One of the most discussed issues in this budget season was the minimum
wage. For many of us in the not for profit sector, it was not a question of
supporting or not supporting the minimum wage, it was a question of what
the impact of the minimum wage will be to the not for profits. Specifically
in our case, it is predicated on the impact to the mental health workforce.
The State and Legislature did provide some initial funding for the not for
profits including the mental health workforce and that is appreciated. What
is also appreciated is the transparent way they came up with their
methodology.

All that said, the figures the State came up with vary with numbers that
the not for profits have come up with. Our friend and colleague Doug
Cooper, the Deputy Director of the Association for Community Living ,has
done a review of the impact and his numbers have been verified by several
sources. The State calculations do not take into consideration the role of
compression which will have a huge impact to the community.

Over the next several years, these numbers for the mental health workforce
will play a large role in redefining the need for funding for the not for
profits in mental health. The calculations from the ACL report are listed
below. Thanks again to Doug and ACL Director, Toni Lasicki for sharing
these numbers with the community.

The state used information from Consolidated Fiscal Reports (CFRs) obtained
from all not-for-profit providers to determine the minimal impact created
by increasing minimum wage. New York City will be increased incrementally
to $15.00 per hour by 2018. Long Island and Westchester County will reach
the $15.00 per hour rate by 2021. The Rest of State (ROS) will be
increased incrementally to $12.50 per hour by 2020.

Unfortunately, the State’s calculations only take into account raising the
salaries of positions that would need to be brought up to the new minimum
wage amounts. This method of looking at the impact of increasing the
minimum wage only addresses a fraction of the impact to community based
mental health providers.

The hourly rate for many positions in the community mental health sector
will need to be adjusted up for there to be any hope of attracting and
retaining a qualified workforce. An example is a worker that is currently
paid $13.50 per hour. This worker is currently valued and paid at 50%
above the current minimum wage of $9.00 per hour. When the minimum wage is
increased, the salary of the worker making $13.50 per hour needs to be
adjusted to keep the same percentage differential with minimum wage.

So if the new minimum wage reaches $15.00 per hour, the worker in this
example would need to make $22.50 per hour to retain the 50% differential
with minimum wage. Adjusting the pay of not only workers below the new
minimum wage, but including positions that would also be impacted by the
increase is referred to as compression. Using compression as a factor,
there are over 18,000 positions in the community mental health sector alone
that will be impacted by increasing minimum wage.

In addition to the compression issue, fast food workers state-wide are set
to see their minimum wage increase to $15.00 per hour over the next few
years. This will create a scenario where fast food workers will have a
minimum wage above the $12.50 per hour being set for community mental
health providers in ROS, further increasing the recruitment and retention
problems faced in our sector. New York State needs to support the
community mental health sector by increasing contracts and Medicaid
payments to address the problems providers are facing when minimum wage is
increased.

Just as New York State relied on information from the CFRs of community
based not-for-profits, a coalition of advocacy groups in the mental health
community have developed a projected impact to the community mental health
sector as minimum wage is increased using CFR data from the entire New York
State community mental health system. The total impact once all of the
targeted increases to minimum wage are met is in excess of $423 million.

The following shows the year by year impact to the mental health system as
the minimum wage is increased:

12/31/16

New Minimum     Impact

NYC $11.00                $72,985,110

LI & W $10.00          $14,451,118

ROS $9.70                  $23,801,841*

TOTAL                         $111,238,069

12/31/17

NYC $13.00               $145,847,806

LI & W $11.00          $28,854,578

ROS $10.40               $47,603,683

TOTAL                        $222,306,067

12/31/18

NYC $15.00               $218,700,754

LI & W $12.00         $43,245,738

ROS $11.10                $71,287,782

TOTAL                        $336,628,930

12/31/19

NYC $15.00              $218,700,754

LI & W $13.00         $57,660,760

ROS $11.80               $94,631,851

TOTAL                        $370,993,365

12/31/20

NYC $15.00              $218,700,754

LI & W $14.00         $72,078,897

ROS $12.50              $118,713,528

TOTAL                       $409,493,179

12/31/21

NYC $15.00             $218,700,754

LI & W $15.00       $86,463,088

ROS $12.50             $118,713,528

TOTAL                       $423,877,370

Translate »