The Initial Nonprofit Exposure and Response to Seattle's Minimum Wage Ordinance

Nearly 40 local governments adopted minimum wage rates higher than the federal minimum in the last decade. Research on such laws focuses on employment and price adjustments of for-profit firms. Higher minimum wage rates, however, may pose unique challenges to community-based nonprofit organizations, many of which serve vulnerable communities and have limited ability to modify business practices. We use survey and in-depth interview data with more than 125 nonprofit executives to explore how nonprofit organizations were exposed to, understood, and responded to the initial phase-in of Seattle's $15 minimum wage ordinance. Although most nonprofits with low-wage workers do not report substantial programmatic changes in response to the minimum wage, we do find evidence nonprofits are pursuing several avenues to raise revenue to cover higher anticipated labor costs. Results suggest that the channels of adjustment available to nonprofits have a different character than those available to for-profit firms.