CalNonprofits Articles

The Los Angeles City Council has voted 14-1 to increase the city’s minimum wage to $15 an hour by 2020 for businesses with 26 or more employees. The first boost will occur in July 2016, when wages will be increased from $9 to $10.50 an hour. 

Usually minimum wage debates only include businesses and labor. But this time, we're glad to say that nonprofits were at the negotiating table as well. 

CalNonprofits Policy Director Nancy Berlin convened Los Angeles nonprofit leaders to discuss minimum wage proposals, represented the nonprofit community in meetings with Los Angeles City Mayor Eric Garcetti, City Council members and labor, and testified before the City Council.

Through a survey of nonprofits conducted last November, we found that our members not only support increased minimum wages but are eager to work with city and state officials on both legislation and implementation.

The survey also identified the need for longer phase-in schedules for nonprofits to provide time to re-negotiate government contracts to the new wage levels, and allow nonprofits to maintain delivery of critical human services.  The Los Angeles City Council heard these concerns and included policies in this new ordinance to address them.

Nonprofits and small businesses with 25 or fewer employees will have an additional year to phase in increases to the minimum wage, with the first increase scheduled for July 2017. Also, a complicated set of last-minute amendments will allow nonprofits with greater than 25 employees to apply for a waiver if their top executive earns less than five times the wage of the lowest-paid worker; or provide transitional jobs programs; or serve as child care providers; or are primarily funded by City, County, State, or Federal grants or reimbursements.

CalNonprofits remains troubled that the plan creates a confusing web of rules, and reinforces wage disparities in traditionally low-wage sectors such as child care, while targeting the salaries of nonprofit executives as a legitimate or accurate means of evaluating a nonprofit.

Nevertheless, while this plan creates a more clouded policy than CalNonprofits had put forth, overall it will provide accommodation for more than 90% of Los Angeles’s nonprofits. As noted in CalNonprofits’ seminal report issued last fall, Causes Count: The Economic Power of California's Nonprofit Sector, nonprofit organizations are a large and vital part of California’s economy, employing nearly one million people in California, accounting for six percent of total state employment. Furthermore, our survey on the minimum wage showed that 77% of those with an opinion support increases in the minimum wage, as expressed by one respondent who stated, "increasing the minimum wage can reduce the poverty rate and help poor people do better for themselves."

For more information please contact our Policy Director Nancy Berlin.

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