Henry Street adopts $22 minimum wage

The nonprofit’s new pay structure is meant to be as symbolic as it is a major help for the organization’s employees.

Henry Street Settlement.

Henry Street Settlement plans to raise the minimum wage it offers employees to $22-an-hour. The decision, which goes into effect July 1, will effect more than 200 employees working at homeless shelters and who deliver meals, clean buildings, provide childcare, among other occupations. Many of the positions have been tied to city contracts, which often don’t provide for cost-of-living increases and offer low salary rates. 

The symbolism of the move, especially after the devastating impact of the coronavirus, also makes the argument that even New York City’s minimum wage of $15 is still not enough.

New York Nonprofit Media caught up with David Garza, Henry Street Settlement’s president and CEO, to discuss the challenges of offering a higher minimum wage for a nonprofit and how it can be viewed as a moral obligation towards achieving economic justice. 

This interview has been edited for length and clarity.

A common argument for maintaining the status quo on wages for lower-earning workers is that companies or organizations simply don’t have enough money to spend on increasing pay and doing so would hurt a business or organization. Essentially, workers getting paid more would be a financial burden. Do you buy this argument? And can you discuss how this pay increase is impacting the finances of Henry Street?

Sometimes, you can't afford to not do something. When it comes to our people, at this point in time, [raising the wage] was somewhat of a no brainer. And it was unanimously supported by management. I think that as much as it's framed as aspirational, it really shouldn't be because it's really economic justice. What we pay people is the number one controllable variable that we have, out of all of our expenses as an organization. In that regard, I think every budget is a moral document. I will say that COVID help[ed] us achieve the clarity that we needed on economic justice, through lenses of race, through lenses of class. Without any exaggeration, when COVID hit, and when the city, state, and country were telling people to stay home, the human service sector was asking people to come in, and the people that we were asking to come in were the lowest paid workers on our spectrum of team members. They were the meal deliverers, they were the people that work as resident assistants in our shelters, they were our childcare workers. And seeing that kind of stark reality that, in the midst of a crisis, we [had] to pay these individuals more. We[‘ve] participate[d] in numerous advocacy efforts, whether it's the Just Pay campaign or whether it's been Fight for 15 [or] conversations in City Hall about income and increasing contract levels, so that we can pay people more. So, whether it's out in the street or in City Hall, we're part of that important advocacy. But seeing the injustice and disparity in essential pay for essential workers was really good. I think [it] motivated us to act. And again, I stay grounded in the fact that as this feels aspirational, it really shouldn't be, it's just economic justice.

Please talk a little bit more on how your budget serves as a moral document.

I grew up in blue-collar Brooklyn and an expression that I remember vividly [was] “Put your money where your mouth is” right. What that essentially means is you make an investment in the things that you care about [and] the things that matter to you. We [at Henry Street] would prefer to spend our money on people rather than products. Human services require human services; you need people to do this work and I think it's important to invest in [our] most valuable resource. Wherever possible, when you can look at issues of equity both external[ly] and internal[ly], it's really important.

I think every organization, whether it's for profit or nonprofit, [uses] cues from society, the government, or from the economy. Those cues are like, “We did this for a number of years,” or benchmark[ing] ourselves against other providers, benchmark[ing] ourselves against the minimum wage, or benchmark[ing] ourselves [against] the average being paid for this particular position. [Henry Street sought] to be in the top th[ree] on compensation because we want our people to feel valued, we want our people to be compensated as fairly as possible. But those benchmarks are external benchmarks of the economy, peers, and the labor market, [even if] that may not be the organization's values. 

If a company sets out to maximize dollars, what they pay their people is the number one control variable. [They’re] going to suppress wages in some way, shape, or form because that company wants to make a profit. But in a nonprofit scenario, we're faced with a similar conundrum, because we want to maximize services. How we pay our people and how many people we have on board is going to determine how much good we can do in the community and how much we can help. So, that's another suppression of wages, because we want to be so conscious and so responsible [regarding] that variable. I think what gets left out of that equation when you compare yourself to an external benchmark in the business sector or minimum wage, or when you compare yourself to internal benchmarks, [is that] you're missing the most important benchmark. One through an equity lens, [asking] “What do people need to get by.” So, when we say a budget is a moral document, if our morals and our value statement is that we care about our people, why then benchmark against the labor market or what government contracts will pay? 

Do you think other nonprofits will follow Henry Street’s example or is the subject of paying workers a “livable wage,” as your organization describes it, still very taboo and rigid?

