Many businesses upset by the new minimum wage hike have a standard warning: We’ll have to raise prices to make it work. But that’s not an option for most San Diego nonprofits.
They’ll either need to pull in more cash, or cut back.
Few San Diego nonprofits have spoken publicly about what the escalation to a $15 statewide minimum wage might mean for them. Some are backing both the state increase and the local one on the June ballot.
But some nonprofit leaders are openly grappling with what those increases mean for their workers and the people they serve.
The increases can put nonprofits in an awkward position: Many nonprofits support wage hikes because they help the populations they serve but the increases can create challenges for the nonprofits themselves.
Debbie Case, CEO of Meals-on-Wheels Greater San Diego, confesses her nonprofit – which has more than doubled the number of meals it annually served seniors in the past six years – may need to start wait-listing new clients.
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Interestingly, 94% of Congressional members do not pay their staff interns the minimum wage. Several years ago a Minimum Wage advocacy group was sued in San Diego for not paying its workers the minimum wage. The organization's leadership said it could not afford to pay the minimum wage. Of course if today's advocates were serious they would be lobbying for $100 an hour minimum wage. http://www.usatoday.com/story/news/politics/2015/07/03/members-of-congress-push-minimum-wage-hike-but-dont-pay-interns/29624615/
@Fred Schnaubelt "Of course if today's advocates were serious they would be lobbying for $100 an hour minimum wage"
A truly ridiculous argument. On that logic, since reduction of taxes leads to further economic activity, the government should eliminate all taxes, right? In fact, maximizing government revenue is about finding a balance between zero and 100% taxation, just as maximizing economic activity is about finding the right balance between business regulation (like a minimum wage) and pure capitalism.
Lisa, I want to thank you for presenting this dilemma the way you have, using a non-profit rather than one of those evil, money grabbing corporations.It demonstrates that the problems are real, and about the same whatever industry you examine:Where does the money come from, and how do you handle those now making above minimum wage? In most organizations that’s the vast majority of employees.
Note the photo above -- the typical stock photo that accompanies any article about the minimum wage.
These noisy protesters are too often labeled as "striking fast food workers" by the gullible and conniving press. It's what the sign says in the photo.
But the fact is that only a handful are actual fast food workers -- let alone STRIKING fast food workers. Most are SEIU employees (some paid to protest) who work in OTHER industries.
Toss in some college brainwashed Millennials, and then sprinkle the crowd with aged 60's hippies who still think that their Worker's Paradise is just one edict from realization.
The press never goes out into the crowd to discover this fact, let alone report it. Including VOSD.
@Richard Rider Who cares who is in the crowd of demonstrators. Does that make their position any less valid? The fact is that the real wages of low wage workers has declined over the years, despite the significant rise in GDP. Not all boats rise with the tide. Some sink.
Mr. Rider: So to clarify, it's a "fact" that the people in this crowd photo are a handful of fast food workers, SEIU employees, some paid to protest, college brainwashed millennials, and aged 60' hippies? I have got to hand it to you. Carnac the Magnificent could not have done better. https://www.youtube.com/watch?v=xuFSWcNe8hY
@Chris Brewster Funny, but you present no refutation. One need only read the news stories of the rallies. Look at the photos.
The organizers, if credited by the press, are labor union operatives. The protesters' T-shirts don't magically appear on everyone's chests.
But you have a point. The press simply doesn't report who is attending these rallies. Usually there are a few fast food workers who DO attend, and they are highlighted, with lots of press coverage. But most of the "strikers" remain anonymous, thanks in large part to both a lazy and sympathetic press corps.
As balanced commentators have noted, the impacts of the minimum wage increase are impossible to know for certain until (and really many years after) they become a reality. They may benefit the economy or they may hurt the economy. They may increase jobs or they may reduce jobs. No one knows for sure. What we do know for certain is that the minimum wage has steadily eroded, relative to inflation, for decades. Alan Gin of UC San Diego recently stated that if the 1968 minimum wage of $1.65 had kept pace with San Diego’s inflation rate, it would now be about $14. That is now, today. Presumably, by the time it actually gets to $15 in several years, it will be just about the same as that 1968 minimum wage.
At a time when those at the top of the income pile have become ever richer and poverty is a serious problem in California, ensuring that the wages of those at the bottom of the pile keep up with inflation does not seem to me like something we should regret. Certainly there are the predictions that this will hurt low wage workers, but it’s interesting that most of those arguments seem to be coming from people who are not making minimum wage. The seeming empathy thus appears to me to be more of a debating tactic.
