FIGHTING $15: Nonprofits fear progressive initiatives could have unintended consequences

Though many are celebrating the Fast Food Wage Board’s recommendation to raise the minimum wage for fast food workers to $15 an hour, some nonprofits are describing it as one of several well-intentioned progressive initiatives that may end up hurting those on the front lines of social work.

Charles Houston, executive director of the Queens Center for Progress, a nonprofit that provides a host of services to adults and children with developmental disabilities, fears that without government intervention, the wage board’s decision will greatly impact nonprofits’ ability to retain workers who provide essential services to some of New York’s neediest individuals. 

“What differentiates nonprofits is that we have a very limited ability to increase revenue,” Houston said. “A commercial firm can raise the price of a service, or they have a profit margin and can fund a salary increase without raising prices. Neither apply to nonprofits. We’re a break-even operation.”

Houston worries that his organization’s inability to keep up with the new fast food industry wages will present hard choices for his employees. He says QCP offers a starting wage of just under $11 an hour for direct service professionals, the employees who work directly with disabled clients, providing educational, health and transportation services.

One such employee, Keshia Butler, a day service professional at QCP who leads instruction and provides supervision and transportation for disabled individuals, says the wage board’s decision will impact many nonprofit employees who love working with clients but desperately need increased income. 

“Yes, we’re passionate about what we do, but we don’t get paid,” Butler said. “Two of my girlfriends who work at agencies have multiple jobs just to make ends meet. Honestly, I would work two jobs if I could, but I have a young child at home, so my significant other is the one with two jobs right now.”

Given the harsh reality of supporting herself and her family, Butler says the fast food wage increase offers a choice she would rather not make.

“When I see stuff like this on the news, I think that maybe I should work fast food,” Butler said. “I’ll be less stressed, and it’ll be easier for me to pay all of these costs that keep adding up, like my son’s tuition and my MetroCard. Everything is going up.”

Some economists also share Butler’s concerns. Dean Baker, co-director of the Center for Economic and Policy Research, a Washington, D.C., think tank, agrees that the decision could apply significant pressure to the nonprofit sector.

“It could certainly present a difficult situation, where people will have to leave jobs where they are doing much more socially productive work simply because they need to put bread on the table,” Baker said.

However, Baker also noted the lack of historical precedence for such an isolated minimum wage increase.

“Unfortunately, we don’t have a lot of data on the impact a localized wage increase will have on the entire market,” Baker said. “The closest thing that we can point to is the Los Angeles hotel workers increase, and that was very recent. This is really uncharted territory.”

Despite these calls for concern, other nonprofit experts contend that wages are just a symptom of a larger problem—low levels of government funding for nonprofit services—and that the community would be better served by focusing on this root cause.

“Low starting wages for nonprofit workers are a manifestation of the larger issue of inadequate payment for nonprofit services,” said Jack Krauskopf, director of the Center for Nonprofit Strategy and Management at Baruch College.

“I think that it’s generally a good idea to raise wages for low-income workers,” Krauskopf continued. “If it has to be done incrementally, then it’s better than it not being done at all.”  

But Houston maintains that the fast food wage increase represents an immediate threat to his organization.

“We offer better benefits than fast food employers, but I’m not convinced that will be enough to keep people,” Houston said. “Thousands of people will be affected by this. Our staff members create incredible relationships with clients who are nonverbal and have multiple disabilities. To disrupt those relationships is horrible.”

At the same time that nonprofits face substantial changes in the labor market, organizations also cite an ever-mounting list of regulatory requirements as unfairly shackling the sector. 

The latest so-called unfunded mandate comes in the form of a bill that passed both both the state Senate and the Assembly at the end of this year’s session. The legislation expands on an existing mandate for public-sector employees, requiring nonprofit organizations that receive 50 percent or more of their funding from the state or federal government to institute a workplace violence prevention program.

Buffalo Assemblywoman Crystal Peoples-Stokes, who introduced the bill in the state Assembly, says the legislation was inspired by the realities of modern society, not specific events.

“I think the need for this mandate arises from the days and times that we live in,” Peoples-Stokes said. “People show up to work and take their anger out on others. Unfortunately, our society has become less and less civil.”

However, some nonprofit advocates have expressed concern that lawmakers are flippantly increasing organizations’ regulatory burden.

“It’s not a question of whether workplace violence prevention is good or bad,” said Michael Clark, executive director of the Nonprofit Coordinating Committee of New York, which represents approximately 1,500 member nonprofit organizations in government relations. “If you require an ever-growing list of things for nonprofit employers, then you’re taking time and resources away from mission-related work and placing it in compliance work.”

“There is a great impulse to regulate in the legislative world,” Clark continued. “We’re not anti-regulation. We understand that nonprofits have a role to play that is related to government work, often parallel to government work. What we’re saying is that one should be very careful about introducing new regulatory requirements into a sector that is already highly regulated.”

Peoples-Stokes says she has heard concerns from members of the nonprofit community but does not feel that the legislation represents an unreasonable regulation.

“We have gotten pushback from nonprofits that think it’s unfair,” she said. “There isn’t a requirement for for-profit employers who get the same level of government funding to have a program, and maybe that’s something that we should look at. But what this legislation is asking for is not to reinvent the wheel.”

State Sen. Jack Martins, who introduced the bill in the Senate, agrees with Peoples-Stokes that the requirement is not overly burdensome and is in line with larger policy goals.

“Workplace violence is an important issue, and it is incumbent upon us to encourage those who do business with the state to maintain certain standards,” Martins said.

Martins underscored that templates for workplace violence prevention programs are readily available online, and that many larger nonprofits already have such programs in place.

“I think we need to measure our statements carefully,” Martins said. “To ask someone to adopt a policy for which there exists many templates on the Internet, I think, is not burdensome. Anyone who claims that this is a real burden is simply looking for an excuse.”   

But industry consultants say that while creation of workplace violence prevention programs will not be novel, it will require thousands of organizations to devote time and resources to paperwork and training for their employees.

“Compliance will necessarily include internal and external risk evaluations, which will vary dramatically based on the type of work the organization does,” said Joseph A. Carello, an associate at the law firm Nixon Peabody, whose practice includes compliance matters.

Carello also questioned the motives and timing of the legislation.

“The change in the law was very hastily passed at the end of the legislative session,” Carello said. “There does not seem to be a lot of rationale in the legislative history for this specific expansion of the law. Honestly, this seems like something that could be done, so it was done.”