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Originally published March 22, 2014 at 4:09 PM | Page modified March 24, 2014 at 9:28 AM

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Guest: How raising the minimum wage to $15 would hurt a nonprofit

Immediately increasing the minimum wage to $15 per hour in Seattle would be extremely problematic for nonprofit organizations that provide care for people with intellectual and development disabilities, writes guest columnist Sylvia Fuerstenberg.


Special to The Times

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CAPTURING the complexity of raising the minimum wage is difficult.

As a nonprofit leader who is concerned with social justice, I’ve lost many nights of sleep considering this issue.

How can we build a more just and equitable community without bankrupting the organizations that help our most vulnerable?

That’s what may happen if the city of Seattle raises the minimum wage from $9.32 to $15 an hour. An advisory committee appointed by Seattle Mayor Ed Murray is exploring how to raise wages to $15 and is expected to recommend changes at the end of April.

Support for a minimum-wage increase is spreading regionally and throughout the country. President Obama in a recent address stated, “... Americans overwhelmingly agree that no one who works full time should ever have to raise a family in poverty.”

We agree on this point, but the timing and planning of the implementation is critical to keep businesses and nonprofits sustainable.

In my agency, The Arc of King County, I’m responsible for 77 employees. Since 1936, The Arc has provided supports and services to individuals with intellectual and developmental disabilities and their families throughout all of King County.

In Washington state, people can either choose to get care in one of the state’s four institutions or opt for services in the community in an integrated setting, at a much reduced cost to the state. The Arc provides care in the community.

Our task is to help them to be fully included in the city’s neighborhoods and places of work. Services vary greatly: We help with basic hygiene and getting dressed. We help make meals, get them to jobs and arrange family visits. We ensure our most vulnerable residents live a life that approaches what we all take for granted every day.

Some people are advocating for a $15-per-hour wage across the board immediately. This level of increase is extremely problematic for supported-living providers.

The funding for these vital services is appropriated by the state Legislature, matched with federal Medicaid funds and allocated to hours of service. As a result, providers are limited in how much we can pay employees. We cannot simply raise prices to meet a new minimum wage.

The magnitude of the cost associated with a minimum-wage increase cannot be overlooked.

In Seattle, supported-living providers would need an additional $8 million in funding a year to provide the same level of service and provide a $15 minimum wage.

Just raising wages for Seattle isn’t feasible given the regional footprint of our supported-living providers. We would not be able to pay employees working in Seattle $15 and those in Bellevue only $10. We would need to raise wages for all of our employees regardless of where they work.

Providers in King County would need an additional $26 million in annual funding to increase the minimum wage to $15.

If the minimum wage increased to $15 today, my agency alone would immediately need almost $500,000 to cover the increase. That’s money no one is offering — not the state, county or city. Because we’re contracted by the state to provide specific hours of service, we can’t reduce service hours to increase wages.

Raising the minimum wage to $15 would also force us to raise wages further up the chain. While a minimum-wage increase is good news for those on the low end of our pay scale, it is a perceived reduction for those at the midrange who now make $13 to $19 an hour.

A wage, minimum or otherwise, is not simply a number attached to a job. Employees with higher responsibilities will not continue performing well if they are paid the same rate as the people they supervise.

Some have talked about creating exemptions for nonprofits and small businesses. While I’m glad there’s a willingness to discuss alternatives, I don’t believe nonprofits would actually benefit from an exemption. I worry that an exodus of trained employees would leave the field in search of higher-paying jobs with fewer responsibilities.

Already, turnover in the supported-living services sector is 32 percent, and it is terribly disruptive to the people for whom we care. Additionally, our work takes special training, and every time we lose an employee, we have to invest more resources to train new ones.

If the higher wage is required only of for-profit businesses, attrition would rise as workers opt for private-sector jobs that are perceived as less stressful, require less training and suddenly pay higher wages.

Raising the minimum wage is an emotional issue. But the rhetoric must match reality. Although I only speak for my agency, let me be clear: We cannot achieve shared prosperity by passing a plan that risks putting nonprofits out of business, leaving vulnerable citizens without support.

I would support raising the minimum wage to $15 carefully and in stages, while taking into account factors that determine whether a business or nonprofit keeps its valued employees, or even stays in business.

An increase to $15 must be phased in to give time for the Legislature to adjust. It must take into account health-care and other benefits, and it should consider some kind of temporary training wage to preserve opportunities for those with fewer job skills. We must adopt these policies for everyone — no exceptions.

Until we reach consensus and move forward together on minimum wage, you can bet my sleepless nights will continue.

Sylvia Fuerstenberg is executive director of The Arc of King County, providing support to families and people with intellectual and developmental disabilities. She has a master’s degree in social work.



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