Higher minimum wage creating “crisis” for social service agencies

Feb 25, 2016

On Monday the House Appropriations Committee heard testimony on HB 2376, the supplemental operating budget.  Dozens of citizens, agency officials and non-profit leaders advocating on behalf of human service and education providers showed up to express their support for, or displeasure with, the various programs funded by the bill.

A common refrain heard throughout the hearing was the need for additional funding to account for the higher minimum wage in Seattle and Tacoma.

Representatives for agencies providing assisted living for the elderly and developmentally disabled, as well as early learning programs, testified on the “crisis” of being forced to pay workers the increased minimum wages in Seattle and Tacoma with no corresponding increase in funding from the legislature.  As they pointed out, they have no way to comply with the higher wage requirements; they get all their funding from the state legislature.

This should come as no surprise.  When the Seattle $15 minimum wage was being debated, nonprofits warned the higher wages would squeeze their already tight budgets.  The Executive Director of the Downtown Emergency Service Center (DESC) in Seattle explained that unless the funding for his nonprofit was increased to account for paying a higher minimum wage, he would be forced to reduce the services DESC provides to the mentally ill homeless population.

The executive director of The Arc of King County similarly explained the difficulties of paying a higher minimum wage for nonprofits that rely on government funding, pointing out simply raising prices to offset the higher wage is not an option.

Increasing the minimum wage may seem like an easy way to help low-wage workers, but as with any government-mandated policy, there are unintended consequences.  In this case, the vital services that the most vulnerable members of our society rely on are jeopardized as agencies and nonprofits are faced with making tough decisions in order to comply with the new wage laws in Seattle and Tacoma. 

Sign up for the WPC Newsletter