Nonprofit Wage Squeeze

Economics Financial Justice Ideas and Issues


 New Orleans     When you’re hearing and reading that nonprofit organizations are no longer just fighting to compete for workers with profit companies because of wage differentials for similar work, but are now saying that they are competing with fast food and retail companies who are offering more money, you know there’s a real crisis in the sector.   Many nonprofits, having struggled to pay $15 per hour or a bit better, and most of our organizations are solidly in that number, are seeing Walmart, Amazon, and the McDonalds down the street paying $16, $18, and $20 per hour for workers.  Love has trouble contending with money for new hires, especially when inflation in general costs and housing is wreaking havoc with local economies.

            Bargaining has been in full force with Local 100’s Head Start contracts, and our workers did better in both Houston and Shreveport thanks to some pandemic bumps from federal stimulus payments from Congress.  On the other hand, where reimbursement rates are unable to keep up, we are bound to be heading for some collisions with our nursing home and community home assisted living contracts as they renew in 2022, and are dependent on state legislative budgeting and adjustments as well.  Meanwhile, they are also facing vaccine mandates and pandemic-era resignations and exhaustion, further depleting the staff counts.

            A colleague can’t get back surgery in Ohio because a combination of staff shortages and virus concerns have canceled elective procedures once again, even though the Omicron variant is not driving excessive hospitalization rates in most communities.  When traveling nurses can easily make more than $100,000 a year on the road, it’s hard to keep them at home for $50,000, even though that’s what most of us would think is a good job with fair wages.  The lead story in the New Orleans paper today claimed that business leaders more than sixteen years after Hurricane Katrina were finally realizing that the city faced an “existential crisis” with falling population if they continued to depend on a low-wage tourist industry coupled with rising rents and unaffordable housing.  For them, it did take a weatherman, or at least the pandemic, to finally figure out which way the wind was blowing.

            Recently, I wrote a huge organizing proposal for a project that was a combination of organizing, climate change, and political reform and set the starting wage at the equivalent of $20 per hour for organizers, thinking I was going way past what I would need.  Universally, the comments from early readers scolded me for going too low on the pay.  Maybe they’re right, but how would we – or any nonprofit – be sustainable at that level, much less, higher?

You can’t just jack up dues easily.  There’s only so much anyone is going to pay for a cup of coffee.  No outside funding lasts forever, so you can’t base pay and expenses on grants alone.  I’ve noticed some longtime sustainers for our radio stations, even at $5 per month, have suddenly discontinued in the last couple of months as inflation has increased.  For me, they are canaries in our coal mine.  Nonprofits, like ours, have some financial challenges that simply commitment and hard work, won’t be enough to fix, and there’s no calvary coming to rescue us.