Dave Altig: Welcome to another Atlanta Fed Public Affairs Forum podcast. I'm Dave Altig, director of research at the Federal Reserve Bank of Atlanta. I'm here today with Meghan Cummings, the executive director of the Women's Fund of the Greater Cincinnati FoundationOff-site link. Thanks for being here, Meghan.

Meghan Cummings: Thanks for having me.

Dave Altig, research director at the Atlanta Fed interviewing Megan Cummings, executive director of the Women's Fund of the Greater Cincinnati Foundation, during the recording of a podcast episode.

Photo: David Fine

Altig: So why don't you tell us, what exactly is the Women's Fund of Greater Cincinnati Foundation?

Cummings: Sure. The Women's Fund is a nonprofit, and we work on systems level issues surrounding women's economic self-sufficiency. There are so many things that determine a woman's ability to be self-sufficient, but we specifically look at childcare—accessible, affordable, quality childcare—living wage issues, training and education, and employment. So we look at that at systems level, we do a lot of research, how do we activate that research, and ultimately how do we affect policy change based on our findings.

Altig: You do a lot of work on, in particular, the issues that are confronting women who have low incomes or earn low wages, and you came today to talk to our Public Affairs Forum about a product you've put together called the Employer Toolkit. Why don't you tell us what that is?

Cummings: Sure. The Employer Toolkit is a relatively new resource that we put together. We were involved in a project called Raise the Floor about two, two and a half years ago, and Raise the Floor was created to get more women into advanced manufacturing careers. There were a lot of vacancies in kind of a campus of manufacturers in Northern Kentucky, and we thought there was a great opportunity to get more women into these jobs. And what would they need to be successful in these jobs? They would need great certifications, and they would need wraparound services like childcare and transportation needs to really make sure they were fully supported. So we thought we had it all figured out. We got women into these jobs, got them hired into the manufacturing companies, and quickly realized they were not staying. We had a lot of conversations with the HR directors and were wondering what went wrong here, and we were asking, "Are they trained appropriately?" "Yes, they're some of our best-trained workers." So what's going on? And what we found is, oftentimes in that first 90 days they would have a 90-day probationary period where, although they were accruing PTO [paid time off] in that first 90 days, it was really frowned upon to take any. So we would have a lot of single moms who had missed a few days of work because of sick kids, right? And this policy was really working against them and the goals of the company.

So we thought, maybe there are other policies that have some kind of unintended negative consequence, especially on low-wage workers. And how can we work with companies to identify those policies and solve for them?—which makes it more productive for the companies. They can retain workers better, and it helps us just create a more stable workforce. So that's really the genesis of this project.

Altig: An interesting part of this project is that you talked to both employers and employees to understand what the issues were on both sides of that employment equation. Let's start with the employers. What were the pain points of the employers?

Cummings: Overwhelmingly, the employers all had the same pain points: attraction, retention, and engagement. They can't get workers in, especially in this very low unemployment situation we find ourselves in. They can't retain them, there's a lot of churn especially in the low wage workforce, and if they're there, they're really not engaged. They didn't know how to make the situation better. They knew there was a problem, but that wasn't really their specialty to dive deep on poverty and some of the complex issues that we see with these workers and their families, and they just wanted solutions that made it simple.

From the employee's point of view, many of them were juggling multiple part-time jobs to make ends meet. Many of them were qualifying for public benefits. They had very precarious transportation and childcare arrangements, which meant it was very difficult to show up to work consistently each day. We just saw a lack of choices for them, and especially with the female employees we saw that they had a disproportionate amount of childcare and elder care that they were responsible for in their families. So after doing dozens and dozens of interviews of both the employees and the employers, we wondered how the Women's Fund might create a bridge between the needs of the different groups, and that's how the Toolkit was born.

Altig: So I gather that one of the things you found right away was that employers were generally not aware of the issues being confronted by employees.

