In 2014, CASA of Tulare County won an award for Non-Profit Organization of the Year at the Chamber’s Annual Awards Celebration. Executive Director, Marilynn Barr, gave an acceptance speech to a packed house. “You know,” she began, “we’re a business. We have payroll and buy office supplies. We have the same costs of doing business just like many of you in this room.”
Marilynn hit on an crucial component needed in the political mix of new decisions regarding minimum wage increases in California: non-profit organizations are businesses — just without products to sell, but rather we offer complimentary services to individuals and families who do not have the means to pay for them.
In 2015, Visalia Rescue Mission saw an increase of operating expenses to the tune of $400,000 thanks to the Affordable Care Act requirements, workers compensation increase (9% in California), and the July 1, 2014 minimum wage increase with another dollar increase coming January 1, 2016. With employers (for-profit and non-profit) burdened with increased costs of doing business, they make one of two choices: cut staff positions and/or hours, or increase their service and product prices. Non-profit organizations can only choose the former.
In either case, families and businesses alike will have to work harder and get creative to make ends meet, which means there will be less disposable income making its way through the non-profit circuit. We’re currently seeing this happen within the dairy industry, with many local dairies being longtime supporters of the Mission. An article last month revealed a hundred weight of milk is currently set at $13 by California’s Secretary of Agriculture. The cost to produce that milk? An average of $19.74. With those kinds of losses, it becomes more difficult to support organizations like ours.
Visalia Chamber of Commerce is currently collaborating with other chambers in the San Joaquin Area on this issue. This kind of unified voice creates collective action, which at that point, it will be difficult to ignore both the financial figures and compelling stories which expose the real impact this law will have on business, our cities, and ironically, the very people the State is attempting to help.
In short, California organizations are worried. We already know what this impact will have on our services and ministries, and we’re beginning to run the numbers of each year’s wage increase. Additionally, a brand new federal rule regarding overtime rules for salaried employees will also have non-profits like ours juggling even more balls than we already are, just to continue to do what we’ve always done.
Ironically, Governor Brown, who just signed the new minimum wage increase legislation, was recently quoted in a Sacramento Bee article, “Economically, minimum wages may not make sense.”
For 35 years, we have thrived because of this generous community and have yet to take a single state or federal dollar, but with each attempt to help the working world put a little more in their pocket, there will be unintended consequences we will all have to endure.