Urban Wire Family financial security takes more than a steady paycheck
Caleb Quakenbush, Signe-Mary McKernan
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Work in America is changing. The traditional 9-to-5 day at a single employer isn’t a reality for many workers. Although data are limited on nontraditional workers, available data do show that more employers are using contractors, franchises, and technologies like just-in-time scheduling to meet their labor needs. This can offer workers flexibility or extra income on the side, but it can also create uncertainty about where their next paycheck will come from, how much it will be, and their benefits options. And some workers, even in high-skill occupations, might find their jobs replaced by changing technology.

These new flexible work arrangements have important benefits for both businesses and employees, but our public safety net is often designed around traditional full-time work at a single, primary employer, and growing of number of workers and their families are falling through the cracks.

On April 5, researchers, practitioners, and employers convened at an Urban Institute event to discuss the changing nature of the workforce and strategies for making sure employees find work that is a source of financial security, dignity, and upward mobility. Their main question: How can the future of work support the financial security of all workers?

A broader definition of financial security

Proposals to address the changing nature of work often focus on income, with policymakers exploring whether we should raise the minimum wage or give everyone a universal basic income. But work is about more than wages, and financial security takes more than a steady paycheck.

Financial security involves the ability to manage daily finances, be resilient to economic shocks, and pursue opportunities to advance economically. It also involves the ability to build and protect wealth. But wealth inequality is growing, and debt is burdening many workers. Urban Institute research has found the following trends:

  • Young people and families of color who represent the future of the US workforce are facing increased wealth inequality.
  • Alternative work arrangements are weakening the connection between high-quality jobs and retirement accounts and health insurance.
  • Eighteen percent of Americans have medical debt in collections, and 25 percent of millennials and Gen Xers have past-due medical debt. A lack of health insurance coverage is likely a key driver of medical debt, and young adults have lower rates of health insurance than older adults.

How lawmakers, employers, and nonprofits can help workers become more financially secure

Businesses, policymakers, and nonprofits can take steps to ensure employees reach stable financial ground:

Help families build up emergency savings. Our research has found that families with as little as $250 to $749 in savings are less likely to be evicted, miss a housing or utility payment, or receive public benefits after a job loss, health issue, or large income drop. Before workers can be good homeowners and retirement savers, they need a cushion for emergencies. Employers, nonprofits, and the government can offer incentivized and automated savings, such as an automatic transfer into a savings account, either through direct deposit into a bank account or a savings wallet on a low-fee payroll card. As an alternative to expensive payday loans and auto title loans, employers, nonprofits, or government can offer low-cost emergency credit.

Make work-related benefits universal and portable. Policymakers could change regulations to allow benefits to travel with workers when they move between jobs. Policies could also allow platform companies like Uber and Lyft to offer benefits like health insurance to contractors and provide incentives for more employers to offer paid sick leave and time off for caregiving.

Another option is to separate benefits from employers, allowing workers to obtain benefits from structured marketplaces or public plans where employers need to allow payroll deductions. States such as New York and Oregon are moving forward with automated retirement savings plans for private-sector workers without access to employer plans. This ensures workers can save for retirement and relieves small businesses of the costs of setting up and managing 401(k)-type plans. Some employers, meanwhile, will still offer additional retirement benefits to attract talent.

Reform the safety net and related protections. In some cases, the government can relieve employers of the burden of providing benefits by expanding public benefits like health insurance. This would allow employers to focus more on core business needs and allow workers to move between jobs or take entrepreneurial risks without losing important protections. Expanding the earned income tax credit for workers without qualifying children and widening the age range for eligibility would also help families be more financially stable. For families with children, access to high-quality affordable child care during nontraditional hours can help workers with long or irregular schedules.

Create avenues for workers to upskill and advance their careers throughout all stages of life. Technology and work will continue to change, and workers will need to continually renew their skill sets. Apprenticeships allow workers to earn while they learn and avoid starting their career in debt. Career pathways through on-the-job training can also ensure workers are prepared for changes in their work roles. And higher education finance that makes sense can ensure workers aren’t saddled with debt midcareer.


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The Urban Institute podcast, Evidence in Action, inspires changemakers to lead with evidence and act with equity. Cohosted by Urban President Sarah Rosen Wartell and Executive Vice President Kimberlyn Leary, every episode features in-depth discussions with experts and leaders on topics ranging from how to advance equity, to designing innovative solutions that achieve community impact, to what it means to practice evidence-based leadership.


Research Areas Wealth and financial well-being Workforce
Tags Workforce development Economic well-being Workers in low-wage jobs Wealth inequality Work supports
Policy Centers Center on Labor, Human Services, and Population