Cummings: Absolutely, it was a big shock. As we started talking with employers, they couldn't believe that some of their full-time workers were qualifying for public benefits. That was just new information to a lot of our employers. So we did a lot of education around: What's the federal poverty level? What does that mean? How is that different from self-sufficiency? Those two are really removed oftentimes from Cincinnati, where I'm from. Here in Atlanta, you need to be approaching about 250 percent of the federal poverty level, if you're a single parent with two children, to make ends meet without public assistance. So that was one of the first things we needed to do is really educate the business community, and get an idea of what the lives were like for their lower-level employees.

Altig: So I guess that one of your messages is that it's this inability of employers to understand the conditions that employees are dealing with that leads to some perversities in HR policies, for example, and business approaches that may be causing trouble for both parties.

Cummings: You're absolutely right. And I don't think there's any malintent in this. I don't think policies were created to specifically leave out certain people. That's not what we're suggesting at all. I think what we see is, there is a big push in companies to really explore DEI—diversity, equity, and inclusion—and oftentimes when we talk about our diversity efforts at companies, we are talking about gender diversity, racial diversity at our companies, and inclusion—religious, ethnic, etc. But oftentimes we're not having the conversation about socioeconomic diversity within companies and socioeconomic inclusion. So what we find with these policies is many of them were created to meet the needs of middle- and upper-class workers, and that's probably who they were created for. So there can be work done to really understand what benefits would most meet the needs of lower wage employees.

Altig: So why don't you give us some examples of the types of policies that you found were creating issues?

Cummings: Sure. In our Toolkit, we outline about 40 different policies and practices, but we had some key top line learnings overall: one is that any policy or practice you have at your company that requires some kind of reimbursement tends to be problematic for folks on the lower end of the socioeconomic spectrum. They just don't have the money to put forward early and then be reimbursed. Many times we think about tuition reimbursement with this, which is certainly a case. We often find our workers are going back to get an MBA or some advanced degree, when really for entry-level workers an associate's degree or a certification could make leagues of difference for them and their family. So how might we structure those policies to invest in the worker early on?

Another thing with reimbursements…the Cincinnati Zoo is a big user of our Toolkit, and they realized they had a reimbursement policy for their bus passes. They have a lot of employees that use the bus every month, and they were offering a reimbursement for that $70 bus pass at the end of each month. Even though so many of their employees use the bus, they looked at what the usage was of this benefit, and there were only three employees taking advantage of it. And so the HR director, who is just very forward thinking, talked to the employees—talked to one specifically, he knows she rides the bus every month—and he said, "We have this great policy here—why aren't you taking advantage of it?" And she said, "I have $1.75 in the morning. I have $1.75 in the afternoon, the next morning, and the next afternoon. But never in my monthly budget do I have $70 all at once." So he went and negotiated a bulk rate for bus passes with our Metro system, came back to this employee and handed her a bus pass at the beginning of the month, and she cried. She said, "You have no idea what this means for me and my family. It allows me to get to work reliably every day, but it also allows me to get to doctor's appointments and to the library, and take my kids to the park and do other appointments I need to do throughout the month."

Now, that employee is not going to leave there for a 25-cent-an-hour raise, which often happens—there's a lot of churn with lower-wage workers and their jobs. She is engaged with the zoo now because they really took the time to understand her needs and invest in her. And they were going to do this anyway—they just front-loaded it instead of making it a reimbursement. The other thing this does for the zoo is it gives them a huge competitive advantage when they're posting for positions, when we're all fighting for employees right now. So they can, in a posting, say that this position comes with a Zone 1 bus pass, and that just does wonders for their recruitment efforts. So that's one small thing, just a change in policy that really makes a big difference for lower-wage workers. So reimbursement's a big area that companies can adapt to.

A few others really quick. How do we invest in the immediate needs of our employees? Many companies require you to wear a clean uniform to work. In nursing homes, you need to wear clean scrubs every day. Many people from middle- or upper-class living arrangements have a washer and dryer right in their homes, and we wouldn't think twice about washing a uniform. But for many of our entry-level folks, that means going to a laundromat. That is the time and transportation and cost of doing that each week. We were talking to one nursing home that requires scrubs for their patient aides, and they just had this moment when they realized they have laundry facilities on site for the residents. How might they use those for the patient aides, to make a huge difference? So it's really understanding those most immediate needs of your employees.