Business owners and nonprofits that choose to compensate some of their employees at minimum wage have benefitted by the erosion of the minimum wage. Under the new system, that won’t happen anymore.
@Chris Brewster As per the union playbook, Brewster cites the 1968 minimum wage, and uses that year ALONE to claim that the minimum wage has not kept pace with inflation. But 1968 was a unique "outier" year. A review of all the OTHER years' minimum wage levels and adjusting for inflation shows that, with some variation, minimum wage has grown as fast or FASTER than inflation, even BEFORE the $15 minimum wage became a reality (in some jurisdictions).
Here's the chart -- copied from the U.S. Department of Labor
Mr. Rider: Actually I cited Alan Gin.http://www.sandiegouniontribune.com/news/2016/apr/02/minimum-wage-far-reaching/
@Chris Brewster NEWS FLASH: College professors can exhibit bias! Professor Gin is THE "go to" local professor for the progressive movement (and liberal media). In a world of overwhelmingly liberal professors, HE'S the most popular source for Democrats in San Diego.
I'm sure you're simply STUNNED to discover that.
@Richard Rider @Chris Brewster We're going to argue over lies, damn lies, and statistics? Or how the federal agency calculates inflation and whether that really is a good measure of buying power of the minimum wage? Or whether cost of living in San Diego should be measured when compared to cheaper parts of the country?
Chris started off by saying the impact is impossible to know. That's a true statement. The experiences in other areas that have increased the minimum wage have shown that it is possible to get more money to the lowest class of citizens without ruining local economies. That's also a true statement.
Finding the balance is a policy issue, and an economic theory issue, which largely gets decided by people smarter than us, with slightly more education than Adam Smith's invisible hand.
Mr. Rider: Please. In my original post I referred to Mr. Gin as the source. In your reply you stated, "per the union playbook Brewster cites the 1968 minimum wage ..." In my reply I pointed out I was not using a union playbook, but citing a well respected UC professor. Of course college professors can exhibit bias, as can you and me. If you look more carefully at my original post I state that the ultimate impacts of this increase to the minimum wage are unknown. Hardly an extreme point of view. Lighten up.
@Chris Brewster Alan Gin WRITES the "union playbook"! Figuratively speaking, if not literally.
Last I researched, minimum wage was based initially on 1/3rd of salary going towards housing. If current housing costs for a 1 bedroom apt are $800 per month. then one would need to make $2400 per month or $15 per hour.
It's not just the nonprofits that face a daunting problem. Fast food robots have been little more than conjecture and curiosities up until this past year. But the key to boosting this robot industry is to boost the minimum wage.
Now that political sentiment seems widespread for pretty much a national $15 and up minimum wage, it seems inevitable that this bootstrap automation industry will quickly evolve into big-time business, with some major manufacturing corporations rushing into the development stage -- and from there the scramble for factory production will be quite a spectacle.
Moreover, the price of these robots will rapidly tumble because of the economy of scale that such mass production provides, the vendor competition and the burgeoning demand. Check out this video:
Fortunately none if this automation will materially reduce the number of minimum age jobs. Ask any Progressive, and you'll see I'm right (pun intended).
I donate annually to a number of nonprofits across the nation -- including several CA state and local outfits. Looks like I'll be wise to reassess my gifts to CA nonprofits, as they will be delivering less "bang for the buck" than nonprofits in other states.
Fortunately for our Golden State nonprofits, few donors think about such things. For now, at least.
That is the nature of the beast... Of course you can get more "bang' for your buck putting money into non-profits in Wyoming instead of California. The cost of living is lower in Wyoming, so your money (CEO salary included!) should go further. For that matter, you can fund non-profits in India or China, where your money will go even further!
Donating to a non-profit, by its nature is to put money into a social cause. So the real question to answer is: "Are the causes you want to fund doing work in CA that you value?"
Just as you (and others have mentioned), you don't get to pick the costs of goods, you can only express what you pay for them. They choice to spend is yours (and when it comes to the public good, it is society's choice in a democracy).
@Richard Rider Most people donate locally because "bang for the buck" is not part of the decision making process. While we may avoid charities with high fundraising to service spending ratios, the goal of charitable giving is not return on investment. The true economic impact to you is exactly the same (your deduction doesn't change because of where the qualified charity is located), but the intangible (feeling of doing "good") does.
@bcat @Richard Rider When one donates to a cause, a part of the donation goes for overhead. Charity services such as Navigator.com rate such services as to how effective they are in spending donors' contributions.
