How Socioeconomic Status Affects Employee Well-being

According to the Center on Budget and Policy Priorities (CBPP), 1 in 9 full-time workers have low-paying jobs that leave their family below the poverty line—a number that is expected to grow in the next decade, as most occupations will add jobs that pay anywhere from 22 to 30% below the national median.

Socioeconomic status (SES) is the combined measure of economic status (income), social status (education), and work status (occupation). Lower SES levels directly correlate with declining employee well-being. This is especially true for those who hold multiple hourly jobs, each with physical, emotional, and cognitive demands. Moreover, these employees are prone to poorer physical and psychological health, finding themselves, oftentimes, at a higher risk of work-related injury and mortality.

When SES decreases, the likelihood of negative well-being increases, and not only for those who live under the poverty line. Because of this, many are questioning how social and economic inequalities shape individual and organizational environments, as well as how workplace practices affect SES and employee well-being.

Therefore, in “Socioeconomic Status and Employee Well-Being: An Intersectional and Resource-Based View of Health Inequalities at Work,” Walton College’s Maira E. Ezerins and Christopher Rosen, along with their coauthors Kelly P. Gabriel (University of Arizona), Allison S. Gabriel (Purdue), Charmi Patel (University of Dundee), and Grace J. H. Lim (Nanyang Technological University), explore how job demands and resources connect and influence an employee’s relationship between SES and well-being, as well as uncover what individuals, organizations, and policymakers can do to improve health inequalities in the workplace.

The Connection Between SES and Well-Being

Although lower SES is linked to poorer physical health, higher risk of injury, and increased mortality, little is known about how work pressure, stress, and demands impact the relationship between SES and employee well-being. Nor is much known about the role of the socio-environmental context, like understanding who is more vulnerable to health inequalities based on their demographics or environments.

Employee well-being is an individual’s evaluation of their life and ideal physical and psychological functioning and experience. Physical well-being refers to bodily health, including blood pressure, cortisol levels, disease, and illness, or subjective health, which is the perception and evaluation of health status. Psychological well-being refers to mental health, including feelings of happiness, satisfaction, and depression, hedonic well-being (maximizing pleasure and short-term gratification) and eudaimonic well-being (self-fulfillment and long-term flourishing).

Job resources – object, condition, personal, and energy – are primary influences on employee well-being, and stress occurs when resources are threatened or lost. Employees working lower SES jobs with fewer resources will likely experience more current and future resource loss, as well as higher health-harming demands.

Conversely, higher SES jobs may have more demands, but they also provide resources that buffer against them. If there are more developmental opportunities, an employee will likely feel more energized at work and confident in their abilities. With this, employees with increased job resources are more likely to experience resource gain, like network expansion, promotions, and moving to a higher SES bracket over time.

Understanding the connection between SES and well-being, however, requires seeing how job demands and resources affect employees.

The Effect of Job Demands

Job demands can be physical, psychological, social, or organizational characteristics, including exposure to hazardous chemicals, emotionally draining interactions with customers, and fast-paced complex tasks. Demands like these can halt growth and promote burnout over time, so they require physical, cognitive, or emotional effort and skills to navigate. Three main job demands relate to SES – physical demands, psychological demands, and precarious work – each playing a role in explaining SES gradients in well-being.

Physical demands are “events and work characteristics that affect individuals via a direct physical process.” Employees with lower SES are more likely to face physical, hazardous demands, including exposure to chemicals, noise, and repetitive movements, contributing to ill-being and socioeconomic inequalities. Blue-collar and physically demanding work, such as construction, factory, and agricultural occupations, may result in worse health later in life than other jobs. Likewise, physical demands lower well-being by increasing employee accidents, injuries, diseases, and early retirement.

Psychosocial demands are events and work characteristics that affect individuals via a psychological stress process. Both higher and lower SES employees are likely to face psychosocial demands like work overload, multitasking, emotional demands – workplace mistreatment and bullying – and poor job design, affecting employee well-being. For example, a night shift labor and delivery nurse who also clocks in extra hours every week will likely experience worsened mental health caused by stress and burnout.