And finally, a big theme we saw was regressive perks. It seems as we get higher up in our careers, we get more things for free—which is really counterintuitive, because then we have more money to actually buy the things we need. One of the examples that's in the Toolkit is of someone that worked downtown, and we were talking about how expensive parking was, and he goes, "I don't have to pay for parking anymore because I'm a manager." And it just hit us: you're to the point where you can actually pay for parking, and then it's given to you. What would that mean if we were able to invest in those kinds of expenses for our lower-wage workforce? They're literally working 10 or 11 hours out of their month to pay for that parking. So how might we look at regressive perks, and really invest in our employees at the lower end when times are really tight for them and they're really living paycheck to paycheck? So those are some of the top-level things we saw from the Toolkit.

Altig: So you have some ideas that are somewhat prescriptive about how a business that might think that it has these problems, but isn't quite sure—what strategies might they employ to deal with the underlying problems that their low-wage employees might be facing?

Cummings: Yes. So I would give a few suggestions. One: get to know your workforce. Get to know your people. Understand what they're struggling with, what their priorities are—don't project your priorities onto them. Really understand where their challenges are and what challenges would be most useful for them for you to remove some barriers from. Is that transportation, or childcare, or food access—what is that? So really get to know your employees.

The second thing I'd recommend is companies get a handle on what their cost of turnover is within their organization. I think companies are really surprised about this, but when they put all those costs and lost productivity and how much money it takes to hire and do background screenings and drug tests—those numbers add up really quickly, so get a good idea of what that turnover is costing you right now and think how we might redeploy that money in a more useful way. The other thing companies can do is really look at their benefit usage by salary band, and that might raise some ideas of where you can start. If you have a 401k plan at your company, but you realize only 3 percent of your lowest-band employees are taking advantage of that—that's a great place to start, to say, "How can we make something more equitable here, where everyone has access to these benefits?"

And finally, download the Toolkit. It's a free resource and it provides really concrete, actionable items for companies. I think sometimes as employers we're told we just need to fix it but we're not given the very specific things to do, and this brings some concrete examples to areas we know are problematic, like scheduling and transportation and childcare.

Altig: You gave us one example, with the Cincinnati Zoo, of an employer that you've been engaged with that has found good results from adopting relatively minor changes, actually. Got other examples?

Cummings: Of course. You know, our hospitals have really done a great job embracing concepts from the Toolkit. One hospital in Cincinnati, who is a very large employer. They just did very meaningful, authentic focus groups with their lowest-wage employees and said, "What are your biggest challenges?" And actually, what came out of that was a very big discussion about food insecurity. They had several employees who had to be terminated in the past year because they were stealing food from the kitchen they actually worked in, and this was just an "aha" moment for this hospital to understand that full-time employees at their location were food insecure.

And so they took that learning and said, "How can we incentivize attendance and other things we want to see in the workforce, and be sending home meals with these employees? We're producing the food anyway. It would be thrown away." So they were able to really tap into some of those needs, and I think if there were just a lot of C-suite people—C-suite executives in a board room—they never would have zoned in on food insecurity being a number one concern there. So really talk to your employees. I think that's important. So this hospital has created a whole program to meet the needs of their lowest-wage employees, and it was just rolled out a few weeks ago, but we have every thought that this will be a great success for them because it was done in such an authentic way, and it was really driven by employee voice.

Altig: You've mentioned a couple of times the importance of talking to your employees and understanding what their needs are. But to inject what might be, unfortunately, a little bit of realism into some circumstances: sometimes employees don't really want to talk to their employers. We talked a little about this before. In those cases, is it useful to have an intermediary?

