Motivations, Barriers, and Strategies: Perceptions of Human Service Organizations to Proposals to Raise the Minimum Wage

Background and Purpose: There is growing attention to increasing federal minimum wage to $15 an hour. Many cities, counties, and states have raised or are in the process of raising their minimum wage. A growing body of evidence has shown that efforts to raise minimum wage are linked to positive effects for employee wellbeing, with little to no effects on employment. Yet, there is concern that raising wages will hurt certain employers and groups of workers. In particular, there is concern that raising minimum wage will hurt non-profit Human Service Organizations (HSOs). Little research exists on this issue, and as states and local communities increasingly pass minimum wage increases, it is important to understand the potential effects wage increases will have on HSOs, their employees, and the people they serve. This study utilized in-depth interviews of 25 HSO leaders of various budget sizes to gain an understanding of their perceptions of increasing minimum wage and their organization’s capacity to respond to a higher minimum wage.

Methods: This descriptive study utilized in-depth interviews with 25 Human Service Organization leaders with annual budgets ranging from $165,000-$55,000,000 in Western Pennsylvania. Interviews were inductively coded and analyzed using NVivo.

Results: Three key themes emerged from these interviews: (1) HSO leaders want to raise wages and are generally supportive of these efforts; (2) HSO leaders, however, face numerous barriers to raising wages; and (3) HSO leaders are utilizing a range of strategies to raise wages but broader reforms will be necessary. HSO leaders cited several motivations for raising the minimum wage including recruitment and retention of staff and paying staff a living wage. HSO leaders reflected substantial discomfort with the fact that many of their employees did not make enough to make ends meet. Several raised the point that wage levels of many workers would make them eligible for the very programs and services they deliver. The moral imperative to pay HSO workers a fair living wage was consistently mentioned. Across all budget levels, HSO leader noted challenges that an increase in the minimum wage would cause the organization. Barriers to raising wages include budget constraints, limits of government funding, restrictions of donor funds, reductions in service delivery, the benefits cliff, and the reality of layoffs and/or benefits cuts. The strategies organizations would utilize to increase wages included: diversifying funding, financial planning, and organizational discourse. Without sufficient funding to carry out their missions, HSO leaders have to engage in strategic management to ensure the sustainability and growth of their organizations. While making internal changes, HSO’s are also engaging in external discourse to bring awareness and initiate action that will allow them to pay fair wages and fulfill their mission.

Conclusions and Implications: HSO/ nonprofit sectors promote advocacy, equality, justice, but are not upholding its mission and values internally. HSO’s should evaluate how they are adhering to their mission with their employees. Overall, they should consider whether their employees are making a living wage, have good working conditions, and ensure they are included in decision making.