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April 25, 2014 at 11:52 AM

Would a $15 minimum wage be a disaster for Seattle’s human services?

Seattle Mayor Ed Murray assembled the press corps Thursday to unveil his plan to raise the minimum wage – and then didn’t. He instead stalled, giving his appointed minimum wage advisory committee more time to fill out what sounded like the skeleton of a deal to raise the wage floor to $15 an hour. The state’s current minimum is $9.32 an hour.

One of the points of agreement is that nonprofits would not be exempt from paying the higher minimum wage. “No exemptions,” he said. How quickly the nonprofits get there is still being negotiated, but it’s clear Murray’s proposal will make them get there.

Bill Hobson, of DESC (Bettina Hansen / Seattle Times)

Bill Hobson, of DESC (Bettina Hansen / Seattle Times)

That’s a big deal, because human services pay an “abysmal” wage, says the elder statesman of Seattle’s human-services community, Bill Hobson. The Seattle nonprofit he runs, Downtown Emergency Services Center, pays poorly enough that a $15 minimum wage would require a $1.2 million or $1.3 million bump in his $32 million annual budget.

Reporting a column in the Seattle Times about serious financial problems in the nonprofit chemical dependency treatment community, I asked nonprofit leaders about a $15 wage. Universally, the answer was a collective groan. Pat Knox, CEO of Recovery Centers of King County, said:

“I can’t even image how we’d weather that. Even having it coming in slowly would be a disaster.”

That doesn’t reflect a lack of empathy for people who make wages, just the financial reality of holding together the human services safety net.

Inpatient drug treatment providers usually pay $10 or less to “attendant” line staff, who often are in very early-stage recovery themselves and lack a resume. Intern treatment counselors, usually fresh out of college, start at about $13 an hour. The U.S. Bureau of Labor Statistics includes psychiatric attendants, orderlies and home care aides among professions making less than $25,000 a year.

Paying college-educated professionals poverty wages to do a vital civic duty is – as Hobson says – abysmal. Asked during a recent Seattle Channel debate about phasing in a wage increase for nonprofits (while requiring a quicker increase for large businesses), Hobson said, “It would be easier for us to manage the increase, but I’m troubled by the message it sends that somehow human services workers are less socially important than servers in national fast food restaurants.”

But paying more for human services isn’t as simple as raising the price of a Big Mac. Most nonprofits lean heavily on federal and state funds; 97 percent of Hobson’s budget is government contracts. What’s the likelihood that Congress, or the state Legislature, is going to bump up those contracts to account for a minimum wage in Seattle that would be higher than every other city in the country?

The other main income source for nonprofits is from donations. Smart nonprofits already tap this source as hard as they can. Are they expected to find a magical new philanthropic fountain to pay $15?

When I asked Nick Hanauer, the Seattle venture capitalist backing a $15 wage, about Knox’s concern, he nodded. “It’s a problem,” he said. And the solution? He suggests a long-term phase-in, which apparently would give nonprofits time to lobby for higher public contracts.

But the real answer left me cold. A $15 wage, Hanauer suggested, will eventually reduce demand – for addiction treatment, for mental-health counseling, for domestic-violence intervention, for homeless outreach. “Eventually social services will recalibrate to a smaller human services problem,” he said.

That is, at best, utopian thinking. At worst, it’s a fantastical theory that will put a vise on already struggling human services. Chemical dependency facilities are already closing under financial distress. A $15 wage, Knox said, “would eliminate a large part of the workforce.”



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