A movement to increase the minimum wage to $15 per hour is sweeping the country. Cities, such as Seattle and San Francisco, have voted in favor of the increase. Los Angeles has now followed suit.
During the decision-making process, local jurisdictions have struggled to balance the need to raise their lowest paid workforce’s economic status with the desire to protect small businesses (who depend on that very worker being paid minimum wage).
Raising wages certainly makes sense, especially when the cost of living is skyrocketing. Take Los Angeles, for example. A worker needs to earn $33 per hour to rent an average apartment in Los Angeles County. Los Angeles plans to raise its minimum wage to $15 per hour by 2020. If that wage level were implemented in 2015, the average household would need more than two employed persons in order to afford a typical apartment.
I wonder what apartment rates will be in 2020? Will a Los Angeles household need three or four wage earners to afford an apartment?
Of course, many business leaders think the economic market should dictate wages, not the government. Unfortunately, during this recent economic recovery in America, the income of the wealthy has increased far more than those on the lower end of the economic spectrum. When the top 20% of American households own 84% of this country’s wealth, there is certainly a problem.
In other words, a “free” market favors the wealthy.
With strong ties to the labor movement, Los Angeles’ recent move to adopt increased wages is not a surprise. An amendment to this city’s wage ordinance, however, brought a different twist. Several nonprofit agencies, which help the city’s unemployed and impoverished population access low-end wage employment opportunities, pushed back. They contended that a minimum wage increase would reduce the number of people they could assist.
The amendment provided these agencies with an exemption. It was a win that could help a greater number of people access work. It was also at the expense of ensuring that people have enough earning power to access housing.
Most nonprofit organizations operate like small businesses and will struggle with the mandate to raise employee wages. But agencies with a mission to address poverty and homelessness should not compromise their mission by keeping their staff wages low.
It is ludicrous to think that agencies battling poverty would reinforce a “working poor” status within their own employee ranks.
Even larger nonprofit agencies will struggle to meet this new wage standard. In the agency I lead, we calculated that we would need to raise an additional $140,000 per year, if we were to raise the wage this year.
But if we are to stay true to our mission of ending poverty and homelessness for individuals and families, we simply cannot endorse a working poor salary. So, we have decided to raise our lowest salaried workers to $15 per hour within two years—this year starting at $13.25 per hour (Los Angeles is mandating a five-year timeframe).
This commitment, to paying people a wage that will keep them housed, places greater pressure on our agency to raise more funds. But we have to do this.
Because antipoverty agencies should not pay poverty wages.