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Mark Greene: Despite low unemployment, Wisconsin workers on a precipice

Originally Published in The Cap Times on Sep. 1, 2017

By Mark Greene | SafetyNet director of innovation and product development

Recent talk of Wisconsin’s economic landscape tends to focus on our ability to attract business, the wisdom of incentives and associated implications on taxpayers or the number of jobs created. To be sure, finding effective ways to get more people back to work is important; however, missing from the conversation is the question of whether new jobs will provide real financial security for more Wisconsinites.

This is not an idle question. The link between work and financial security has weakened in recent decades. Low unemployment, though important, is not the Holy Grail for Wisconsin. While the state’s unemployment rate is at a six-year low, other indicators of financial instability for Wisconsin suggest problems.

In a recent survey we conducted, we found that 42 percent of Wisconsin workers have less than $1,000 in savings (better than the 69 percent of all Americans, but still troublesome). We also found that more than a quarter of Wisconsin respondents had experienced job loss from layoffs, disability or illness in the last five years or were worried about future layoffs. These concerns are also justified by a growing body of research.

Despite recent advances in Wisconsin’s tech landscape, we are still a manufacturing state. And conversations about the health of Wisconsin manufacturing are incomplete without considering the impact of automation and worker resilience in the face of industry shocks. Job creation does not necessarily mean job preservation or financial security.

Again, according to our survey, Wisconsinites are concerned about finding affordable housing and health insurance, the rising cost of necessities and consumer debt. These expense worries aren’t going anywhere. Further, insecurity and unstable work environments add costs and stressors that are difficult to capture on balance sheets.

When Wisconsin’s future workers fall on hard times, their available public benefits (like those available today) will be fragmented, slow and complicated. They will likely negatively impact the confidence of those who simply want to provide for their families. In our current system, less than a quarter of displaced workers complete the process to receive public unemployment benefits.

So, how do we respond?

First, we need to make financial wellness programs widely available. Employers should offer this training alongside information for health and retirement benefits. In addition, CEOs, human resources teams, and benefits managers must be honest about their gaps in effective coverage — this means not only highlighting those gaps on a benefits menu but also acknowledging how workplace and scheduling practices affect the financial lives of employees.

Next, we need to improve wages for ordinary workers. Line wages have grown just 15 percent since 1979, while executive pay has climbed by 138 percent. Those on tight budgets can easily have their financial lives derailed by seemingly mundane events — like unexpected expenses, fines or fees. Public subsidizing of low-wage employers is a waning trend. Private sector leadership is in demand as government is not moved to expand public assistance.

Finally, we need to acknowledge there is room for innovative products and services to fill gaps left by the private sector and government. Private companies are uniquely poised to use the latest technology, capital, regulatory influence and data to shape the future of workers’ financial security. Young companies like EvenSafetyNetEarnUp and Shift Savings (among many others) are proving the concept, filling critical gaps in working people’s financial landscape. But, there’s more to be done.

We must remember an economy is strongest when its most vulnerable members are empowered to protect themselves from financial pitfalls.

As business leaders, we must hold ourselves accountable to good corporate citizenship. Business is about people, product and profit. Balance is important – profit should not be prized at the expense of people or the product. We should not only expect, but demand it.

Mark Greene is director of innovation and product development at SafetyNet, a division of CUNA Mutual, and chairman of Madison’s Economic Development Committee.