December 16, 2017; The Town Talk

Louisiana’s workplaces are turning to the Louisiana Jump$tart Coalition to provide much-needed financial literacy education to employees struggling with debt. At Baker Manufacturing in Pineville, Louisiana, Chief Operating Officer Sandra McQuain turned to Jump$tart when she noticed how many of the company’s employees were affected by wage garnishments.

“When you’re under financial pressure, it just doesn’t leave,” McQuain told local reporter Miranda Klein. “Not only does that impact my colleagues’ personal life, that impacts their productivity here, their focus. It’s hard for them to be 100 percent.”

McQuain points out that wage garnishment and difficulties managing money affect employees at all income levels, which is undoubtedly true. But the increased interest in financial wellness programs among employers also parallels trends in the US economy that increasingly put workers at financial risk. These include four decades of stagnant wages, increased income volatility, and a shift away from company benefits that provided protections against illness or disability as well as secure retirements.

In a blog post for the Aspen Institute program “Reconnecting Work and Wealth,” Lata Reddy, senior vice president for diversity, inclusion, and impact at Prudential Financial, explains:

Twenty-first century innovation and structural shifts are transforming work far faster than our current safety nets and policies can keep pace. These changes have transferred economic risk from broad structures onto the fragile balance sheets of American households causing financial instability for many. This instability erodes the foundation for success and the ability for people to reach their goals and achieve their dreams.

These risks are particularly difficult to manage if you are among the one in four Americans working in a low-wage occupation. A recent report from Louisiana’s United Way shows that 42 percent of the state’s residents “don’t make enough money to afford basic expenses like housing, childcare, food, transportation, and taxes.”

In recognition of the challenges facing so many low-income families, Louisiana Jump$tart expanded its mission from educating students to providing workplace financial education. Its programs cover savings, credit and debt management, home ownership, and planning for retirement.

Neighborhood Trust Financial Partners, a New York-based nonprofit that has been dedicated to financial empowerment of low-income people for two decades, recently announced a national partnership with Staples to provide employer-based financial counseling. According to Neighborhood Trust, its Employer Solution has collectively saved employees nearly $1 million and reduced credit card debt by almost $300,000. Neighborhood Trust has helped thousands of employees in low-wage sectors such as health care, long-term care, and retail improve their credit scores and become more financially stable.

According to Prudential, seven out of ten HR professionals say that personal financial challenges impact employee performance. Employers can help to reduce financial stress through education, support, and money management tools but it is important also to look at job quality. America’s workers—half of whom earn less than $17.50 per hour—need more than financial advice; they need better wages and benefits, training, and career opportunities to grow their incomes, manage expenses, and save for the future.—Karen Kahn