I know that a lot of nonprofits are taking the steps that they can within their individual circumstances. I think it's important for nonprofits to be thought leaders in the space, but I also think it's important for us to be action leaders. I hope that it will serve as an example that it can be done if the circumstances are configured in a way where it can be done. We hope that people ask us questions about how we're doing it, we hope that philanthropy and government contracts respond accordingly. And that this economic justice [and] equity action is embraced because it's already being embraced in advocacy campaigns, it's already being embraced from certain sectors of government and budgets. We know, the state budget includes a cost of living adjustment, which is not necessarily this. But, it does speak to the fact that stakeholders, philanthropists, government, nonprofits and [those in the] private sector are taking heed to why it's important to pay people a living wage that can help them make ends meet. This is really about rent, this is about food, this is about the electric bill.

We shouldn't be contributing to the very cycle of poverty that we're fighting. 

Henry Street was active in fighting for increased pay for workers while Mayor Bill de Blasio was in office. With a new mayor, how does Henry Street plan on bringing that message forward? How will it breach the subject with Mayor Eric Adams? 

We have a lot of optimism about the Adams administration and we know that we have a lot of partners that are amongst his appointees. Whether it's Sheena Wright [the former United Way executive turned deputy mayor] or Maria Torres-Springer [formerly of the Ford Foundation who also has taken a deputy mayor’s post], or others that are working with the mayor, we believe they understand the issues faced by nonprofits and we plan to continue to participate in the advocacy efforts. We're a member of the Human Services Council [and] we're a member of [the] Federation for Protestant Welfare Agencies, as well as the United Neighborhood Houses. Our membership and participation with the advocacy groups that we belong to is going to remain consistent and more active.

Observers have noted that companies will sometimes tack on extra responsibilities and increase workload alongside increasing pay, essentially canceling out the purpose of the wage increase by using it as an excuse to put more work on employees. How does Henry Street plan on ensuring that workers maintain in a consistent, healthy, and manageable work environment, alongside an increase in pay?

Focus[ing] on our people [has been a] part of a broader effort that we've made over the last three years. With this increase to a living wage, [as] I said before, it's become a really important internal talking point that this increase is about rent, food, utility bills. It's not about what position you hold, it's not about how long you've been at Henry Street, it's not about job responsibilities. It's not about trying to get more out of the team, it’s really about equity and economic justice. Job descriptions won't change, responsibilities won't change. This goes into effect July 1. 

As several businesses in the New York area get back on their feet in terms of staff retention and hiring, do you think this move by Henry Street will attract more workers? And will increased pay help retain current ones?
We hope so. I think one thing that the pandemic or [perhaps] the focus on paying living wages, equity and racism has raised, it's that organizations need to really take action, and increasing wages is really a top form of racial equity. It's a fact that two thirds of the people that work in human service organizations are people of color. In raising our wage floor to $22 an hour, it's a statement on behalf of this organization, that that's what matters to us. That's what we care about and that's where the investment is. I was stopped by someone in the hallway [who] said, “I'm proud to work here and thanks for the organization making that move.” We hope [our] investment in our people will help us attract and retain talent, because certainly, that's a part of it. It's not a surprise to us that asking individuals to do hard, grueling work that has to sustain whether you're in a pandemic, or in a snowstorm, or in a blackout [is tough]. So, when people make decisions about where they can work, we hope that the fact that we make investments in our people will help us attract and retain people who have those similar values and want to work in a place where it's reflected in some of our policies and budget decisions.

How has the Henry Street community responded to the news of increased pay? Any comments from fellow nonprofits or others in the nonprofit world as of yet?

I've gotten a few texts and tweets from peers. From within Henry Street, it's generally really favorable. But in full transparency, I've also had some people who aren't necessarily pleased with the decision. They (people making $22/hr before) feel that, all of a sudden, they're making minimum wage, even though it's not New York City minimum wage. We all do it, [but people] sometimes tie [their] identit[ies] to [their] wages [or] job. But, we did feel that the the most important move for us to make at this particular time, was one around economic justice and really lifting up our wage floor so that no one had to struggle to meet their basic needs. We're asking those team members that are kind of in the middle range to understand that. In lifting the water, all boats will rise. [Still,] we'd be really delusional to think that we don't have a lot more work to do, we know we have a lot more work to do. And that commitment is real. We want to be better against ourselves. 

What is your advice to other nonprofits considering making a similar move, but who are worried about the financial risks or other concerns? 

I make it a point to never give advice, I [will only] share experience. Our experience was to not let perfection get in the way of progress. When we looked at this, we knew that it was good [and that] it was going to set the bar higher for ourselves. We knew that there [were] going to be issues around compression, and that some individuals who were not part of this living wage increase might be demoralized. But, we did also acknowledge, especially with the numbers of team members that we’re talking about, that it was about a greater good and [making a] really important step toward equity. So, I would [say, don’t] let perfection get in the way of progress.