NCPR: Nonprofit Agencies, Workers Worried about Minimum Wage Hike Proposal

NYAPRS Note: NYS nonprofits would like to give their workers higher salaries in keeping with Governor Cuomo’s proposal to hike the minimum wage to $16 per hour by 2019 in NYC and 2021 elsewhere. But they are alarmed about how to pay for it without increased funding from the Governor. A coalition of nonprofits providing services to New Yorkers with developmental disabilities called the Coalition of Provider Agencies projects the wage proposal will cost those providers alone, an extra $270 million in the coming fiscal year that begins April 1.  

NYAPRS is working with other health and behavioral health nonprofit advocacy groups on this issue. We will sending around a survey to gauge the impact of a minimum wage hike that was created by CHCANYS.   


Can North Country Not-For-Profits Afford $15 An Hour?

by Zach Hirsch North Country Public Radio  January 22, 2015


Not-for-profit agencies and workers are really nervous about the proposed minimum wage increase to $15 an hour.


These are agencies that try to help their communities in some way. They range from hospitals to research labs to social services. And they have a significant role in the North Country economy. An Adirondack Foundation study in 2013 found that 36 non-profits in the North Country generated more than $400 million in economic activity and provided roughly 10 percent of all the jobs in the region.


Since nonprofits rely on state funding, donations, and grants for their revenue, they have little control over their own budgets. If the minimum wage goes up to $15 an hour, they would need more donations and funding from state and local government. But many of these agencies fear they won’t be able to find that extra money.


Genie Denton is a part-time caregiver for people with developmental disabilities at Clinton County ARC. She makes from $9.75 to just under $12 an hour, depending on the shift. On those wages, Denton said “it’s impossible” to make ends meet. “You have to embrace creativity,” she said. “I get my clothes from a second-hand store. My car I will drive till it’s dead.” “I count every penny,” she said, and added that every day is a struggle. She’s a single mom with three kids, and she also works a second part-time job at another not-for-profit. Getting a raise to $15 an hour would really help her out. “That would be a significant boost," Denton said, "but I think that we have to be wise enough to know that it’s a bigger issue than that, and if everybody made more money what would the impact be on our economy? Where’s the money going to come from?”


So, this is the number one concern you hear when you talk to people in the not-for-profit world about the minimum wage; state and local government officials don’t yet have a plan for helping these agencies pay for the proposed increase. Governor Cuomo didn’t mention nonprofits at all when he talked about the wage increase in his budget address last week. “There is an unhealthy income inequality gap that is only growing,” Cuomo said. “I say lift up the poor and the working families of this state and pay a real, decent wage.”


“The state has, over the last probably seven or eight years since the recession, really cut back on nonprofits to begin with,” said Doug Sauer, CEO of the New York Council on Nonprofits, a network of about 3,000 agencies statewide. He said most of them support the concept of a wage increase, but they’re in no fiscal position to deal with it right now. “It’s true that we have a workforce that may be the working poor themselves in many cases, and are serving the working poor. And that’s a problem and our society shouldn’t allow that to happen. But until there’s a change in attitude that it’s a deserving workforce that should be paid reasonable salaries or above living wage, we got a problem,” Sauer said. Sauer said he thinks the state will keep cutting nonprofits’ funding, leaving agencies scrambling if the minimum wage hike becomes reality.


Steve Knight agrees. He’s CEO of United Helpers, a group that works with elderly and developmentally disabled people in St. Lawrence and Jefferson counties. According to Knight, a big part of the problem is this: unlike a for-profit business that can just raise the price of coffee or whatever it’s selling to compensate for the wage hike, it’s much harder for not-for-profits to absorb the cost increase. “We don’t control our reimbursement, so we can’t change our revenue if costs go up. We have to live within the parameters that we’re given for reimbursement,” Knight said. He said the minimum wage increase would cost United Helpers about $5 million. “That’s 10 percent of our total operating. I don’t know where that money would come from.”


Other nonprofit groups said the wage increase would force them to consolidate, end programs, and reduce workers’ health insurance and other benefits. And Knight said it’s not like you can raise the minimum wage and leave it at that. If you raise the minimum, he said, you’ll have to raise the entire pay scale, which would cost even more. He thinks the state hasn’t taken that into account. He said, “I mean there are ripple effects when you change people’s reimbursement, when you change people’s salaries or wages,” he said. “‘Why are they getting a raise and I’m not?’”


“Yeah, I think that I would advocate for myself to make more,” said Shayna Latour, a home caregiver for a developmentally disabled child in the Town of Peru. She makes $15 an hour now, and it’s just barely enough to cover her living expenses. If the starting pay goes up, she’d want a raise, too. She’s worked this job for almost five years. “I would probably ask for the same amount of raise, so at least $21. I know that would be a hardship but that’s the reality of the situation,” Latour said.


State officials have said they are sensitive to the nonprofits' concerns. A spokesperson for the state budget office said it is too early to say how much the state would chip in. Assemblywoman Janet Duprey said she’ll fight to make sure helping agencies get the funding they need to support the wage increase. “If there’s one thing that government absolutely in my opinion has the obligation to do, it’s to take care of those who cannot under any circumstances take care of themselves. And I’m not going to sit by and quietly let that happen, so, yes I will be very vocal,” Duprey said.


But most nonprofits aren’t getting their hopes up. Daphne Pickert, CEO of St. Lawrence NYSARC, said, “The whole scenario is rather grim.” Genie Denton, the Clinton County ARC caregiver, said she deserves to make a living wage so she can support her family, “but at the same time I know this money can’t just come from thin air.”


“I don’t know what the utopian ideal situation is because I don’t think it exists yet,” she said. It’s true – the $15-an-hour minimum wage is still just a proposal, and lawmakers will debate it in the coming weeks. Denton said she hopes state officials don’t forget about her line of work in the process.