The impact of the new minimum wage law continues to unfold. The average of wages prior to Prop 206 was $9.25, 15 percent over the previous minimum wage. We will incur another 5 percent increase in 2018, 4.8 percent in 2019 and 9.1 percent in 2020 to get to the full $12 rate. Small increases to our contracted rates this year narrowed the gap between cost of service and rates paid, so that we were able to meet the additional costs. The cost of trying to keep a competitive wage most likely will drive us to an independent contractor model.
The challenge we are facing at this time is two-fold. First, it has become more difficult to attract workers, since we are paying the same rate as many less emotionally and physically demanding jobs in retail and hospitability. We are not able to pay an additional percentage over minimum wage due to the fixed full costs compared to the rates paid.
Second, we are looking to philanthropy to fill the gaps, and raising money for wages is not attractive to donors. Donors are attracted to providing the extras that give a better quality of life. Donors see wages as something that our contracts should cover.
Yet the full cost of doing services is far greater than the cost of the hourly wage. There are many uncompensated costs, such as mileage costs between homes, cleaning supplies, benefits, and administrative support.
We continue to advocate for funding for community and home-based services for older adults and those with disabilities. Older adults are the fastest-growing population in our state. Services that allow them to live independently are far less costly and support optimum health. These services are available only if there is a workforce.
Connie Phillips, MSW works with Lutheran Social Services of the Southwest
