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« Faded glory | Main | NRA v OLF »

Mar 30, 2007


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Jeffrey Sykes

How might the increase affect local non-profits that employ lots of folks at a minimum wage?


There have been some "natural experiments" regarding the effect of higher local minimum wages on local employment. Most notably, Washington State has the nation's highest state minimum wage (a few municipalities have enacted "living wage" ordinances that provide for higher rates), while neighboring Idaho has no state minimum so the federal minimum applies. As a result, inter-state metro areas like Pullman, WA/Moscow, ID (both university towns and demographically pretty similar) and Spokane, WA/Coeur D'Alene, ID provide a source for empirical investigation.

The evidence seems to indicate that the local economies on the Washington side have done better than their Idaho neighbors, and that potentially mobile jobs have not fled across the state line. This experience, while not definitive, does at least weigh against the common arguments against higher minimum wages.

Jeffrey poses a different, and very important, question. Non-profit employers can't spread the cost of higher wages among their customer base; so an increase probably would have a greater impact on those organizations and their employees. Good fiscal policy (local, state or national) should take account of this, though I can't claim to have any specific ideas. Tax breaks wouldn't really help, since non-profits are already exempt from most taxes. But perhaps there are other ways to offset the added cost.

Jill Williams

I appreciate Duncan's response (and those of Eric and Jeffrey). The Employment Security Commission of NC has already done some of this legwork for us, as I reported here. The way I read that data shows that the majority of people earning less than $9/hour are not working in "footloose" businesses.

Numbers for non-profits don't show up much in this data, as I recall, but, frankly, I find it even more problematic for a non-profit to be paying unreasonably low wages than for a business to be doing so. As a former manager of a non-profit corporation, I will say that if an organization claiming a commitment to improving our community does not place a high value on, at the very least, keeping its own employees out of poverty, then I am not sure that I think it deserves the 501(c)3 status. That said, I don't know of any non-profit orgs who pay a significant number of workers minimum wage. I don't claim to be an expert, though. Jeffrey, if you could share some specifics about non-profits who are employing a significant number of employees at minimum wage, I can probably put some better thought into how to support them through a minimum wage hike.

Jeffrey Sykes

Well, the Goodwill and YMCA come to mind. Sheltered Workshops, any church that pays a housekeeping staff, etc.

I was just wondering how the increased staffing costs might affect their operations and/or fund raising efforts.


One of Jill's points, Jeff, is what kind of church would pay its housekeeping staff poverty wages?

Jeffrey Sykes

I understand her point, and just threw the church in as a catch all example. A church might have one housekeeper, whereas another, larger non-profit may have a dozens of employees at minimum wage.

I'm all for a living wage. I just wonder if the impact on non-profits has been considered, especially in GSO where you have lots of community groups and action committees.


I didn't mean to dismiss your questions about non-profits. That's a good question. I think getting the opinions of executives from non-profits that employee the hard-to-employ would be beneficial.

Jill Williams

Good questions and good examples, Jeffrey.

As a member of the YMCA, I've seen my monthly bill climb without any kind of a minimum wage hike, so I imagine a Y could absorb costs in that way. (And I may have begrudgingly to reconsider my membership if I find out that the Y is employing significant numbers of minimum wage employees.)

I don't know much about sheltered workshops, but I think Goodwill Industries would fall into that category. Are they sheltered in terms of not having to abide by minimum wage laws? If so, then I imagine that they would not be affected by the minimum wage hike (or would only be affected to the extent that their wages are linked to a minimum wage).

I agree that it would be a good idea to get the thoughts from non-profit administrators. If you all get any responses, I'm happy to post them on the minimum wage blog. (

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