Blog Post: Earnings Growth and Job Mobility Among Low-Wage Earners

In The Brookings Institution’s article, “Encouraging Job Advancement Among Low-Wage Workers: A New Approach”, the author demonstrates that earnings growth for low-wage workers is much more likely to come from switching to a different company than it is from staying with an employer and waiting for a wage bump or promotion. If this is the case – and Miami-Dade’s dearth of mid-level jobs suggests that it would be particularly acute here – we would expect savvy low-wage workers to be putting in time at one job while eyeing where they could go next.   

For a low-wage worker, even a modest increase in wages can make a significant difference in lifestyle and future prospects. Making $9.00 an hour instead of $8.00 is an effective raise of 12.5% and an additional $2,000 annually – enough to have a car that could get you to a $10.00 an hour job, or to enroll in classes for a marketable skill or certification. 

So what’s inhibiting this upward mobility? Several things – all of which WorkSquare is working to change. First, little information exists as to available jobs, how to apply for them, what characteristics the employer requires, et cetera. When employers do post job positions publicly, they are often overwhelmed at the quantity of candidates (qualified and not) that they then have to sort through. I have seen more than a few hiring managers grab the top several applications and dump the rest in the recycling bin for lack of time. Accordingly, the search for a low-wage position becomes more about luck (or a personal referral) than it is about merit.

Secondly, the job search process in the low-wage sector remains costly and time-consuming when it involves juggling a current job, unreliable transportation, and family and other commitments. Scheduling time off for the interview and hiring process may well jeopardize a current position or be financially burdensome in terms of time spent, wages lost, childcare arranged, and transportation.

Third, we’re lacking reliable and standardized metrics for employee performance that would allow employers to target high-performers. Proxies such as job longevity exist, but all the same, it remains a challenge to ascertain whether a low-wage employee excelled or merely got by in prior positions. High turnover in low-wage retail and service settings means that references from supervisors or co-workers are frequently unavailable. Add to this the fact that online job boards – CareerBuilder, Monster, Craigslist, etc. – don’t provide effective ways to screen for available low-wage employees.

Finally, employees’ success in jumping jobs is inhibited by their own inability to market themselves well. Even when they have the experience or characteristics an employer is looking for, they may be screened out of the process due to an imperfect resume or professional appearance, or – most critically – their ability to give a convincing ‘elevator pitch’ to explain why they’re the best candidate for the job. Lack of interview experience can also be an impediment, as the interview setting can be sufficiently intimidating to make job-seekers uncomfortable and unable to put their best foot forward.

In sum, better information on available jobs and candidates is critical to helping both sides make more informed and successful decisions. Reducing turnover through intelligent hiring, along with successful retention strategies once employees are in place, has potential to save South Florida employers significant time and money. This, combined with an effective platform for low-wage workers to promote their employability and enhance their interview performance, would be nothing short of revolutionary. And we’re on it!