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Workers in the nonprofit human services sector are underpaid: report

Despite being better educated than their private- and public-sector counterparts

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Although social workers, counselors and other human services workers employed at nonprofit agencies across New York City are generally better educated than their public-sector counterparts, they typically earn significantly less, according to a recent report from The Center for New York City Affairs.

Among full-time human services employees working at nonprofits in the city, 61 percent have a four-year college degree or a postgraduate degree, compared with 50 percent of human services workers employed in government agencies. But human services workers at the nonprofits earned an average salary of $53,600, or 28 percent less than the $74,000 earned by human services employees working in the public sector. With fringe benefits factored in, nonprofit workers earned 31 percent less compared to human services workers in the public sector.

The report found that the median pay for those in the core human services — which the study’s authors define as those who work in  human services programming funded by the City — with a bachelor's degree was $55,900, while those working in the public sector and private sector earned annual salaries of $71,200 and $83,500, respectively. Among those with a postgraduate degree, the average salary was $69,600, compared with $98,000 for public-sector workers and $111,300 for private-sector workers. 

Notably, the data did not include salaries for early childhood educators or home health care workers.

1 in 5 on food stamps

For decades, the city has increasingly relied on nonprofits to provide mental health, substance abuse and other key human services, with $7.8 billion allocated for contract spending for Fiscal Year 2025. Hiring within the human services sector has grown significantly – payroll spending on human services workers grew by 33 percent from 2019 to 2024, largely because of growing demand for such workers due to an increase in homelessness during the pandemic, as well as the migrant crisis.

However, the city has typically underfunded these contractors, covering about 80 percent of the costs of delivery, which has contributed to low wages in the sector. Additionally, many contractors have experienced monthslong delays receiving reimbursements from the city and the state.

The Center's James Parrott, who authored the report, called on the city to ensure that nonprofit human services employees earned the same pay and benefits as their counterparts working in government.

“The City should align job titles and pay in nonprofit contracted organizations with similar education and responsibility with job titles in the City’s health and human services agencies which are covered by long-standing collective bargaining agreements,” he wrote.

The pay gaps disproportionately affect women and in particular women of color, who make up the majority of the workforce. Two-thirds of human service workers in New York City are women, and 52 percent are women of color, the report, citing Census data, found. Among employees with bachelors and postgraduate degrees, women of color made up 55 and 56 percent of degree holders, respectively. 

The report found that lagging wages in the sector have driven racial pay inequities.

It also found that in 2023, the average annual salary for the core human services industry — including social work — was $36,688, making it the third-lowest-paid industry among the city’s 10 largest low-paying sectors. The lowest-paid sectors are the restaurant and retail industries.

Nearly one in five — 19 percent — of nonprofit workers received food stamps, compared to 11 percent of human services workers in the public sector.

Notably, nonprofit workers with less than a high school diploma faced a 20-percent pay gap compared to their public-sector counterparts, earning an average salary of $36,600, but were paid 6 percent more than workers in the private sector.

In March 2024, Mayor Eric Adams announced a $741 million cost-of-living adjustment for 80,000 human services workers, which included three 3-percent increases. Parrott called for automatic COLA adjustments for nonprofit workers based on pay increases negotiated with civil-service unions representing human service workers such as District Council 37. 

“City government bears responsibility for this substantial compensation disparity. The City  decides on the services to be provided, and it controls the contracting process, usually with an eye toward minimizing costs – regardless of the impact on the workforce,” the report stated. “The frontline nonprofit human services workforce time and time again has selflessly demonstrated their tremendous commitment to helping New Yorkers in need. In return, they more than deserve equitable compensation.”

clewis@thechiefleader.com

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