I prefer that most my money goes to the CAUSE, not to the overhead. Obviously you prefer to pay more for overhead, and less towards the cause. To each his own.
And while "society" can dictate salaries, benefits, etc. in a jurisdiction, I in turn can choose to send my checks elsewhere. I value choice -- something I suspect you wish to restrict.
@DavidM @Richard Rider You feel good paying more for a service. Great. Doubtless you shop at Rodeo Dr. and the ritzy department stores. I shop at Walmart and Costco. To each his own.
Trust me, I'll be feeling good about my donations, knowing that they are doing more good than yours.
But you DO raise the same point that I did -- most donors simply want to feel good. They don't look at how much of their donation actually fulfills the intended purpose. Sad but true.
What ever gave you the idea that I wish to restrict choice?
Quite the contrary, I applaud choice! Seems like you were merely complaining that your money didn't go further for California non-profits and that they had a double standard with regards to fighting for minimum wage and not wanting to live by the consequences.
I agree with "live by the sword, die by the sword". They will have to live with higher minimum wage.
However, I also agree with "if you don't like it, leave it." I you don't like California's minimum wage, you're entitled to:
A. Spend your money in Wyoming, India, or China
B. Move to Wyoming, India, or China
C. Convince San Diego, California, and the United States of your view point and get the electorate to vote for your ideas
D. Run for political office and exercise your ideas through political means.
You seem to prefer to deride other people's opinions, whine and complain about California, and you've fail to get a political office for decades. You seem to be in the minority. Best of luck.
@Richard Rider @DavidM The charity does not provide a service to YOU. That's an intangible benefit of charitable giving. One of those benefits is also a charity that pays a living wage to it's "overhead."
But, purely as an aside, how does it make you feel knowing that your Walmart trips are supporting Chinese slave labor? Or, if that's uncomfortable, how about both of us leave the ad hominem out of the comment section and concentrate on opinions about the article?
This is the same challenge faced all over SD. Minimum wage increases are painful in a number of 'businesses'. However, it is a necessary pain if you want to pay people enough to live where they work.
Here are two other challenges to consider:
1. With high wages, how do you 'stop' people from living in TJ and commuting to SD (California)? The higher minimum wage will encourage people to take those higher wages and spend them on lower cost living spaces in TJ rather than living in SD and working in SD. I recognize that there are barriers to living in TJ and I'm not moving there any time soon, but the number of legal border crossings each day reveals how many people really do cross the border.
2. Paid summer internships may take a nosedive as well. As costs go up to pay college / high school students to work, the paid internships that give them the ability to 'test' out a career will disappear, increasing the risk of job dissatisfaction later in life. I guess this means my kids will be volunteering more this summer instead of getting paid to work.
@bcat A person's pay is not decided by politicians. Prices are only set by the market which balances supply and demand. Unfortunately our economically illiterate population believes that politicians can set the price. They cannot. It's a myth. A lie to the gullible.
You can't "pay people enough to live where they work". That's now how compensation is set. People's pay is a measure of the value they create. People who push a broom or dunk fries do not create much value and therefore cannot be paid much money. If you try to force organizations to pay them more they will move to alternatives.
Non-profits are just some of the long list of people hit by government attempts at price fixing. The government cannot set the price of anything, only the market can do that.
Those hurt most are the young people as you correctly identified. They lose opportunities to get educated the most economical way possible - a job.
I'm curious why you think it's your job or anyone's job to "stop" people from living where they want to?
The short answer is that we have public goods such as: air quality, freeways, parks, ... that need to be apportioned. When I enable commuters to drive / train / fly into San Diego to work, I decrease the pleasure of living in San Diego. I need to compete with more people for the 'public goods'. So, in a crass, selfish way, enabling people to drive into SD 'for free' from outlying areas causes more congestion and pollution. Why should people get to use my public goods 'for free'?
One solution is to charge for these 'public goods' just like we charge for trash collection. Trash collection is supposed to assess the cost of removing and storing your trash. If we added tolls (which I hate) on our freeways, then commuters from other cites / counties would have to pay for their congestion of my local freeways.
Everything has a cost. The cost of french fries in LJ should be higher than the cost of french fries in Idaho - cost of living and cost of potatoes! This should occur locally as well. It should cost to travel on the freeway if we agree that congestion is bad. I for one, think congestion is bad for many reasons - some we can all agree upon, some maybe we cannot. That's where the democratic process steps in: we vote for those costs.
