Oakland's Youth Employment Partnership spends roughly $1.8 million a year to give 800 hard-to-employ teens steady minimum-wage jobs that keep them away from vice and encourage them to appreciate a hard day's work.
But the nonprofit could be forced to cut the jobs it offers by 30 percent next year if Oakland voters approve a plan in November to raise the city's minimum wage from $9 to $12.25 an hour starting March 1, its executive director said.
Because nonprofits have only a fixed amount of grant money each year, the ballot measure, called Lift Up Oakland, could have the unintended consequence of making it harder to hire and train thousands of at-risk and needy workers - teens, parolees and those with limited work experience, nonprofit leaders say.
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Their solution, a competing wage plan that calls for a more gradual increase in the minimum wage for nonprofits and small businesses, goes before the council Tuesday night.
Proponents hope the ordinance will sap momentum from Lift Up Oakland when that measure goes before voters in November so that nonprofits can ease into paying higher wages. If the ballot measure passes, it would become city law even if the council approves its own wage plan.
Critics say the problem with the wage increase on the November ballot is that it doesn't exempt nonprofit job-training programs, as similar proposals in other cities have done. If the measure passes, every employer in Oakland would be required to pay employees $12.25 an hour.
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"It is not like grant funding is that easy to come by," said Councilwoman Pat Kernighan, who proposed the city ordinance."Job-training funding for programs has shrunk every year for the last five years."
Under the ordinance, minimum wage for teen trainees, apprentices and employees of small businesses would rise to $10 in July 2015 and increase to $12 by July 2018. The minimum wage would continue to rise to match inflation.
But supporters of Lift Up Oakland say that having the minimum wage rise all at once would help everyone - including the teens who need job-training programs.
"We got to get people out of poverty, and the only way to do that is to address the issue of income inequality," said Gary Jimenez, president of the Lift Up Oakland Coalition.
Falling short
If the ballot measure passes, businesses might raise prices or find ways to spend less to accommodate the higher expense. But nonprofit officials, who rely on donations, grants and government reimbursements to pay workers $9 an hour, said it will be difficult, if not impossible, to raise enough money fast enough to pay all workers $12.25 an hour.
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Michelle Clark, head of the employment partnership, laid out the problem in stark terms: "That program for 100 kids - that will drop to 70 kids. And we have 300 requests to be in that program," she said. "That's going in the wrong direction."
Like Clark, the heads of several nonprofits - including Goodwill Industries of the East Bay and Youth Uprising, which offers job training to about 2,800 Oakland teens - have said that while they support sharp increases in the minimum wage for regular businesses, Lift Up Oakland could suffocate their paid job-training programs.
"It would mean that fewer people would have access to paid training ... since we would need to cut significantly that number of paid training hours," John Latchford, the president and CEO of Goodwill Industries of the Greater East Bay, wrote to Oakland's City Council.
Too much at once
Olis Simmons, president and chief executive officer of Youth Uprising, said she supports increasing the minimum wage, but the all-at-once increase proposed on the ballot measure would leave her with less money to "up-skill people."
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But while job-training programs are important, many teens desperately need more than $9 an hour, said Jimenez of the Lift Up Oakland Coalition.
"A lot of these kids are bringing money into their households," he said. "Their households are depending on that money, too. This is not disposable income. This isn't like they're 20 years old and living at home by choice."
Benefiting thousands
Jimenez pointed to a study by the UC Berkeley Center for Labor Research and Education that found raising Oakland's minimum wage would benefit 48,000 workers.
"We should be looking at them and saying, 'If we want to get them off the streets and out of trouble, we have to create jobs for them, and we have to do a living wage,' " Jimenez said.
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Councilwoman Libby Schaaf, who is running for mayor and backs Lift Up Oakland, said she didn't doubt that a quick increase to the minimum wage would "be disruptive."
"This is a big, bold change that is worth it," she said.