April 9, 2018

Benefits on the Fringe: The Inequality of Benefits


Welcome to Benefits on the Fringe, the monthly Recruiter.com column where Jason McDowell covers the most unique benefits today’s employers are using to woo talent, as well as advances and innovations in the employee benefits realm.

This month’s column will be a bit different from the usual. Instead of exploring a weird, funny, or innovative perk, we’re going to explore the opposite. In many areas of the world, including the United States and Europe, certain in-demand employee benefits are difficult to access for low-pay workers.

Let Them Eat Cake

In recent sociological and economic contexts, the “precariat” is the name given to a new social class that formed leading up to and during the early 21st century as a product of recession and economic instability. These workers, who find themselves in a constant state of insecurity, are less likely to feel they have access to essential benefits or flexible working arrangements, according to “Dualization and the Access to Occupational Family-Friendly Working-Time Arrangements Across Europe,” a study by Dr. Heejung Chung, professor and researcher at the University of Kent School of Social Policy, Sociology, and Social Research.

“What I find is that although low-skilled workers and workers in low-wage sectors may be the ones who are in most need of family-friendly arrangements, due to the fact that they may not have other means to address these issues — for example, buy some help/support for work/life balance — they are the ones least likely to have access to these arrangements,” says Chung.

The study divides labor markets into two sectors — primary and secondary. Primary employees are those who enjoy “high wages, good working conditions, prospects for career advancement, and … job stability,” according to the study. Secondary workers, however, “have so-called ‘dead-end’ jobs, with low pay, bad working conditions, few career advancement prospects, and unstable jobs with frequent layoffs.”

When secondary workers are viewed as dispensable, it is easier for executives to overlook issues of fair pay or working conditions. This may seem like something that only goes on in emerging countries that lack labor regulations, but think again. For example, you may remember the report that came out in 2014 showing that Walmart workers — even though they are employed — collected more than $6 billion nationwide in public assistance. This is not just a problem for developing nations. It’s a problem that transcends borders.

“First, you need to think about why the primary workforce [members] are the ones usually benefiting from these arrangements — because employers feel that these are workers who are worth investing in or maintaining,” Chung says. “Employers may believe that by its very nature, workers in the secondary market are replaceable and do not need such maintenance. However, this may be a misconception. Maintaining a stable workforce — both primary and secondary — and its influence on work culture, workplace effectiveness, and efficiency may have been underestimated. This is especially true when we think about the effect frequent turnovers and insecurity of secondary workers have on primary workers as well.”

The Family Business

We need look no further than family leave policies to recognize the disparity between primary and secondary workers. Even if both groups have the same benefits package, unpaid parental leave may not be possible for secondary workers, who lack the resources to provide themselves with basic necessities without a paycheck for a few weeks or months.

“As shown again and again, women are the ones who are mainly responsible for care of children and family members,” Chung says. “Thus, the need for flexibility and family-friendly working time arrangements are especially pertinent to these groups of workers.”

This division between these two segments of the workforce can fuel resentment, particularly among lower-paid, less secure workers. Consequently, organizations that don’t take steps to create inclusive cultures will continue to face high turnover and low performance.

As New York’s fast food workers showed us last year, any worker who puts in a full work day at a job deserves fair pay and equal access to benefits. While demanding change from our government is one way to get things done, it is also up to the C-suite and HR professionals to implement a culture where all employees have access to essential benefits and fair pay, no matter what their role is within the company. It’s the right thing to do.

Read more in Benefits

Jason McDowell holds a BS in English from the University of Wisconsin-Superior and an MFA in Creative Writing from The New School. By day, he works as a mild-mannered freelance writer and business journalist. By night, he spends time with his wife and dogs, writes novels and short stories, and tries in vain to catch up on all of those superhero television shows.