Nonprofit Wage Issues Emerge Front and Center across the Country

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October 15, 2016; Missoulian

Between minimum and living wage ordinances and the new overtime regulations, nonprofits are working hard to make their payroll/budget/rate formulas work. In many cases, doing so will require pushing public funding sources to make it possible.

At Opportunity Resources in Missoula, Montana, there are 41 direct service provider jobs that remain unfilled. The organization, which provides support to people with disabilities, is having workforce issues—and they are not alone. The unemployment rate in Missoula is very low, between 3 and 3.5 percent, and at $10 an hour, the jobs pay two dollars less than fast food restaurants in town.

Jesse Dunn, the organization’s CEO, says that despite going to the legislature “cup in hand” [sic] every two years, pay rates have remained too low to be competitive even among low-wage earners. Two years ago, providers received a raise amounting to around 20 cents an hour, and two years before that, there was no increase at all. Dunn says they attempt to mitigate the low pay with flexible hours and training, but the fact of the matter is that a living wage is $15 an hour and this position pays only two-thirds of that.

Being understaffed means that the organization must cut back on programming. It recently sold one of its group homes because they could no longer staff it, and waiting lists for services have become longer. Dunn says that with the expansion of an aging population that is more likely to age at home, it is expected that more than a million additional direct care jobs will open up across the nation by 2022.

For the staff, thin coverage and low wages lead to working lots of overtime and weekend hours. This can spell burnout even for those who love the job.

In California, where a living wage of $15/hour will be required by 2022, the board of supervisors in San Mateo County is likely to require its contractors, many of which are nonprofits, to pay an even higher living wage of $17 an hour by the middle of 2019. The living wage ordinance will cost the county $4.2 million to implement.

Two county supervisors convened a working group made up of 12 nonprofit county contractors, one for-profit contractor, and a representative with the San Mateo County Central Labor Council. That group’s report will inform the supervisors’ ultimate decisions.

The cost of living in San Mateo County is one of the highest in the nation, with the top five percent of households earning $614,990 annually, according to the report issued from the subcommittee.

As the economy strengthened after the Great Recession, higher wage earners have seen their incomes recover and keep pace with, or exceed, inflation but lower wage earners have not seen the same level of recovery.

This is not just a bump in salaries but will hopefully allow people to live closer to work and help nonprofits to keep their good employees,” Supervisor Carole Groom said Friday. “We’ve got good people working for our nonprofits and we want to keep them there.”—Ruth McCambridge