A new research center opening at the University of Wisconsin aims at improving the economic status of low-income workers throughout state workplaces.

John Hoffmire, director of the Center on Business and Poverty, said after working with the center, companies could potentially increase the disposable income of 5 percent of their low-income workers.

“This improvement will come at little or no cost to companies,” Hoffmire said.

Research conducted through the center works to improve the overall net worth of low-income workers.

Hoffmire said they urge companies to teach their workers the value of using bank accounts prudently and directly depositing their paychecks. Avoiding cash-checking shops and payday lenders is also important, he added, because they are frequently costly.

The direct deposit of paychecks should be used in place of cash-checking shops, he said, because it could increase individual worker’s disposable income. Also, by staying away from payday lenders, workers could save 15 percent of each paycheck.

According to Hoffmire, businesses can encourage workers to take several measures to improve their net worth. Investing lump-sum payments in preparation for retirement is one way to accomplish this goal. Taking matches on retirement plans is another of Hoffmire’s suggestions.

In addition, buying shares of company stock and creating home equity are other potentially helpful actions an employee can take.

Simply utilizing the federal Earned Income Tax Credit can make substantial financial improvements, Hoffmire added. He said a family of four with one adult in the workforce would see a 36 percent increase in yearly income. Twenty percent of workers eligible for the Earned Income Tax Credit fail to take advantage of it, according to Hoffmire.

“At least 1 billion dollars is left unused nationwide,” said Hoffmire.

The Center on Business and Poverty will prove to be beneficial to the economy because as the economic wellbeing of workers improves, so will the condition of the economy overall, Hoffmire said. An increase in the average worker’s disposable income will result in greater consumer demand for goods and services, and in turn can lead to further economic growth, according to Hoffmire.

Hoffmire said new services implemented as a result of the center’s research will help in boosting worker morale.

“When workers feel well-respected, they are more likely to stay,” Hoffmire said, adding it leads to lower costs for training and a generally more productive workforce.

Some UW students are impressed by what the new center has to offer.

“It is exciting to know all of this ground-breaking research is happening here at our own university,” UW sophomore Valerie Alexander said. “It will be great to see the future results.”

The Center on Business and Poverty, which was established May 2004, is an initiative of the Institute for Research on Poverty.