Helping your employees achieve self-sufficiency

The minimum wage is rising, and it is currently enough to allow a single employee with no children to earn about what they need to be self-sufficient.  But what about a single parent with dependents or two minimum wage employees with two or more dependents?  Employers that have a significant number of jobs at or a little above the minimum wage can choose to develop an understanding of whether or not their employees are self-sufficient, and if they are not, provide the supports and pathways needed to help get them there. 

 A word before we go on…many of your families in low-wage jobs are struggling financially today, it is not only creating difficulties for them, it is hurting their performance at work, retention of those employees, and your bottom line.   However, stepping into helping them thrive financially means that you, your leadership team, their supervisor, your HR Department, etc. will need to understand details about their personal life that you may not currently feel comfortable knowing, and your employees may not currently feel comfortable you knowing.  Taking the next step down this path will be a game changer for you and your employees, but it requires not only that you care about each of your employees, but they also know that you care about each of them AND their family members.  You can’t care about some employees in some departments some of the time.  Your company culture needs to be one of caring about all of your employees at all times.  We understand if this is more than you are willing to tackle now.  If it is, please start with a few of the “Retention, compensation, benefits & incentives” recommendations, and think through self-sufficiency later.

So what is a self-sufficiency wage (also called a living or sustainable-living wage) and how much is it?  It is the hourly rate that an employee must earn when working full-time to support themselves and their family.  This wage depends on how many earners and how many dependents (as well as the ages and situation of each dependent) there are in the family, as well as where they live.  For instance a family of 2 in Denver county requires about $25/hr and a family of 4 about $34/hr in 2021.  If you want to understand more detail, the following calculators can help you determine how much a living wage is for different family situations in your county:


Both calculators compare an employee’s income and their expenses to find where they hit a self-sufficiency wage.  They take into consideration housing, food, transportation, child care, health care, savings for emergencies, miscellaneous expenses and taxes (both taxes paid and tax credits).  They also take into consideration the county in which a person lives, how many adults are in the family and how many children (with the CCLP calculator varying the expenses by the age of the children).  You can get a feel for the self-sufficiency wage for various situations in a few minutes by entering a few scenarios.

One path to take is to choose to pay a good wage (paying at the median or above) for each of your jobs.  This does help your employees, but it is an option that allocates your money generically to those that do and don’t already earn a self-sufficiency wage.  If you want to care for and nurture self-sufficiency in your low-income employees, a more strategic approach is to help them receive the salary and internal and external benefits needed to live a comfortable life in the short run, while helping them build the skills, and get the opportunities, needed for success in a job that pays a self-sufficiency wage over the medium/long run.  

The following are three actions you can take:

  • The first is to develop pathways from your jobs that aren’t going to pay a self-sufficiency wage into jobs that do, providing the support needed to help employees prepare for and then move into these jobs.  We cover this in the Advancement, promotion, skills, training, and succession planning  and Retention, compensation, benefits & incentives sections of this toolkit. 
  • The second is to provide benefits that truly support your low income individuals.  We cover this in the Retention, compensation, benefits & incentives section of this toolkit.
  • The third, which we cover in detail below, is that an employee that earns less than a self-sufficiency wage benefits from your help to obtain and keep additional support to make up the difference between their salary/benefits and self-sufficiency.  Many of your employees in this situation will qualify for government benefits or non-profit supports, and qualifying for and keeping them will be essential in helping them and their family thrive at work and home until they are ready for a job that pays a self-sufficiency wage.  With these benefits, their income is usually slightly above their expenses.  Without them, their expenses will usually exceed their income, often by a considerable amount.  

Without a good understanding of the journey to self-sufficiency, we see employees purposely avoid an increase in responsibility or advancement in a career, return a bonus, or refuse a raise – and we agree this is an understandable short-term approach even though it harms long-term success for the employee and employer!  With the proper support and planning, and by helping your employees grow in their career and compensation, you play a critical role in their journey beyond the need for additional benefits and support and on to self-sufficiency.

Detail on additional government/non-profit supports

We know it’s not your job to understand the ins and outs of government benefits; however, some knowledge, a few questions, and a little planning can help your employees thrive, while avoiding benefits cliffs.  What is a benefits cliff?  Because some government benefits end abruptly, a raise of $.25/hr could cause your employee to lose a benefit worth over $1,000, falling off a benefits cliff.  To understand when that could happen, you need to talk with your employees about the benefits they have and when they will lose them.  You can use this discussion as an opportunity to gain a better understanding of where they are thriving, where they are struggling, and how you can potentially help.

We’ve provided an overview of some of the benefits your employees qualify for and actions you can take.  There are several, so feel free to choose one or two to get started, and we are happy to help support you as you do:

  • Childcare is expensive (it can cost more than housing) and often difficult to find in a convenient location near work or home.  Employees that have high quality and dependable child care will be more productive and successful at work.  The Colorado Child Care Assistance Program (CCCAP) is available through the county government and substantially reduces the cost of child care for the employee.  Your role is to encourage them to apply for this benefit and provide a working environment that supports the use of stable child care (such as having consistent working hours).  Providing information about the CCCAP program could enable a new parent to return to work after the birth of a child.
  • Housing is the other huge expense besides childcare.  Getting a housing subsidy makes the difference between surviving and thriving financially.  However, only about 25% of people that qualify for a housing subsidy receive one because of limited funding.  An important action for you to take without cost is to provide information about the programs (such as section 8) they can apply for every year (most have a yearly drawing for those that qualify, but haven’t received it).  You can go beyond this to partner with non-profit organizations that provide subsidized housing – they would love to partner with employers that support their employees on the way to the shared goal of self-sufficiency.  There are also additional government programs that provide housing supports that differ by county. 
  • For employees with children, government tax credits are often thousands of dollars, particularly when they make around the minimum wage.  However, there is a substantial delay between when employees begin work, and expend money, and when they get the tax refund.  It is likely these employees will have expenses that exceed income on a monthly basis, until they receive a big check from the government to make up the difference.  It is no wonder that pay-day loans, with very high interest rates, are so widely used!  There is one important action for you to take without cost – make sure your low-wage employees estimate their tax situation, and know how to fill out their W-4 so they don’t pay income taxes each paycheck if they are going to get a significant refund at the end of the year (and almost all low-income employees will).  If you want to go beyond this, some employers connect their employees to no or low-interest loans tied to repayment when the employee receives a tax refund, with one option being detailed in the Solution Spotlight in Retention, compensation, benefits & incentives section of this toolkit
  • The best time for a person to qualify for benefits is often before their first day of work.  If you make an offer for a position that makes less than a sustainable living wage, encourage your future employee to work with their county government to determine the benefits they qualify for now and which they will keep when they start work.  For instance, this is a critical time for them to qualify for CCCAP.
  • Encourage your employees to understand how an increase in salary will impact their government benefits by working with their county case worker, and encourage them to let you know this information so you can help them plan for a loss of government benefits as they become more valuable employees.  Helping them to practice self-advocacy (a skill many have not learned) related to benefits and how raises impact them is part of helping them become more valuable employees.
  • Train and support your supervisors to understand how their team is doing financially and have your supervisors recognize and ask about important financial events that could change their situation, such as a change in living arrangements, marriage/divorce, a new child, significant medical events, or a car breaking down.  Having Employee Emergency Funds and good benefits enables your supervisors to go beyond recognizing potential issues to being able to take action to help your employees at critical moments in their lives.