So, the question comes full circle to why is there a minimum wage. It is because it has a social value that is not purely economic (free market). Therefore, it is within a democracies rights (and it is its duty) to decide IF there should be a minimum wage and WHAT the value should be; it is the mixing of social and economic value that makes minimum wage a political issue and our Constitution guarantees that is a meaningful political issue.
@bcat @Michael Robertson You improperly suggest it is free to "drive into SD". That's completely inaccurate. Every person pays gas tax, smog tax, oil tax, tire tax, car registration, fines, tickets, sales tax, etc. Driving is not free anywhere.
I agree congestion pricing is smart, but I oppose it since the state already charges billions to people to drive and makes a huge profit from it.
I give people this mind exercise. Lets sell our roads to a corporation to manage. That corporation will receive all the taxes I list above. Do you think a corporation would take that deal? Absolutely they would!
This is a long winded way of saying people pay huge for the "Free" driving you mention. The government just squanders a big chunk of that money.
@bcat @Michael Robertson Actually, minimum wage laws are rooted in eugenics and racism. They were originally designed to create an unemployable class of people that would then be segregated from the rest of society.
“Progressive economists, like their neoclassical critics,” Leonard explains, “believed that binding minimum wages would cause job losses. However, the progressive economists also believed that the job loss induced by minimum wages was a social benefit, as it performed the eugenic service ridding the labor force of the ‘unemployable.’”
A decidedly different "social value" from that proposed by bcat.
A classic free-market corporation would optimize utility in an economic sense: price until demand and supply are balanced.
First, recognize that free-market only works with infinite competition and perfectly efficient markets. For a product like retail gasoline sales (less the taxes) it works great. That's why it costs more to buy near an on-ramp / off-ramp or in a wealthy neighborhood.
However, freeways will not have sufficient competition to be competitive. Therefore, it'll be more like cable TV or electricity - a monopoly or oligopoly - both of which are bad for consumers and the economy as a whole.
Second, the social goods that I value (e.g. pollution and congestion) are not addressed by a free-market owned freeway. You need to monetize those social goods. As soon as you monetize them, you place an economic value on a social good, hence TAXES!
So, we are right back where we started. At the heart of it is the concept the social values can be monetized. You express these through voting representatives and the proposition system.
If you don't like the system - "government squandering" included - use your vote to make a difference. If you don't get your way, either convince more people (like we're doing feebly in this blog) or recognize that you're a minority.
I agree that economics is a social 'science'. I am not convinced that merely changing a minimum wage promotes the socio-economic values that I espouse.
Here's what I want:
* Everybody should have a chance to make a decent living with food / shelter / clothing / enough healthcare to prevent preventable disease (e.g. malnutrition, polio, ...). Somewhere between the squalor of the streets of Calcutta and far from the obvious failures of communism.
* Everybody should have access to enough education to make good democratic decisions (I don't want any 'more' dumb voters). Somewhere between reading/writing/arithmetic and free-drunken-frat-boy college.
* Minimize barriers to making good economics choices (e.g. work at a better job, buy better products, ...). Hmmm... I can't think of a pithy example to bound this problem.
* Protection of mutual interests from foreign influence (e.g. common defense against military and economic dominance by foreign powers) Duh. I want police / border patrol / military and I don't want free-market agreements with non-free-market countries (like China).
All of these things require a vibrant economy. Classic Libertarianism does not support all of these values, just some of them. The socio-economic question I am asking here is whether or not the minimum wage is sufficient to achieve my social goals.
These are big issues and big values. I've heard it said that "all politics is local" (Tip O'Neill?). Well, seems like minimum wage could be a "local issue".
However, if minimum wage is not the way to achieve what I want, then I'd like to find a better way. The reality is that a brazen, unfettered "free-market" is not really free, so I automatically reject the concept of "no government, no taxes, no mutual interests, everything owned by corporations" approach. What nation survives on that concept today? If there are none, why?
@Michael Robertson Your basic presumption is, well, too basic. Prices are manifestly NOT set ONLY by the market which balances supply and demand. Because supply and demand also assumes perfectly elastic markets, complete and accurate flow of information, and instantaneous job liquidity. The libertarian model dies a quick death when other intangible work characteristics are factored in as well: do I like where I work, or the people I work with, what training or education will I require in order to change jobs, etc. But most significantly, there is ALWAYS a supply of unskilled labor, and RARELY a demand sufficient for full employment.
