Commonwealth announced it is bringing to Chicago a nationwide campaign to leverage minimum wage hikes to build worker financial security. Chicago’s multi-phase minimum wage ordinance increases the minimum wage by $1 on July 1.
“The millions of workers around the country affected by minimum wage hikes represent a huge opportunity to build security, and our past pilots around raises have indicated that workers want to seize on raises to strengthen their finances,” said Commonwealth Senior Vice President Melissa Gopnik. “With our pilots in raise-affected communities in New York, San Francisco, and Oregon, we have been developing strategies to help workers get where they already want to go. We are excited to bring this work now to Chicago,” she said.
Research shows that savings—even at small dollar amounts—can be a powerful tool to promote financial security. In its pilots in Chicago, Commonwealth will work with employers and workers to test cutting-edge savings strategies tied to the raise. Past raise pilot partners have included a social services organization with over 700 employees, a custodial services company with over 100 employees, a financial counseling organization, and a chamber of commerce.
While minimum wage increases can seem small, the earnings bump adds up: Chicago’s $1 an hour increase could aggregate to well over $1,000 in additional income for impacted workers.
Data from Commonwealth’s past raise pilots indicates that lower-wage workers view raises as an opportunity to strengthen their finances. In one pilot, 70% of workers impacted by a raise said the raise made them “rethink” their finances. And Commonwealth’s research indicates that raise-centered strategies benefit employers as well: in a survey Commonwealth conducted of vulnerable workers, 27% said employer financial security benefits tied to raises would increase their productivity at work, and 16% said such a benefit would increase their attendance. 91% of workers in a New York pilot said employer efforts to strengthen their financial position would make them at least somewhat more likely to stay at their jobs.
Commonwealth is currently conducting outreach to potential pilot partners and other constituencies in advance of the raise. It will release findings from its pilots in the fall.