Wage Suppression in Oregon’s Social Service Nonprofits – Summary Sheet
The research shows that a pronounced wage gap exists between the nonprofit sector as a whole and the for-profit and public sectors, validating that wages are suppressed in Oregon’s social service nonprofits. Further research will be necessary to study the causes of this wage gap, but it is well documented that the majority of social service nonprofits rely on government contracts and grants to fund the work they implement.
Are Wages Suppressed in the Nonprofit Social Services Sector? A Case Study in Oregon
This paper examines compensation and retention rates between: 1) Oregonians in the nonprofit sector, with an emphasis on those working in social service jobs, and 2) Oregonians in the for-profit and public sectors working in similar occupations. Using data from the American Community Survey (ACS), the Current Population Survey (CPS), and the U.S. Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS), we find that, controlling for confounding factors, individuals working in the nonprofit sector in Oregon had wages that were approximately 5 to 15 percent lower than their counterparts in the for-profit sector. We provide context from the economics literature for our findings because the value of proposed solutions for closing the wage gap depends on an accurate interpretation of what the wage gap means (e.g., does it reflect disadvantages or preferences?). We conclude that the nonprofit wage gap in Oregon is problematic, at least in part, and that policies that can reduce the gap would improve societal welfare by more accurately tying work to compensation in the nonprofit sector.