Mayor de Blasio Can Make Lasting Change with Nonprofit Living Wages and Career Opportunities

Tuesday, December 16, 2014
by Jennifer Jones-Austin, CEO/Executive Director, Federation of Protestant Welfare Agencies and James Parrott, Deputy Director and Chief Economist, Fiscal Policy Institute
In recent years, there have been increased conversations at both the City and State level to address growing wage inequality through the provision of a living wage. However, one important segment of the workforce historically has been left out of these conversations-- nonprofit employees. The City of New York annually contracts out $5 billion in social services to nonprofit organizations that employ over 125,000 workers. These employees provide a variety of vital services that keep our City running smoothly-- everything from early childhood education, senior care, and case management, to after school programming and supportive housing for vulnerable populations.
Unfortunately, data show that a majority of front-line social service sector employees are underpaid and without real opportunities for career advancement. An estimated 52 percent of these employees, the great majority of whom are women of color, earn less than $14 per hour, and 40 percent make less than $12 per hour. Over a third of such workers have poverty or near-poverty living standards, placing them all-too-close to the situation of the client populations they serve and forcing many to rely on safety net programs in order to make ends meet. Many of these employees tell stories of having to apply for food or housing assistance programs, often offered by their own organizations, in order to provide for their families.
The inadequate funding of City of New York social services contracts is the primary cause of low nonprofit social service sector wages. In addition, the City traditionally has not provided adequate financial support for professional development investments that lead to real career ladder opportunities in the social services sector. Career pathways are not adequately defined, and there is limited financial support available to those workers who seek to advance themselves from entry-level positions into middle- and higher-tier, better paying positions. In the few places where there are career ladders, barriers, such as lack of access to quality child care, often impede workers in their pursuit of opportunities. 
To redress this situation the City should help put in place a sector-wide professional development system to give real career opportunities for lower-paid social service workers, and establish a meaningful wage base that recognizes the value of work performed on behalf of the City. Professional development should be responsive to the needs of both the worker and the organization, and must reflect the diversity of services nonprofits provide. These workers make far less than City employees, and while no one is proposing parity, the gap should be narrowed. After all, the City has a responsibility as the indirect employer. The City helps determine wage standards for other indirect employees like school bus drivers and matrons, and school cleaners. Moreover, under Mayor de Blasio the City is taking a renewed interest in supporting investments in workforce training for City employees geared to expand career advancement opportunities.  
Given the magnitude of City social services contracting, the cost of raising wages and providing career ladder supports for lower-paid workers in our sector is not trivial. We are working with the City and the sector to develop sound estimates of the cost. We believe it is a manageable investment that will yield returns in several areas. Better trained and more motivated workers will enhance the quality of service delivery, and this will make a big difference in helping low-income and disadvantaged clients get back on their feet. Since this workforce resides in the lowest-income neighborhoods, improving their pay will improve their communities. 
There’s no doubt that City funding for social services and the safety net declined since the onset of the recession. The de Blasio administration has taken some big strides increasing investments in UPK and afterschool. It provided more funds for NYCHA and base-lined funding for several social service programs. It tackles problems in a strategic and targeted manner. But it’s not likely to just increase social services funding without a clear agenda with measurable results.
The new 2014 edition of the Self-Sufficiency report underscores the importance of this proposal—83% of households below sufficiency have one or more workers, and women of color are disproportionately affected. The Social Services Career Ladder Project is laser-focused on this problem, and it bridges two top priorities of the de Blasio administration—raising wages for underpaid workers and boosting career ladder opportunities that help provide a path into the middle class. This goes to the heart of the Mayor’s signature agenda, reducing inequality and expanding opportunities.
While we look to the de Blasio administration to take lasting action on this issue, the philanthropic community can play a critical role in advancing living wage and career ladder opportunities in the nonprofit sector. The philanthropic community has long been a strong voice in promoting the value of the nonprofit sector and it is with your continued dedication and financial support that many nonprofit organizations have the ability to provide the vital services that keep our city running. We hope the Career Ladder Project begins conversations within the philanthropic community about how foundations can use their financial power to promote living wage and career ladder initiatives in the organizations they support and on which our city so heavily relies.