Cummings: Yes. Actually, one of the suggestions that came up in the discussions we had was talking about having a workforce coach, which is a third party that comes into the place of business that can really help employees solve for specific needs. It's kind of nice that it's not connected to HR because sometimes our HR folks, they don't want to know the whole complicated story. They really want to manage risk and be fair. That's really important in the HR function. So this third party can understand those needs and then communicate those themes up to management. We're seeing a lot of employees that are having trouble with this or that, and they can help. There are some pilot programs where we brought workforce coaches into companies, and even after the pilot they wanted to keep these workforce coaches because they were having such a positive benefit on the workforce.

Altig: Let me shift gears just a little bit. One of the things that we're very interested in here at the Atlanta Fed is this issue of benefit cliffs, and you've done a lot of work and thinking about the benefit cliff issue. Describe what that means.

Cummings: Yes, sure. We've done a lot of research on the cliff effect since 2012, and for those listeners that might not be familiar with that: when a person qualifies for public benefits—food assistance, housing vouchers, or childcare vouchers and others—sometimes a small increase in wages can trigger a complete cutoff of a public benefit. In some cases, maybe a 90-cent-an-hour raise, which would be about $2,000 a year—that might put them over a childcare voucher cliff, so that $2,000 raise maybe just cost them $14,000. And this is a real phenomenon that's happening that's affecting employees, but it's also affecting employers. They want to promote people and are very confused when people don't want to take that promotion because they will be facing a benefit cliff. So we've done a lot of research about this, and one of the things we can do about the cliff effect is figure out better legislation for it. How can we taper these cliffs? How can we make the limits higher? I think both of our organizations are figuring out how to do that at the state and national levels. The Toolkit is really meant to be an additive solution to provide some wraparound benefits as people are experiencing this volatility with their wages and possible benefit cutoffs. So it's a complementary idea to the cliff effect work that we're doing. I think it's a both/and.

Altig: So I think your general message is that almost everybody—public policymakers, nonprofits, and employers—has a role in solving these problems that are really confronting in a serious way, and impeding mobility for our low-wage colleagues.

Cummings: Absolutely. I think sometimes when we have these discussions about very complex community issues like poverty or economic mobility, we group them like, "This is a social problem, and the nonprofits need to solve this." And here we are over in the business community, on the other side of the spectrum, and we're just like, "Get this solved for us." And really, it's everyone working in concert. We need to have great policy that supports the goals we want, which is an economic growth and mobility conversation. We also want to have employers that are seeing engaged, productive workforce, and we want to see families that are thriving in our communities, meeting their basic needs—and that has ripple effects into health and so many different areas that are beneficial to our communities. So it's all three working in concert.

Altig: So I gather there is an Employer Toolkit 2.0 on the way?

Cummings: There is. So we launched this last year, and we have learned so much in the past year as companies start to use it, innovate on it. They bring new suggestions back to us of things that should be included. They tell us what's working really well for their particular sector, so we're learning so much from the companies. So we've decided to wrap all these learnings into a new version of the Toolkit, which will come out in January of 2020. It will also be available at the same place, which is toolkit.cincinnatiwomensfund.orgOff-site link. It's a free resource, and the new Toolkit has about 60 policies and practices like the ones we described during this conversation today.

It also has two additional sections: one on some tips for how we can best engage with second-chance citizens that we're hiring, who might have a criminal record—what are some best practices for that population? And also really taking a hard look at gender-based violence and how that affects our workforce. We did some preliminary research that suggests there is an uptick in gender-based violence and intimate partner violence when a woman gets a raise or moves into a new sector that will give her more money.

And that's something we really needed to understand, if our mission is to get more women to be economically self-sufficient but there is a violence factor that might play into that, those steps up, that's something we really need to look at so we wanted employers to be aware of that, too, so that's all wrapped into the Toolkit. And there is a resource on there where you can calculate your company's turnover. Again, that is just powerful information: "Before we make any change, let's really see how much this is costing us."

Altig: Can you give us the website again?

Cummings: Yes, sure—it's toolkit.cincinnatiwomensfund.orgOff-site link.

Altig: Great. Meghan, thanks so much for joining us today.

Cummings: Yes, thanks for having me.

Altig: Thank you all for joining us. We look forward to you joining us again on another Public Affairs Forum podcast.