CPI Headaches and Challenges

Economics Financial Justice

 Pearl River     For years our nonprofits have had a policy that automatically affixes the annual increase in the Department of Labor’s Consumer Price Index (CPI) to our salary scale.  In some years, in all honesty, the policy is more aspirational that achievable.  There’s a simple explanation:  not enough money coming in the front door to roll over to the pay window.   In recent years, when the CPI increase has been relatively minimal, it hasn’t been a problem.  This year is different.  The DOL says the CPI from November 2020 to November 2021 is 6.8%.  That’s a wallop!

            Let’s look at the math for a minute.  We don’t pay less than $15 per hour of course.  Full-time work is 2080 hours per year, so that’s an annual salary of $31,200.  Not great, but not terrible.  A 6.8% cost of living increase adds $2121.60 for that worker, making the annual salary $33,321.60, so that on an hourly basis they would be making a bit over $16 per hour at a minimum, in fact $16.02 per hour.  The fight for $15, really should be the fight for $16 at least, and on up from there.

            “At least” is a fairly low bar, as we know in the so-called Great Resignation.   Talking to an Amazonians United organizer/activist the other day, average wages there are between $18 and $21 per hour depending on the algorithm, which no one understands.  That’s not all, she told me a story about one place where Amazon was paying their wages and Target had a warehouse in the same small town.  Target bumped pay up to $25 an hour to staff its facility and 70% of the Amazon workers decamped from their warehouse to work for Target, while Amazon stuck to its algorithm.  I told her this had to be the first time I had ever actually felt sorry for an Amazon plant manager, who was watching his workers walk away and powerless in all likelihood to convince Seattle to let him do anything about it.  I’m betting it was a “him.”

            Nonprofits aren’t multi-billion-dollar outfits.  Dues don’t automatically increase by 6.8%.  Donors, foundations, churches and others don’t send you an email saying, hey, we follow the CPI, here’s another pop so that you can stay even and still deliver on all of the goals and objectives in your grant agreement.  Dream on!

            There used be a slogan, sadly, I think it was from the Goldwater campaign, about “a choice, not an echo,” but this spurt of inflation pretty much eliminates choice from any manager of a nonprofit, if they want to both be fair to their workers and fill their staff needs.  We all are going to have echo, as best we can, the rising price for their labor to at least keep them whole.   In our living wage campaigns we used to say that with a minimum wage increase, “all boats rise.”  Well, the boats are rising, so we need to do our best to stay afloat now and keep sailing!