As the U.S. economy continues to recover from the 2008 financial crisis, the median household income has risen 1.8 percent since last year; unemployment, at 3.7 percent, has hit its lowest rate since 2000; and the poverty rate has decreased for the third consecutive year to 12.3 percent.
Though the poverty rate continues to decrease, there are still 40 to 45 million people living below the poverty line who are not reaping the benefits of this period of economic growth. And the severity of poverty is worsening: The percentage of families living on half the poverty threshold (currently $24,858 for a family of four) has increased to 5.7 percent in 2017 from 3.5 percent in 1975. Poverty also disproportionately affects racial minorities. The rates for blacks at 21.2 percent and Hispanics at 18.3 percent are more than double the rate for non-Hispanic whites.
Speaking on the economic recovery, Timothy Smeeding, a professor at the University of Wisconsin-Madison who studies poverty and economic mobility, told The New York Times, “The party has lasted a long time … but not everybody is getting invited—people who are working several jobs, taking jobs without benefits, kids who are growing up in poverty. The fruits of the recovery are not being spread around evenly.”
We need to rethink our training methods to better support underserved communities.
People living in poverty certainly don’t lack the intelligence or desire to obtain good jobs. They merely lack access to training programs and a support system within corporations that meet their unique needs. With robust workforce development programs, companies can invest in this population by providing training for high-demand roles and job placement to further build and develop their new skills. Eventually, these jobs can lead to long-term careers, enabling the individuals and their families to become financially stable and, more importantly, help in disrupting the cycle of poverty.
To create systemic change, we can’t work in just one piece of the supply chain or, in this case, merely hire people from underserved communities or who are living in poverty. These individuals typically lack a strong support system, which is critical for success. Companies can either assume this responsibility in house or partner with third-party organizations to create the support and training necessary.
By investing in underserved communities, companies are more than just doing good; they are setting themselves up for greater success. With tailored workforce development programs, companies will have employees who are specifically trained for their needs. In addition, a more diverse workforce is proven to yield greater returns. Companies in the top quartile for ethnic and cultural diversity on their executive teams were 33 percent more likely to have above-average financial performance than companies in the fourth quartile. Additionally, different backgrounds and perspectives contribute to cognitive diversity, which leads to improved problem-solving and enhanced innovation.
To be sure, training these untapped talent pools isn’t always easy, especially since traditional methods don’t provide the support beyond the workplace that is critical to the success of underserved populations. But using external workforce development programs provide the tools to bridge the divide. There are non-profits that go further than merely training and placing talent in careers. Corporations that partner with Workforce Opportunity Services (WOS), for example, experience a 90-percent retention rate with employees hired by WOS.
Why? The organization addresses some of the socioeconomic barriers that prevented these individuals from being given opportunities in the first place. These obstacles can include anything hiring babysitters so that trainees can attend night classes and coordinating ridesharing services in areas where public transit is sparse to stepping in financially to ensure the person has a roof over his or her head or can attend formal education. When organizations handle every aspect of the life cycle for employees from underserved communities, the change is systemic.
Companies have the power to assist in breaking cyclical poverty in the U.S. But the only way to achieve this goal is by exploring the opportunities that workforce development programs can deliver.