Overcoming Barriers: Tackling Classism, Socioeconomic Disparities, and the Cliff Effect in the Human Resources Sector
By: Rachel Jessen, NOARK INCLUSION Committee Chair and committee member Missha Wagoner with contributions from Melissa Spencer
January is Poverty in America Awareness Month and we are highlighting the issues of classism and socioeconomic disparities in the human resources sector. Employees can experience classism when they face differential treatment or prejudice simply because they belong to (or are perceived as belonging to) a particular social class (Byrd et al., 2018). And they can experience social class bias because people often believe or support members of their perceived social class over someone else. This can affect employees negatively when a human resource professional or leader lacks objectivity and favors members of their own social class or someone they know from their own social circle over others who are equally qualified. For example, hiring managers may favor someone who attended the same university as them or someone who lives in a more affluent neighborhood. Relying on one’s network of relationships and contacts is not a bad thing in and of itself and it is natural that many people make strides in finding a new job or role because of their social networks. We use our social capital anytime we utilize the network of relationships that we have among people we live and work within a particular society. But some applicants and employees do not come from backgrounds that helped them build and establish social capital. These individuals may need more support in finding ways to gain access to the networks they desperately need. The issue of inclusion and belonging is directly linked to social capital.
Life chances come about through life cycles. Employees handle income fluctuations differently. During times of financial stability, some employees may buy homes or vehicles based on a current salary in a good job. But in an economic downturn or recession, that same employee’s job or salary may change, and they are then no longer able to make payments they once made commitments about. They might face foreclosure or bankruptcy, or possessions might be repossessed. For other employees, although they too desire opportunities for “push up” in society, they may have accepted that they are in a certain economic or social class position in life and become accustomed to living paycheck to paycheck, so they live within their means (Byrd et al. 2018). The U.S. Federal Poverty Level for a family of 4 is only $30,000 a year so many American families meet the federal guideline (ADE, 2023).
In the autumn of 2023, NOARK member Missha Wagoner came across an organization dedicated to assisting individuals in breaking the cycle of poverty by establishing robust support systems in their lives. This organization used relationships to promote life change by building strategic connections with individuals and groups that can provide support and education. Being an HR professional, Missha saw an opportunity to apply her experience in areas such as resume building, interview preparation, and goal setting. Initially, like many, she believed that securing employment was the key to self-sufficiency, assuming it would eliminate the need for government assistance. However, her perspective quickly shifted as she encountered individuals facing persistent barriers hindering their progress. It became evident that the simplistic solution of "get a job" was not as effective as she had thought.
Missha’s education continued during the Arkansas State SHRM conference, where the prevalent topic of the limited talent pool underscored the challenges of filling open positions statewide. As an HR Director, she had already experienced the phenomenon in her work environment. The urgency of the situation became apparent when she heard a Circle Leader (someone who wants to move out of poverty) express the necessity of quitting her job due to the risk of losing housing for her family. This was not something this Circle Leader wanted to do, but felt she had no choice. This revelation prompted Missha to question how employers can support individuals navigating life cycles marked by socioeconomic disparities and, at the same time, expand access to much-needed talent to fill critical open roles.
Missha’s experiences of hearing the varied stories of the Circle Leaders mirrored the issue of life changes being intricately tied to life cycles. She was led to ponder whether it is our obligation as employers to assist individuals caught in these life cycles. Missha came to feel that, if the current talent shortage is a concern, addressing these challenges must become a part of our role.
Let's revisit the Circle Leader whom Missha met, whom we'll call Jackie. A dedicated and articulate young woman, Jackie works very hard to provide for her family, making sacrifices to ensure her children have a secure and comfortable home with the basic necessities. Working full-time while navigating the labyrinth of support programs for needs like childcare, housing vouchers, and food assistance is crucial for Jackie. Discussing the challenges of limited and overpriced housing in NWA, Jackie revealed she faced the heartbreaking decision of quitting her job to maintain housing, as her income slightly exceeded the threshold for renewing housing benefits. Jackie stood at the precipice of the Cliff Effect.
What is the Cliff Effect? It occurs when a pay raise triggers a disproportionate loss of government assistance, leaving the family worse off than before the raise. Even a modest salary increase can inadvertently push individuals and families off the metaphorical cliff, leading to ineligibility for subsidized benefits.
Even a small increase in benefits can lead to a family becoming worse off financially (Dinan et al., 2007 as cited in Roll & East, 2014). And families who receive work support benefits are often single women with children (Abramovitz, 2006 as cited in Roll & East, 2014). The loss of childcare benefits is one of the largest drops in net resources. For many families who reach an income cliff due to a raise at their job, they can only afford to take it if the raise is at least a $4.00 to $5.00 hourly increase amount (Roll & East, 2014).
This revelation about how the Cliff Effect impacts employees spurred Missha to reflect on pressing questions:
How many individuals like Jackie are we losing in our organizations due to socioeconomic disparities?
In what ways can we support those navigating the cliff as they are striving to be exceptional employees and parents?
Do our biases contribute to limitations for individuals in certain socioeconomic classes?
Are our established practices creating situations where individuals and employers suffer, exacerbating hardships?
We firmly believe that fostering safe and healthy conversations, bringing together thoughtful HR professionals, and thinking innovatively can pave the way for solutions to overcome the barriers posed by socioeconomic disparities in our workplaces.
There are undoubtedly more individuals who have found themselves in similar situations but have successfully overcome the cliff. Research indicates that such achievements are seldom solitary endeavors. For professionals eager to contribute to these successes and drive their organizations' Inclusion, Equity, and Diversity (IE&D) initiatives, understanding the strategies employed by individuals like Jackie and creating a supportive system are essential steps.
