Introducing the

Just Wage

Just Wage Forum 2021

Criterion 2: Wage Enables Asset Building

A just wage offers disposable income, enabling savings and property ownership; provides benefits in the form of educational enrichment, professional development and skills enhancement; and promotes opportunities for advancement and income growth. Further, a just wage structure facilitates personal and community development.

wage enables asset building


A just wage must not be so narrowly conceived to allow a worker only to scrape by, surviving paycheck to paycheck. Beyond income enabling a decent life for the worker and the worker’s household (see Just Wage Criterion 1), a just wage should also facilitate asset building in the form of savings, property, skills, and some wealth to pass on to future generations. As a 2019 report from the Federal Reserve Bank of St. Louis correctly frames it, “Income allows a family to get by; wealth allows a family to get ahead.” Both are critical components of a just wage.

Researchers increasingly see wealth (what people possess) as important as income (what people earn) in shaping individual and family prosperity, as well as subjective well-being. Indeed, if increasing income inequality has characterized the US economy for the past several decades, increasing wealth inequality has grown at even more alarming rates. There is a plethora of accessible online research documenting wealth inequality, its negative impact on workers and households, and ways to counteract it; good places to start include the Organisation for Economic Cooperation and Development’s Library, the Poverty Solutions initiative at the University of Michigan, Washington University in St. Louis’s Center for Social Development, and the Pew Research Center.

The coronavirus pandemic has only exacerbated this wealth gap. At the same time poverty rates have spiked during the COVID-19 induced economic downturn, a recent report by the Americans for Tax Fairness and the Institute for Policy Studies reveals that the combined wealth of all US billionaires has increased by more than $1 trillion.

To characterize the wealth gap solely in class terms, however, would drastically distort the picture. As a 2020 Brookings Institution paper reports, “staggering racial disparities” in wealth reveal both the intergenerational legacies of slavery and white supremacy and the persistence of discriminatory policies today. As of 2016, for example, the net worth of a typical white family in the US was $171,000, compared to a typical black family’s $17,150, a shocking factor of ten. And again, the twin public health and economic crises prompted by COVID-19 have only made an alarming situation worse, as black and brown workers and households have borne the brunt of the decimation.

For generations, asset building has been the tool working families have used to achieve the American dream of upward mobility, and racialized access to that tool -- in terms of job opportunities, income, workplace-based benefits, home ownership, or quality education -- has produced the stark racial wealth gap we confront today. This is why a just wage must not only promote asset building, but also prohibit discrimination (see Just Wage Criterion 4).

If asset building is central to people’s well-being, then we must confront the alarming fact that the top 10% of American households own more wealth than the bottom 90% combined. In addition to the many policy solutions proffered in the studies linked throughout this brief essay, we close here with two concrete approaches to fostering asset building among workers.

One avenue to asset building is employee ownership, which can take many forms, from worker cooperatives to Employee Stock Ownership Plans, or ESOPs (company-sponsored retirement plans by which workers accrue stock in their own employer). ESOPs are the most common form in the US today, and a 2019 study by Rutgers University’s School of Management and Labor Relations argues their benefits. According to the report’s authors, ESOPs promote economic stability and security for workers, with multiple positive spillover effects both at the workplace itself and in workers’ households -- and with especially pronounced impacts on lower-income workers and workers of color.

A second avenue, community wealth building, considers asset building at the city or regional level, an innovative approach to economic development pioneered by The Democracy Collaborative (TDC). As TDC members argued in a 2016 essay, “The mindset missing in traditional approaches is commitment to place, and a recognition that economic entities can be designed to benefit community. Community wealth building begins with a devotion to place, and with a respect for all those who live in a place.” The community wealth building model deploys a variety of interconnected institutions and strategies in order to keep the fruits of local economic development within the area, including anchor institutions, impact investing, community land trusts, and employee ownership of enterprises. For one important success story, check out The Cleveland Model (For other examples, see the “Who Does It Well?” resource tab on this webpage).

Conventional wisdom might suggest that asset building should run second to a living wage when assigning economic priorities; after all, one must have food, housing, transportation, and other contributors to a decent life today before considering amassing wealth for the future. As this brief essay suggests, however, the security, stability, and upward mobility promised by asset building profoundly shape the here and now, revealing the inextricable centrality of asset building to a just wage.


This page was last updated on March 15, 2021. It was written by Dan Graff and Anastasia Reisinger.


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