Many structural and systemic factors, including job quality and wages, costs of housing, health care and overall living, influence Americans’ opportunities to build financial security and generational wealth. With the current policies and systems in place, far too many households are struggling just to get by, much less get ahead. For example, the Prosperity Now Scorecard finds that more than 45 million households don’t have enough cash on hand to weather an emergency. Many are saving regularly but also continually depleting savings to meet current needs, and therefore struggling to accumulate savings over time. This makes it nearly impossible to build generational wealth. The Biden administration’s American Jobs Plan (AJP )— while still high-level in its current form — would take steps toward increasing financial stability and security for millions, both of which are critical pre-conditions for household wealth-building.

In two previous blog posts, we explored how the AJP would create more affordable housing and have implications for fair housing practices as well as provide entrepreneurs and small businesses with greater access to credit and capital. In addition to these critical wealth-building pillars —housing/homeownership and entrepreneurship — the AJP has multiple job-quality focused elements that would support households in building financial stability and security. Two notable elements are strengthening wages and benefits for essential home care workers and creating prevailing-wage jobs while ensuring workers have a fair choice to organize, join unions and bargain with employers.

The AJP links the need for supporting rights to organize unions and collectively bargain with employers to creating high-quality jobs that pay sufficient wages. Over the last several decades, the weakening of the labor movement has increased economic inequality and contributed to stagnating wages that have not kept up with the cost of living. Further, these trends have increased racial economic inequality as racial and ethnic minorities are more likely to work in low-wage occupations and have less in savings. It is clear that these job-quality issues are directly linked to shaping wealth-building opportunities. Prioritizing unions and related job-quality issues like minimum wage increases and paid sick leave will support millions in building financial security. Further, prioritizing the creation of high-quality jobs with prevailing wages (at a minimum) will have an impact on racial wealth equity and gender equity. However, as these problems are multi-faceted and include structural and institutional discrimination, raising wages alone will not solve issues of racial pay gaps.

The AJC also targets one low-wage, essential profession: home care workers. Home care workers, a category that includes roughly 2.2 million employees, are primarily women and people of color; they make on average just over $10 an hour. With an aging population, this profession will grow in size and importance in the coming decades. The AJC’s plan calls for creating more jobs in this field while raising wages and increasing benefits. Home care workers’ labor, and the labor in many similar professions, is undervalued in the current system and that lack of appreciation prevents workers from building household financial security. With increased wages and benefits, such as paid sick leave and access to retirement and other incentivized financial wellness supports, these low-wage workers will have new opportunities to reach their financial goals.

These AJC provisions, while still not fully fleshed out in legislation, provide a promising opportunity to address some of the systemic factors that prevent millions of people from getting on the path towards building wealth. By investing in job quality through unions, wages and benefits, we can support establishing a baseline level of financial stability and new opportunities for formerly low-wage workers to build wealth.