As minimum wage rates rise across many cities and states, there is a renewed discussion around how such laws affect workers and businesses. Less often discussed, however, is the impact of such laws on nonprofit organizations — in particular organizations that employ low-wage workers to provide care or services to the most vulnerable residents in our community. The latest report from the Minimum Wage Study at the University of Washington, examines initial nonprofit responses to the local move to $15 an hour.
The national poverty report produced by the Census Bureau in September showed the poverty rate to have fallen from 14.8% to 13.5% between 2014 and 2015. This was much welcomed news after more than a decade of very little improved economic opportunity for those at the lower end of the wage and income distribution.
While most attention at the time was paid to the drop in the poverty rate, the report’s appendices indicate the number of poor persons in the U.S. fell by more than 3.5 million from 2014 to 2015. Recent progress on poverty should bolster support for the safety net and encourage us to do more.
As the income inequality discussion continues to simmer across the country, municipal minimum wage ordinances have become hot topics of conversation in many cities. In January 2016, Seattle will implement its second step-up in the local minimum wage in 9 months, reaching $13 for many employers in the city and edging closer to a $15 an hour minimum that will apply to most firms by 2019. San Francisco will reach a $15 an hour minimum by July 2018. Yet cities as diverse as Birmingham, Chicago, Los Angeles, and Louisville have enacted or proposed similar minimum wage laws. It is too early to discern true impact of these local wage ordinances, but speculation abounds regarding whether or how the higher wage will affect firms and the earnings of low-wage workers.