NY’s Working Poor: Why Good Staff Livelihood Improves Business

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February 12, 2020 in Blog

NY’s Working Poor: Why Good Staff Livelihood Improves Business

Ever heard someone yell at a homeless person to get a job? That might only happen on T.V., but if you were to do that to someone in New York City, there’s a good chance they ‘d say, “I already have one.” The working poor are numerous in New York City. It’s unhealthy. The state has done much to help, and so have charitable organizations, but it’s not enough. Employers must ask themselves: “How can I help?” Well, this article will tell you how staff livelihood improves business health.

Poverty in New York City

In New York City, you might have a job, but that doesn’t mean you can afford to live. It’s a well-known problem, and it’s not as though it’s remained unaddressed. There have been improvements. Namely, the poverty rate in NYC fell to historic lows in 2018 (13.7%). But, even if you’ve come up from under the poverty threshold for air, that doesn’t mean you’ve reached a living wage. There’s a huge disparity in the federal poverty threshold, about $12,000/year for a single person household, and an actual living wage in NYC, better represented by the ALICE threshold.

ALICE Threshold

The 2018 ALICE (Asset Limited, Income Constrained, Employed) report estimates that it takes $23,148 for a single person to live in the state of New York–nearly double the federal poverty threshold. In other words, you might make $13,000 a year and you won’t be classified as impoverished, but you can’t afford to live. The report also shows that a staggering 45% of the employed in the state. Keep in mind. There’s are huge differences in the cost of living between cities in New York. It’s not 45% in NYC. It’s 45% in the entire state. That’s a huge problem.

Minimum Wage

As of December 31, 2019, the minimum wage for New Yorkers is $15 per hour. That’s about $28,800. That’s enough to live as a single person in New York based on the ALICE report, but that’s extremely tight. One bad medical bill, and you could lose everything. That’s not near enough to live as a family, which needs $68,808 a year to live. Not even a dual income household meets that. Not even close.

How You Can Improve the Lives of Your Employees

So what can you do to help? A lot! And it will help your business as well. Let’s talk about those things.

Employee Benefits

We talk a lot about employee benefits on this blog because they’re so important to both employer and employee. Getting this right can be the difference for many employed, yet poor, New Yorkers. Thankfully, we have a lot of documentation in this blog to help.

For starters, you can learn what benefits are typical for the industry you work in.

Next, learn more about benefits that are trending to get an idea of the range you can offer and how they can help improve employee wellness.

Finally, be particularly attentive to health care benefits, as these directly contribute to an employees livelihood. Health care is a must in the U.S. New York as a state has a pretty solid uninsured rate compared to the rest of the country, but a huge percentage (57%) of the uninsured population in the state is in the NYC. That’s where real change needs to happen.

Childcare and Parental Leave

Parental leave goes a long way with employees who are barely making ends meet. When an employed parent must take time off for a newborn, without paid leave, they face a difficult challenge. How can they continue to pay their bills if they’re not receiving a pay check for weeks or months at a time? Often they can’t, so they turn to loans, which of course they’ll be burdened to repay. The simple solution is to offer paid parental leave. Of course, this is beneficial to parents, but it’s also beneficial to employers. Those benefits include:

  • Improved productivity
  • Better retention rates
  • Healthier employees
  • Recruitment incentive

These benefits to employers are not exclusive to paid parental leave. They apply to all benefits you offer your employees. Happy employees, happy business.

In addition to parental leave for parents with newborns, offering parents with children benefits also improves their wellness. Universities are often very good at this, and other employers can learn from them.

Pay Raises

This seems obvious, but it’s a hard sell. If employers can save money on wages, they will. Paying the minimum wage where appropriate is usually not a problem when you’re hiring unskilled labor where there’s a surplus of candidates. It’s understandable. You’re running a business.

But I’d make an argument here that you’re probably spending more money paying minimum wage than you would be if you paid more than competitive jobs. As the economy improves, workers paid less are more likely to “job-hop”. The average cost of hiring a new employee is anywhere between $4,000 and $7,645, depending on which survey you look at. This also takes somewhere between 41 and 42 days, so the costs in decreased productivity on your team are probably even steeper.

Let’s math. The minimum wage in New York comes out to an annual income of $28,800. Let’s divide that by minimum and maximum average cost of hiring a new employee: $4,000 or $7,645. And to find the proportion we’ll multiply by 100.

4,000/28,800 = ~0.14 x 100 = 14%

7,645/28800 = ~0.27 x 100 = 27%

In other words, rather than lose employees because the company pays minimum wage, employers have room to increase wages by 14-27%. That means there’s room to increase wages by up to $4.05. $19.05/hour comes out to about $39,624/year. That’s a much livable wage. I’m not necessarily suggesting that you offer all starting employees that much money, but I am suggesting that you demonstrate a plan to increase wages over time and work toward it, giving employees incentives to stay on board.


There are many generous, philanthropic companies in New York. What you might not have realized is that you can turn some of that charity inward, offering charitable donations to your own employees. This doesn’t disqualify you from the tax breaks you would receive from any other charity either. The best part is that you’re helping the people who help make your business successful in the first place. Again, staff livelihood improves business.


New York, especially New York City, has people working who are poor anyway. It’s certainly not the only city in the world to have this problem, but given that it’s such a symbol of what it means to be an American, it’s certainly the most consequential city to struggle with it. There are steadfast ways for employers to do their part in amending the issue. You can offer substantial benefits. You can improve employee livelihood by offering paid parental leave. You can increase wages, even offering up to 27% more than New York’s current minimum wage. Finally, you can turn your charitable efforts inward. This isn’t no bane to your company either. You can improve productivity, retention, health, and you can even recruit more talented people. That’s why staff livelihood improves business health.