Recognizing the pivotal role of social capital in this journey, it becomes imperative for employers to invest in fostering an environment that promotes open and secure conversations, as well as collaborative efforts. By doing so, we not only encourage positive change but also lay the foundation for a workplace where individuals can thrive and overcome challenges together.
If you're interested in learning more about how you can contribute to building social capital or exploring alternative ways to overcome these barriers, we encourage you to explore organizations making a significant impact in our community. One non-profit organization in Northwest Arkansas is making strategic strides to support employees facing the Cliff Effect in their career paths. Led by their founder and Executive Director Christina Williams, Circles NWA is a community-driven program that works to increase upward mobility for individuals and families in poverty in Northwest Arkansas. Based on the national Circles®USA model, the Circles program builds intentional relationships (social capital) across socioeconomic lines that help open up long-term pathways for economic mobility and self-sufficiency. They also desire to help NWA human resource professionals gain greater understanding into the complexity of poverty. The Circles program can help practitioners increase our PQ – Poverty IQ – which directly affects our ability to empathize with the barriers our employees may be facing as they develop throughout their career. Circles has an 18-month cohort program which brings together Circles Leaders and Allies where they build community and focus on goal setting. HR practitioners can take a look at the work they are doing on their website and get detailed statistics and information in their 2021-2023 Three-Year Report.
How can human resource professionals address classism and socioeconomic disparities within their organizations and help employees overcome barriers caused by the Cliff Effect?
In the area of training . . .
· Provide training about
o the social stratification process about how resources are distributed in society.
o the six classes of the social class structure in the U.S. and their salient features.
o the psychological and physiological effects of classism.
o the presence and effect of social networking systems such as the “good ‘ole boy network”.
· Consider investing in the Inclusive Workplace Culture Specialty Credential through SHRM. Although focused on areas of implicit bias in areas beyond just social class, this credential helps practitioners know how to specifically address social class issues within organizations.
In the recruitment, interviewing, and hiring stages . . .
· Make sure a diverse selection of candidates are involved.
· Address bias in supervisors regarding where candidate searches are conducted.
· Carefully check algorithms.
· Confirm accountability.
· Ensure recruitment panels are diverse and mindful.
In the areas of development, evaluation, and recognition . . .
· Coordinate diverse candidates with the most effective managers and leaders.
· Verify equity in reward and recognition systems.
· Ensure everyone has access to professional development and stretch assignments.
In the areas of engagement and communication . . .
· Survey employee well-being.
· Create and maintain employee affinity networks and resource groups.
· Share turnover data to key decision makers.
· Conduct “stay” interviews.
As companies and organizations take a closer look at classism in individual behaviors and attitudes, institutional policies and procedures, and cultural norms and practices, human resource professionals can gain a wider perspective into the barriers some applicants and employees are facing as they progress in their career paths. We have some incredible employees in Northwest Arkansas who have so much to offer, and with additional awareness training, many HR professionals and organizational leaders will be able to offer the specific kind of support they need.
INTERESTED IN LEARNING MORE ABOUT CLASSISM & SOCIOECONOMIC DISPARITIES IN THE WORKPLACE? CHECK OUT THESE ADDITIONAL RESOURCES!
Peer-Reviewed Research:
· Roca-Puig, V., Beltrán-Martín, I. & García-Juan, B. (2021). Incorporating poverty in society into strategic human resource management. The International Journal of Human Resource Management, 32(13), 2759-2782. doi: 10.1080/09585192.2019.1640764
Online Resources:
· How the Cliff Effect Keeps People in Poverty Video – by Circles USA, 2016
· Circles NWA Three Year Report
· Socioeconomic Diversity in the Workplace Test Partnership Article (and video)
· HR, Poverty, and Advocacy Blog Post by Paul LaLonde, 2023
· Why You Should Address Workplace Classism Now Forbes Article by Deshaun Rice, 2021
· How Does Social Class Affect the Workplace? YouTube Video – with Professor Michelle Lee of Smith School of Business
· What Is Classism? YouTube Video – by Diversity for Social Impact, 2023
· Getting Poorer While Working Harder: The Cliff Effect Article in The Conversation – 2019
· Tackling In-Work Poverty: Guidance for Employers article on CIPD - 2023
· Growing Up in High Poverty Areas Can Affect Your Employment article – Monthly Labor Review in the U.S. Bureau of Labor Statistics, 2016
· Employment and Poverty: The Working Age Poor article on Econofact - 2018
· An Overview of America's Working Poor article on PolicyLink, 2023
Books:
· The Working Poor: Invisible in America book on Amazon – by David Shipler, 2005
· Poverty, by America book on Amazon - By Matthew Desmond, 2023
· Evicted: Poverty and Profit in the American City book on Amazon – by Matthew Desmond, 2023
· Reading Classes: On Culture and Classism in America Book on Amazon – by Barbara Jenson, 2012
Podcasts:
· Preventing the cliff Effect with Marybeth Campbell - episode on Public Hearing Podcast, October 21, 2022
· The Glass Cliff Effect - episode on Working Mom Hour Podcast, June 28, 2022
· Podcast - Center for Poverty and Inequality Research, University of California, Davis
Blog Post Resources:
Arkansas Department of Education. (2023). https://dese.ade.arkansas.gov/admin/Files/2023-2024_ABC_Family_Income_FPL_&_SFS_CNU.pdf
Byrd, M. Y., Martinez, J., & Scott, C.L. (2018). Social class and diversity in the workforce. In M.Y. Byrd & C.L. Scott (Eds.) Diversity in the workforce: Current issues and emerging trends. Routledge.
Roll, S., & East, J. (2014). Financially vulnerable families and the child care cliff effect. Journal of Poverty, 18(2), 169–187. https://doi.org/10.1080/10875549.2014.896307