Why is it that those with the least wealth are often required to front the money for the essentials needed to perform their jobs?

That’s a question that struck me one night when ordering pizza. At the time, I was working as a financial engineer on Wall Street. As I folded my slice in half, I started chewing over an idea. Low-wage workers like pizza delivery drivers — who are essential to our economy and lifestyles, as evidenced by the COVID-19 pandemic — are expected to not only have enough money to sustain themselves and their families but also to front the costs of gas, car insurance, repairs and auto registration. 

But it doesn’t have to be this way. Our outdated payroll system wasn’t designed to address the needs of today’s employees. An on-demand pay model, however, can give employees access to earned income, ultimately enabling them to change their socioeconomic status — while improving the bottom line for employers.

Understanding the debt cycle

Due to the nature of the biweekly pay model, workers are required to work for weeks without pay when they start a new job — and they typically must pay for certain essentials and supplies from their own pockets while they wait for their first paycheck. Because they often lack significant savings, this system negatively impacts low-wage and entry-level workers the most.

Restaurant cooks must pay for the public transport or gas required to get to their jobs, in addition to chef’s shoes and other necessities. Teachers are too often tasked with paying for their school and cleaning supplies. Even entry-level white-collar workers must purchase corporate wardrobes, and interns are often asked to use (and therefore pay for) their own laptops.

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