A Place to Call Home: How Much Can Workers Bear to Lose?

A group of students sharing a Cleveland apartment had a surprise last week when the sixty-year-old cashier from the dry-cleaning shop next door asked if they had a room available. He was being evicted from the apartment he’d lived in for most of his life after COVID-19 left him without either of his two jobs. The owner of a two-family walkup a few blocks away accommodated her tenants, charging them half the usual rent with the agreement that they’ll pay the rest when they return to work. However, that duplex owner is just keeping up with her mortgage, and she wonders whether repayment will ever really be feasible for a couple who were living paycheck to paycheck already.

Renters are responsible to landlords, who are responsible to banks, who answer to investors. “I call it the responsibility chain,” Tom Bannon, CEO of the California Apartment Association, told the New York Times.[1] This leaves the question: who is responsible to the renters? Where do employers fit in this “responsibility chain”?

The pandemic has kicked away the fragile economic support system for millions of low-income workers. While the House of Representatives has passed a bill that includes $100 billion for rental assistance, the Senate has thus far refused to consider it. Without the most basic unit of stability—a place to call home—there can be no reliable workforce. And businesses that need to restart from a position of strength may find themselves looking to workers overwhelmed by financial stress and unable to focus on their jobs.

Of course businesses are hurting too, but employers who help pull their workers back to their feet will be able to welcome customers back with confidence and will likely reap rewards in loyalty and productivity in the years to come.

What workers need to get back on their feet right now is money—money to pay the rent on time. That’s why PayActiv provides Earned Wage Access, so workers can draw their salaries almost immediately upon their return. PayActiv helps employees avoid the fee and debt traps that can swallow earnings and provides free one-on-one financial counseling for our clients.

We are also finding ways to go further. As the pandemic loomed and many lost jobs with no warning, our customer service representatives started getting new kinds of calls. People didn’t just want financial advice or information, but they were desperate for even a small sum that would help them feed their families, and they didn’t know where else to turn. They asked if they could borrow money from us. PayActiv is not and will never be a lender, but those requests spoke volumes. We didn’t lend them money. We gave it to them. These were small sums, mostly under $100, but enough to feed a family until the food bank opened again or to buy necessary medication. We allocated $100,000 for that purpose.

Then we went further, launching the Access Foundation with contributions from our partners, including Walmart and Target, so that we could give grants to workers in temporary need.

What else can employers do? The race is to be swift, to be kind, and to be unconventional. When Trader Joe’s and Starbucks started offering health insurance, they gained stable, loyal, engaged employees and raised the standard their customers could expect.

The next transformative business idea may not be a new software or distribution method; it may be a way of ensuring stability for working families. PayActiv is leading the way.

Who will be the next and the next after that? Where might this path take us? Into a new economy that supports workers and creates more productive, vibrant workplaces? Necessity is the mother of invention, and never has the need been so great.

[1] Sarah Mervosh, “An ‘Avalanche of Evictions’ Could Be Bearing Down on America’s Renters,” New York Times, May 30, 2020, https://www.nytimes.com/2020/05/27/us/coronavirus-evictions-renters.html.