Precarious work is an individual’s psychological experience of insecurity, instability, and powerlessness related to their continuity and quantity of work; these experiences include uncertain work conditions, unpredictable continuity, and limited rights and protections. For example, lower SES workers often have temporary, part-time jobs with lower security than higher SES employees, impacting their well-being, including increased stress, worsened health, and psychological distress. 

Why Job Resources Matter

Job resources, such as job control, social support and recognition, may be able to offset the detrimental effects of job demands, as they help employees cope with stress, increase motivation, and promote growth. Moreover, resources stimulate engagement at work and positive organizational outcomes while also reducing ill-being in employees.

Job control, the most common resource, is an employee’s ability to influence their work environment, controlling where, when, and how work is performed; and it is positively related to SES. For instance, lower SES employees often have less control over their tasks and schedules, while higher SES employees have more control.

Job control also can reduce stress and improve health. For example, a study surveying 3,965 Japanese employees found that those with more control over their job – working patterns and pace – likely had higher levels of improved health and well-being. The relationship between job control and employee health is consistent across education and income levels.

Social support, the direct or indirect emotional aid from coworkers and supervisors, can buffer the negative effects of job demands. Having a supportive work environment is crucial for employee well-being and health. Nearly 1,500 U.S. employees reported that their enhanced well-being relates to how integrated with and supported by coworkers they felt. Further, those who reported increased cooperation and help in their work environment were more likely to experience improved self-reported health.

Following a pattern, lower SES employees may receive less recognition and fewer opportunities for advancement than higher SES employees. Recognition can encompass being noted “for one’s performance, dedication, and value to the organization, as well as opportunities for advancement, such as promotion and developmental opportunities.” Recognition has a major positive impact on well-being and motivation, seeing as professional growth and satisfaction with one’s performance is positively related to employee health.

The Role of Context: Passageways to Well-Being

The researchers studied both certain demographic characteristics – gender; race, ethnicity, immigration status, and age – and environmental contexts – global events, country characteristics, and organizational characteristics. Their study prompted two questions. First, how do these factors influence access to resources and unique demands that different demographics face in different environments? And second, how do they impact the relationship between SES and employee well-being?

Demographic Characteristics

Men and women often hold different social positions in the workforce, as women often face more demands and have fewer resources, creating more disparities in well-being. Additionally, racial and ethnic minorities, immigrants, and migrant workers tend to experience higher demands and lower resources compared to majority social group workers with similar SES levels, having a decrease in well-being. Lastly, age matters, as both younger and older workers are uniquely vulnerable to lower SES levels, lower-status jobs, poor mental health, and precarious employment. Compared to middle-aged workers, these individuals experience more job demands, less resources, and worsened well-being.

Environmental Contexts

Cultural differences, organizational factors, and welfare policies – like Medicaid and Social Security – can moderate the relationship between SES and employee well-being , thus shaping job resources and demands. For instance, global events like pandemics can worsen pre-existing employee health disparities. In several COVID-19 studies, lower SES Canadian employees had higher infection rates and were less likely to work remotely, and remote U.K. employees had the biggest mental health decline during the pandemic.

Addressing and Improving Employee Well-Being

The strongest and most consistent findings Ezerins and her coauthors found concern the impacts of job demands and demographic characteristics. They concluded that SES levels and physical work demands negatively impact employee well-being. Precarious work particularly harms the well-being of those with lower SES. Furthermore, job resource and demand imbalances have a larger and more negative affect on employees based on demographic factors such as gender, race, ethnicity, immigration status, and age. 

Through addressing the relationship and deficits between SES and employee well-being, the researchers take a step towards enabling employees to flourish in their workplaces, as well as promoting well-being across varied SES levels and demographics. By urging individuals, organizations, and policymakers to improve working conditions and promote equity, employees can be healthier, happier, and more productive in their work and profession, as well as have more robust well-being outside of work.