How companies' business models put workers in a 'low-wage trap' — and how to break the cycle

Employers are often resigned to high turnover in low-wage jobs as a “cost of doing business,” and therefore don’t fully commit to retaining or upskilling workers in those positions, according to a new report published this week.

Fuller and his co-author, Managing the Future of Work program director and senior researcher Manjari Raman, based their analysis on a literature review; resumes and job postings from 2012 to 2017 from the Emsi Burning Glass databases; and their own surveys conducted from September to November 2020 of 1,025 U.S. low-wage workers and 1,150 business leaders at various levels, as well as one-on-one interviews.

More than half of workers surveyed said their employer hadn’t discussed what skills they should obtain for advancement, nor how to obtain them. Only 55% said a mentor or supervisor had at any point helped them succeed. “Companies very often don’t walk the talk relative to the support they give low-wage workers,” Fuller said. “While companies can have policies endorsed by senior management to provide that support, unless it happens on the shop floor, in the restaurant, in the retail location, delivered by that frontline manager, it doesn’t happen.”

The authors defined upward mobility as “an improvement in skills that enhances an employee’s productivity and results in an increase in the employee’s pay or a promotion or both.”

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