Minimum Wage Increase: The Impact on Supported Living

The Seattle minimum wage law went into effect in April, 2015 mandating an $11 per hour. Effective January 1, 2016, the minimum wage in Seattle will increase to $13 per hour, increases to $15 in 2017, and is indexed to inflation thereafter.  The Tacoma minimum wage goes into effect February 2016 with a new required minimum wage of $10.35 per hour, $11.15 in 2017, and $12 in 2018, with annual increases indexed to inflation thereafter. Funding for supported living services is appropriated by the legislature from Medicaid funds and the 2015-2017 budget does not provide funding to meet the minimum wage requirements. The Developmental Disabilities Administration uses the amount of funds allocated by the legislature to contract with providers for services. The funding is based upon an hourly amount established by the legislature, which must be spent on compensation for direct support staff. Providers cannot “raise prices” to meet a new minimum wage.

According to the 2015 Developmental Disabilities Administration Residential Staffing Survey:

  • Median entry level wage for direct support professionals is $10.83 per hour in King County.
  • Median entry level wage for direct support professional is $10.41 per hour in Pierce County.
  • There are approximately 3,500 supported living direct support professionals in King County, with approximately 1,100 providing services in Seattle.
    • This impacts services to over 1,000 individuals with developmental disabilities receiving supported living services in King County.
  • There are approximately 1,500 supported living direct support professionals in Pierce County, with approximately 900 providing services in Tacoma.
    • 470 people with developmental disabilities receive supported living services in Pierce County

Supported Living providers in King and Pierce Counties are a mix of non-profit and for-profit providers, as well as large (500 or more employees) and small businesses.  All providers must be treated equally when appropriations are made in order to maintain a variety of providers and not dramatically increase turnover for small, non-profit providers and drive these agencies out of business.

Raising just the bottom of the pay scale to simply meet the new minimum wage for staff entering the supported living field would create more issues for staff recruitment and retention than it solves.  Funding will need to be raised in order to avoid a compression of pay commensurate with position and longevity.

It should also be noted that most, if not all, supported living providers in Seattle serve the rest of King County, and those in Tacoma serve the rest of Pierce.  Employers cannot simply pay employees based upon one municipality in a regional economy.  Agencies would not be able to pay employees in Seattle and Tacoma the mandated minimum wage and those in adjacent cities $2 or $3 less per hour.  This is a regional issue and must be addressed for all of King and Pierce Counties.  In order to bring direct support wages up commensurately with the mandated minimum wage increases, it will require the following additional legislative appropriations (benchmark increase of $2.16 effective January 2016 and another $2.16 effective January 2017 for King and an increase of $0.80 effective January 2017 for Pierce):

 

Fiscal Year New Minimum Wage GF-S Cost Biennium GF-S Cost
FY 2016 $13 effective 2016 (King) $2,950,000  
FY 2017 $15 effective 2017 (King)

$11.15 effective 2017 (Pierce)

$9,293,000 $12,243,000

 

Three minimum wages, and Supported Living can only meet one of them.

 

King County 2016 2017 2018 2019
Seattle minimum wage law $13.00 $15.00 Adjusted annually for inflation thereafter
Supported Living average entry level wage in King County $10.83 $11.32 Reimbursement rate set by the legislature through the biennial appropriations bill. There is no provision for wages to increase annually to keep pace with any of the minimum wages.

 

Pierce  County 2016 2017 2018 2019
Tacoma minimum wage law $10.35 $11.15 $12.00 Adjusted annually for inflation thereafter
Supported Living average entry level wage in Pierce County $10.41 $10.71 Reimbursement rate set by the legislature through the biennial appropriations bill. There is no provision for wages to increase annually to keep pace with any of the minimum wages.

 

State of Washington 2016 2017 2018 2019
State minimum wage law $9.67 Adjusted annually for inflation
Supported Living average entry level wage statewide $10.41 $10.71 Reimbursement rate set by the legislature through the biennial appropriations bill. There is no provision for wages to increase annually to keep pace with any of the minimum wages.