IN THIS POST
In my last blog, we talked about how REDF has defined economic power, based on our research and the wisdom from our network. Now, let’s dive into why employment social enterprises (ESEs) are uniquely positioned to address economic power, and how we’ve tracked the success of our programs that work with ESEs.
We’ve identified three drivers of economic power — aka, the fundamental building blocks that allow you to build wealth and exercise control over your life and well-being:
- Dignified Work
- Sound Financial Resources
- Quality Standard of Living
Or simply: Work, Wealth, and Well-being.
And from our experience, ESEs have a unique access point to each of these building blocks.
How employment social enterprises lead the way in building economic power
ESEs don’t just offer a job; they help workers begin accessing wealth-building systems and maintaining or improving a precarious standard of living. Support across these three drivers braids together to bolster an individual’s progress on the economic mobility spectrum.
1. Dignified Work
Employment social enterprises are uniquely positioned as social impact leaders in building economic power. Their distinctive value — one that traditional workforce agencies don’t provide — is enabling individuals who face the toughest barriers to employment to receive a paycheck early in their return to the workforce.
Dignified work allows those who have faced barriers to employment to receive a predictable and family-sustaining income and receive recognition for their labor. Dignified work offers safety and freedom from harassment, predictable hours, flexible time off, benefits, and voice in the workplace, plus opportunities for skill building and career advancement.
Individuals hired at an ESE almost immediately begin working while receiving support to build stability and career navigation assistance. As a result, employment social enterprises offer something fundamentally different from government cash assistance programs: the freedom and dignity of unconditional earnings. Employment social enterprises have demonstrated through studies conducted in 2015 and 2021 that ESE employees have stronger outcomes than their peers who only received resume and interview support — including higher wages and long-term employment.
2. Sound Financial Resources (Wealth)
Access and knowledge of how to use sound financial services allows individuals to participate in formal wealth-building services, including savings and investment accounts, and allows individuals to adequately prepare for economic shock and plan for important purchases.
In the context of ESE employment, access to sound financial resources often looks like helping an individual get a checking account, understand their credit score, and learn budgeting skills, but, critically, it also looks like helping an individual manage through an unexpected financial emergency.
Many ESEs offer access to emergency loan funds or other emergency cash assistance, recognizing that even minor financial setbacks can have a snowball effect from losing transportation, to losing a job, to losing housing. In a focus group REDF led in 2024, ESE leaders told REDF that helping an individual through a small financial setback is about helping them to hold on to the progress they have made.
3. Quality Standard of Living (Well-Being)
Having a quality standard of living, including living in a stable, affordable, healthy, and safe environment, enables individuals to engage fully in wealth-building activities, and provides financial freedom and access to social resources that empower individuals to reduce stress, improve health and make informed decisions about their lives.
According to ESE leaders, the most common issues experienced by ESE workers occur in housing, transportation, childcare, and healthcare. Many ESEs exist within bigger housing or social services agencies and can offer their workers wraparound services ‘under one roof,’ while other ESEs invest in community partnerships and effective referral programs. Something consistently heard from leaders of ESEs was the interconnectedness of employment and reliable transportation. Reliable transportation was foundational for anyone to any wealth building activities.
Moving From Our New Definition to Action
Our shift to a more aspirational goal is already energizing our field like never before. ESE practitioners and REDF staff are fired up. This momentum confirms that centering economic power will:
- Better capture the positive impacts created by ESEs
- Better align REDF’s work with supporting participant employees to achieve their vision of “the good life”
- Better understand how ESEs and participant employees can achieve mutual success
The ripple effects are already happening. Our sister organization, RIIF, launched The Growth & Mobility Fund in California, offering discounted rates based on job quality — defined by our new economic power framework. Meanwhile, our flagship Growth Portfolio invested its entire 2025 cycle in ESEs pioneering new ways to build job skills that translate to better pay. (More to come on those projects!)
Economic power now anchors REDF’s next five-year strategy. We’re designing pilots that reimagine how we approach capacity building, capital, and community. I can’t wait to share what we discover about building economic power for everyone.
