Number crunch

Nonprofits, like the Work Training Center, also feel the effects of a rise in minimum wage

I was in high school the last time I worked for minimum wage. So when the rate went up by a dollar to $9 an hour in California last week, it barely hit my radar. My paycheck, like most of my peers’, will stay the same.

It was immediately evident to me that restaurants and retailers who hire entry-level employees will be affected by the increase. But I hadn’t considered what would happen at nonprofit organizations, probably because I tend to think of them as existing outside the sphere of normal business operations.

For better or worse, there’s no loophole for nonprofits, and the impacts are the same for them as traditional, for-profit businesses. For the Work Training Center (WTC), one of Chico’s largest and well-known nonprofits, the effect will be felt on a large scale.

The WTC serves more than 700 Butte County residents, offering a wide range of services for adults with developmental disabilities. There are recreational programs, programs that build social skills, and programs that focus on vocational placement and skills. In addition to placing clients at individual businesses throughout the community, the WTC also employs clients to work in its landscaping, janitorial and recycling divisions. WTC has an exemption to minimum wage laws because its clients’ production rates vary depending on their abilities. That doesn’t mean, however, that it won’t feel the effects of a rise in minimum wage—WTC calculates its pay rates based on individual production levels and then pays a percentage of either minimum or prevailing wage (often higher than minimum wage and based on average pay for certain jobs).

Anytime minimum wage increases, therefore, the rates paid to the 400 clients who participate in the vocational programs must be re-evaluated. WTC Executive Director Don Krysakowski said the organization could be looking at a 10 percent to 12 percent increase in wage costs.

Krysakowski isn’t opposed to paying WTC’s clients more. What is disconcerting to him, though, is the fact that the funding the state provides to the WTC to operate these programs stays the same. In fact, Krysakowski said the Work Training Center is still operating under funding rates set by the state 10 years ago, back when minimum wage was $6.75—the same rate I was earning working part-time in high school. The latest hike in minimum wage isn’t an overwhelming burden, but it contributes to what Krysakowski called “a death by a thousand cuts.”

The Work Training Center has thrived for the last 65 years and will find a way to do so now, just as the majority of businesses will. But like Krysakowski said, we cannot dismiss all the small cuts that California businesses and nonprofit organizations have endured, because that thousandth cut could be just around the corner.

An increase in state funding isn’t likely for the WTC, but as a community, we can help offset the burden a bit. If you own a business that needs landscaping or janitorial services, check out the contract services WTC provides at Krysakowski said the WTC also is boosting its manufacturing services and is always looking for new businesses to contract with WTC.