Balsam, Mao and their colleagues examine the impact of state-level minimum wage increases on nonprofit organizations, finding that nonprofits experience significantly larger declines in employment growth than for-profits. The study also reveals that nonprofits respond to wage hikes by increasing investment in automation but do not significantly substitute volunteers for paid employees. Additionally, minimum wage increases raise the likelihood of nonprofit closure. These findings highlight the financial vulnerabilities of nonprofits and suggest that policymakers and nonprofit leaders must develop strategies to sustain employment and service delivery amid rising labor costs.
The Effect of State Minimum Wage Increases on Nonprofit Organizations