Those who advocate for a higher minimum wage also recognize that the "free market" leads to tremendous concentration of wealth and subsequent denial of economic opportunity. I lived the American Dream at a time when it was relatively easy to do so. For someone in my circumstances 45 years ago, that's not possible today.
@DavidM @Michael Robertson Your examples make no sense. Yes there are many factors that go into the demand and to the supply. That's why the free market works! There's billions of signals all incorporated into the market. Those signals manifest themselves with individuals making choices.
A free market does not lead to "denial of economic opportunity". It's quite the opposite. As countries embrace the free market millions and sometimes billions are moved OUT of poverty. The economy is not a zero sum game. Steve Jobs didn't get rich because he made others poorer. Same with Brin, Zuckerberg, etc.
You are also wrong suggesting free market leads to "concentration of wealth". Yes there's an opportunity for some to get very wealthy but others benefit to. Steve Jobs got rich by improving other people's lives. That's the reverse of what you're claiming. True concentration of wealth can be seen in countries that do not have a free market where dictators control everything.
Completely unfettered markets leads to market manipulation, which is the anti-thesis of free. There are very few people who would argue in opposition to, e.g., whether child labor laws, or workplace safety laws, should be completely eliminated. The issue is whether those laws go too far to regulating the "free market." The same argument applies to minimum wage.
You can cite Steve Jobs, with the un-quantifiable claim that he improved other people's lives. That's a historical judgment, unmeasurable at the time he did so. But I can cite Martin Shkreli, as the poster child for why some regulation is absolutely necessary.
Your unwillingness to concede that Apple/Jobs have improved people's lives shows a deep seated resentment or blindness. Nobody is forced to buy ipads or iphones. They do because they believe it makes their lives better. This is the beauty of capitalism. People making voluntary decisions to improve their lives.
Your Shkreli example fails because it involves the patent system. The patent is system is the absolute opposite of the free market. The government tells competitors they will fine or imprison them. Where you have no competition you will get abuses. Patents do far more harm than good.
Your unwillingness to concede that some market regulation have improved people's lives shows a deep seated resentment or blindness.
I wrote one sentence about, in which I didn't judge Jobs at all. You completely ignore the half dozen sentences before it.
I have to disagree about Shkreli; the argument behind the existence of the patent system is to allow inventors to profit from their ideas. The goal is to encourage creativity and ideas. Shkreli's example shows how the someone in the "free market" can buy an idea (a patent) and abuse it solely for profiteering motive.
@DavidM @Michael Robertson If you have examples of where market regulation has improved people's lives I'm happy to hear about them and examine them. Any benefit would have to be measured against the negatives. e.g. Raising minimum wage causes people to get fired and not hired. So to claim there's benefit one must subtract all the negatives. I find this is rarely done by those that believe in government magic.
A stark example is drug laws. I'm sure some people point to drug laws as positive regulation. However the US spends $41 billion per year and people are taking more drugs than ever. Our prisons have millions of people for drug offenses. Majority of crime is due to black market drugs.
Child labor laws don't eliminate child labor only an improving economy does where the low productivity of unskilled children is simply not that valuable. I'm sure every country would like to wave a magic wand and POOF- no children have to work and everyone makes a million dollars per year. But that's not how economics works. It's not how the real world works.
@Michael Robertson @DavidM Assuming that by "drug laws" you mean the War on Drugs then in substance I agree with you; it is an abject failure. But the positives of "tax the sale of recreational drugs" must also be weighed against the negatives of "I'm addicted so I burglarize houses for drug money." It's a debate worth having, but arguing only in the extreme is what extremists do.
Do you really think that child labor laws haven't stopped any child labor abuses? There are any number of rote jobs out there which require unskilled labor. (Cleaning a motel room, washing dishes, folding laundry, stocking a grocery shelf, . . .) Or that workplace regulation hasn't stopped some worker injuries?
You're not even trying to see the benefit of a minimum wage increase; just counting negatives and say they outweigh whatever benefit lies in the same decision.
Really? Non-profits cannot afford new minimum wage? Then, why they can afford the 6 and 7 figure salaries of their CEO's? Their work does not worth that much at all, furthermore, their job is very "profitable" and obscene for a non-profitable organization.
Kathy S, you stirred my curiosity, so I looked up San Diego Zoo Global's IRS form 990 and found that CEO Douglas Myers made over $400,000 in compensation in 2013 with the next 11 employees bring in over $200,000 each, with one making in excess of $300,000. While VOSD's poor Scott Lewis, according to it's 2013 form 990, was compensated a lousy $114,684; hence VOSD's big push for ever more donations.