workers are left to scramble for other, often expensive options or remain uninsured.
The idea of employment capital provides a valuable framework for naming and measuring work-related inequities beyond wage gaps. But if we’re not careful, the term may direct our policy response away from collective solutions. Take paid family and medical leave programs, which provide income replacement to workers when they need to address a serious health condition, care for a family member, or welcome a child to their family. There are clear disparities in access to paid family and medical leave: BLS data show that only 19% of workers have access to paid family leave, with much lower rates among part-time workers (8%) and workers making the lowest wages (9%). Access to paid medical leave tends to be higher – if only because some states mandate participation in temporary disability insurance programs – but shows the same disparities.
One solution lies in what eight states and the District of Columbia have already done.
Under an employment capital framework, the policy answers might be to either increase access to well-compensated (in both wages in benefits) fields, or mandate minimum standards of paid leave, similar to minimum wage or paid sick day. Both solutions fall short. While it is necessary to break down any barriers to equal opportunity, Not Only Unequal Paychecks documents how disparities can persist even among peers in the same field. Meanwhile, paid leave mandates risk incentivizing discrimination against job seekers employer suspect will require leave.
One solution lies in what eight states and the District of Columbia have already done. These programs all use a social insurance model, somewhat like Social Security, unemployment insurance, or worker’s compensation. The social insurance model pools risk, for both workers and employers: workers exchange small payroll contributions for income replacement during a family or medical event, and employers contribute indirectly but do not have do directly pay workers while they are on leave. These types of policies are largely “portable” – meaning that they are not tied to any one job a worker may have – and newer programs have experimented with progressive benefit structures and ways to include self-employed workers.
The COVID-19 crisis has laid bare the protective value of employment capital and the consequence of its current unequal distribution. It’s now plainer than ever that the work that sustains us – feeding, caring, cleaning, serving, delivering work – is largely performed by people who lack not only adequate pay but also the means to build and preserve wealth. There could not be a clearer call for policies that equalize and expand security and opportunity.