How nonprofit workers get squeezed when minimum wages increase

BY Paul Tipps and Jesse Inman  April 25, 2014 at 5:57 PM EDT
Nonprofit workers don't want to be left out of the fight for higher wages, but also realize that higher wages could come at the expense of some of their jobs and the services they provide. Above protesters in Wisconsin demonstrate for a higher minimum wage. Photo by Flickr user Wisconsin Jobs Now

Nonprofit workers like those at Seattle’s Downtown Emergency Service Center don’t want to be left out of the fight for a higher minimum wage but also realize that higher wages could come at the expense of some of their jobs and the services they provide. Above protesters in Wisconsin demonstrate for a higher minimum wage. Photo by Flickr user Wisconsin Jobs Now.

Editor’s Note: Not everyone who supports raising the minimum wage is in a position to pay their employees more. Nowhere is that more true than in the nonprofit sector.

As the executive director of the Downtown Emergency Service Center in Seattle, Bill Hobson employs 521 people who help Seattle’s mentally ill homeless population. In Paul Solman’s interview with him, Hobson explains that unless the tax structure is reconfigured to underwrite minimum wage increases at nonprofits, paying a third of his workers a higher minimum wage will ultimately lead to a reduction in the services DESC is able to provide.

But as it stands now, many of the agency’s entry-level staff qualify for the same benefits as the homeless people they’re serving. Here Paul speaks with two of Hobson’s employees about the struggles of working for a nonprofit that pays so little that neither of them can afford to live in the city in which they work.

Paul Tipps is a supervisor at the Downtown Emergency Service Center’s homeless shelter. The residential counselors he supervises make $12 an hour, and he pulls in about $14. It’s tough to make ends meet on that salary, he says. But “I had no delusions of being wealthy doing this kind of work. It’s worth it for the people.”

Jesse Inman shares that sentiment. He’s a counselor at the shelter, and after working there a year and a half, he earns $12.30 an hour. Inman estimates he and his wife pull in around $30,000 a year — just enough to afford a basement studio south of the city.

Paul Solman’s extended conversations with both men, edited and condensed for clarity, appear below.

Simone Pathe, Making Sen$e Editor


Paul Solman: So what’s your position on a $15 dollar an hour minimum?

Paul Tipps: It is vital. I think that a lot of the people that I supervise unfortunately qualify for a lot of the benefits that the people that we help receive. The entry level people in this agency essentially qualify for food stamps, which is a huge disparity. Human services work in general is one of the most underpaid workforces in the country. I don’t pretend to know all the reasons for that, but I think that it’s become less and less part of the political landscape just because there’s so many other really pressing issues to focus on with the various financial crises that we faced.

The $15 an hour minimum wage is something that needs to happen, but part of that conversation has got to be that if we’re going to do this, then we need to find a way to increase the funding for human services agencies because unlike a business, we don’t have the option of raising our prices; we don’t have prices. We don’t have the option of doing anything but cutting services and this city would definitely suffer.

Paul Solman: Is the Downtown Emergency Service Center going to have to lay people off if the minimum wage is raised to $15 an hour?

Paul Tipps: That’s a great question, I don’t know. The agency would have to cut somewhere. I can’t imagine what the building would look like without the bare minimum of staffing. I would hope that the mayor and the people that are ultimately going to vote on this and make this decision would keep us in mind. They know the work we do is important, but the process of getting any sort of increase in revenue, which would be necessary to come up with the money to pay our employees if this increase happened, is a labyrinth at best.

Paul Solman: What do you suppose would happen if you had to eliminate one of the two people who are on duty 24 hours a day?

Paul Tipps: The work we do is largely crisis intervention. And the reason why we have two people on staff all the time is so that that they can make sure each other is safe. Say a client is experiencing withdrawal symptoms from a substance and are consequently having mental health symptoms. They need mental health professionals to come and respond and help them or detain them depending on the situation. One person on staff calls emergency services while the other one tries to deescalate the situation. If there’s only one staff member, they have to make that phone call, they have to make sure that the other residents in the building are safe, they need to try and control the environment as much as possible in order to keep everyone safe and keep themselves safe. If there are not two people on staff, I don’t see how anybody could really guarantee the safety of my employees.


Jesse Inman is one of the counselors at the shelter.

Paul Solman: How do you live anywhere near Seattle at $12.30 an hour?

Jesse Inman: I’m lucky to have a really good relationship with a good landlord that hasn’t taken advantage of what’s been happening in the city. Me and my wife have been rent hopping in the city for a while, moving further and further south in order to just to stay in the city. If I want to start a family with my wife, then that becomes unrealistic. If I want to live in a place where my puppy can get a decent yard to run in, that becomes unrealistic. That’s true of a lot of people in my generation. Those of us who are lucky enough to work two full-time jobs, we can stay where we’re at right now, but any level of social mobility, any medical crisis is going to push us over the edge.

Paul Solman: How do you respond to skeptics of the minimum wage increase who say, “Hey look, for all the problems that the American working class has now, nobody’s starving, nobody’s freezing, and Americans are better off than most people have been in the entire history of the world”?

Jesse Inman: Well we’re not better off in economic opportunity than my parent’s generation was or the generation before us was. Wages have not kept up with productivity the way that they had in the past. Social mobility has not kept up. If we’re talking a generation or two ago, two people working full-time at a union job wouldn’t be living in a basement studio apartment.

Other generations did better not by hoping for it, but by working together and organizing for better working conditions and better wages. That is what made the baby boomers so successful. So I think the standard that we’re not starving is a pretty low bar to set.

I’ve spent my whole life in this city, but it’s increasingly becoming a place where only the more affluent can live. That’s not what I want to see happen to my city. I want this to be a city where working class people — the people who make the city work — can afford to live. That doesn’t seem too much to ask.