New Missouri minimum wage impacting non-profits
Non-profits say increases having adverse effects.
JOPLIN, Mo. – For the last 21 years, David Young has worked at Joplin Workshops to supplement his income from social security disability.
“If it wasn’t for sheltered workshops in general, a lot of people who have disabilities, they wouldn’t be making extra money,” says Young.
That’s why he was originally excited about the minimum wage increase in Missouri. But to put it in his words, it has proven to be a double-edged sword.
“I used to work two jobs seven days a week. This job and another job. And since everything has transpired, I’ve had to cut back,” says Young.
Joplin Workshops Executive Director Jeff Jones says people who receive benefits like Social Security Disability and Medicaid can’t earn more than a certain amount of money each month, or they will lose their benefits.
“In 2019, they could earn $1220 a month before it started affecting their benefits. It’s changed again, to where they can earn $1260, but the [pay] increase overall for them is $110 a month,” says Jones. “So that actually reduces the hours they can work. So it’s kind of a… well, it’s a bad policy basically.”
Jones says he’s had to have more employees with even fewer hours because of scheduling more people, so all of them lose some money in the long run.
He’s had to make other changes as well.
“We had to change our rate structure with our customers and it, ya know, just inflated the price for them so we could cover our employees,” says Jones.
Jennifer Shotwell, CEO with the Area Agency for Aging says they’ve had similar problems since the first rate increase in January 2019.
“We didn’t have but maybe one, two, or three people that were actually making the minimum wage that got the first increase. This January 1st, 2020 affects a whole lot more of our staff,” says Shotwell.
“There are folks that have been with us for a long time, and now as minimum wage creeps up, the new person coming in is going to be at a rate equal to what someone else has earned over the last few years. And there is no funding available to raise everyone accordingly,” explains Shotwell.
The agency receives federal funding that’s dispersed by the state, but Shotwell says that funding hasn’t increased to keep up with the wage increase, and is set through 2021.
Adding that lack of new funding to the increased wage and what Shotwell says is a record number of seniors entering the program is causing her to make some hard choices.
“Unfortunately, the first thing that you have to look at is your expenses. Do we lay people off? Do we combine jobs? Do we have positions that we don’t fill when someone departs? Because we have to cover these wage increases somewhere,” says Shotwell. “We try at the very last to take things out of the programs that we offer, but this is what we do. We’re not a for-profit business that says we can raise the price of a double-cheeseburger for ten cents.”
Shotwell says they will be relying very heavily on donations throughout the year, and Jones says he is taking it one day at a time.
“It’s the way it is and we’ve gotta manage it with what we can. Not only for our business but for our people more importantly,” says Jones.
The minimum wage in Missouri is set to increase every year until 2023 when it will reach 12-dollars an hour.