By Michael Morris, Executive Director, National Disability Institute
U.S. Secretary of Labor Thomas Perez issued a new five-year strategic plan recently for the U.S. Department of Labor (USDOL). He begins his Secretary’s message in the plan by stating that, “for 100 years, the Labor Department has been central to safeguarding and expanding the American dream for working families.” He explains that USDOL will build “an economy of opportunity where all Americans who work hard and act responsibly have the opportunity to reach and remain in the middle class.” One of five articulated strategic goals is to: “secure retirement, health, and other employee benefits and, for those not working, provide income security.”
Secretary Perez’s reaffirmation of the role of USDOL in safeguarding and expanding the American dream for all working age adults is an inspiring and important distinction at this pivotal moment in the economic advancement of our nation and our citizens. His inclusive vision incorporates a vital focus on “more opportunity for people with disabilities to contribute productively to the workforce.” He explains that the best way to promote and protect opportunity is through “collaboration, consensus building and pragmatic problem solving that achieve common sense solutions for workers and employers.”
One such pragmatic solution to safeguarding and expanding the American dream for working families with and without disabilities could include greater expansion and focus on building the financial capability of American workers and thereby enhancing American business performance. A 2010 Federal Reserve study found employee financial stress costs employers an average of $5,000 per employee per year in lost productivity. With millions of Americans with and without disabilities still looking to return to or enter the workforce and have the opportunity to reach the middle class and the next rung on the economic ladder, putting financial capability tools and strategies that reduce financial insecurity in the hands of all job seekers and workers would be a positive step toward this goal.
Fortunately, the foundation to support this goal is already being built. The Disability Employment Initiative jointly funded by USDOL’s Education & Training Administration and Office of Disability Employment Policy (ODEP) is pioneering new ways to advance financial capability as part of the American Job Center (AJC) service delivery system. The Consumer Financial Protection Bureau’s (CFPB) Office of Financial Empowerment and ODEP recently formalized a joint commitment to help workers with disabilities increase their financial capability. Consumers, regardless of their disability status, need to better understand their rights, how to manage their money, strategies for savings, the importance of credit and credit-building and how to evaluate financial products to best meet their needs.
With the groundwork in place, prime opportunities exist to implement Secretary Perez’s vision. Four such unique opportunities for Secretary Perez and USDOL to advance financial capability for youth and working-age adults with disabilities could include:
Expanding the collaboration between the USDOL and the CFPB with a commitment at the executive level between Secretary Perez and CFPB Director Richard Cordray to blend and braid the resources of both federal agencies to identify opportunities within American Job Centers to strengthen the financial capability of job seekers regarding money management, improved credit scores, debt reduction and savings. Printed and online versions of CFPB resources could be offered within each AJC to help workforce development professionals assess job seekers’ financial health and identify community resources to respond to individual needs.
- Issuing joint USDOL and CFPB guidance on the importance of improving financial capability “to reach and remain in the middle class.” Through the recommendation of additional promising practices regarding free tax preparation assistance, credit scores, financial education classes and individual counseling and coaching within AJCs, workers would have access to the tools and strategies they need to advance their financial stability.
- Holding an invitation-only employer summit on the importance of financial capability for workers. Such a summit could highlight employer efforts to expand employee benefits including employer-sponsored assistance to help employees make informed decisions on retirement planning, savings, debt reduction and asset building. Recommendations for action can be adopted by the workforce development system.
- Integrating financial capability development into core and intensive services of AJCs that are a value added proposition for job seekers and employers. Consider modifying the performance metrics of AJCs to capture outcomes achieved regarding debt and credit management, accessing favorable tax provisions (EITC, Child Care, WOTC) and meeting savings goals.
USDOL can “protect and promote opportunity” by embracing the urgent need to diminish financial instability for individuals with and without disabilities and working families through expanding collaboration with CFPB, financial institutions and community groups. By harnessing the power of collaboration and creating systems to fortify and promote the vital link between employment and financial capability as a key catalyst to individual financial stability, we can truly advance the American dream for all citizens.