Maybe raising the minimum wage doesn’t always help the poor.
A proposal to raise Seattle’s minimum wage to $15 an hour would force many nonprofit organizations to either shut their doors or limit their services to the disabled and needy, according to a preliminary study conducted by the Seattle Human Services Coalition (SHSC).
SHSC, which actually supports increasing the minimum wage, surveyed 29 different nonprofits within Seattle to determine these findings.
The authors of the study concluded that, “Since nonprofits generally do not have the option of covering an increase in wages by ‘raising their prices or decreasing profits,’ resources would either have to be added to the agency or be shifted within the agency in order to raise wages.”
They noted that the extreme wage hikes would adversely impact Seattle’s most downtrodden residents.
“Without additional resources added, often the only option would be to decrease or cut services, meaning the impacts would be felt first by the most vulnerable members of the Seattle communities: the people who need these services,” read the study.
According to the report, the wage bump would cost the small sample of 29 organizations over $10.9 million and would impact 2,546 employees. Considering the large number of nonprofits in Seattle, if the legislation is enacted, the impact on funds and on employment would be far greater.
For some nonprofits, the monetary burdens could exceed six-figures.
“One organization that provides critical mental health, shelter, day, and hygiene services as well as meals for hundreds of people in Seattle estimated a cost of $1,000,000 annually to bring all employees up to a $15 per hour minimum wage and maintain current services,” noted the study.
These additional costs would be insurmountable for many of the organizations. Out of the 29 organizations polled, 21 reported that without cost offset funds they would be forced to reduce services or close their doors.
The study found that shelter beds for the homeless, meal service for the formerly homeless and housing for the disabled could in some cases be eliminated. Head Start availability would be decreased, eliminating at least one classroom serving 20 children. Food banks would be closed one or more days per week, with some possibly closing entirely.
The City of SeaTac, Washington has already raised the minimum wage to $15 an hour. A Socialist city council member is now campaigning to raise Seattle’s mandated minimum from the state standard of $9.35 to $15 per hour.
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