New study reveals low wages, housing insecurity of frontline workers on regional homeless response
Report outlines steps government and philanthropic funders can take to move sector toward a living wage
LOS ANGELES, CA —A new report by the nonprofit RAND Corporation, supported by Social Justice Partners Los Angeles, reveals inadequate pay for frontline workers in LA County’s homeless response sector and lays out a path to a true living wage.
The report found that frontline workers such as outreach workers and case managers often earn less than a living wage, creating stress for the workers and making it difficult to retain staff. The pay is particularly low for the frontline workers who spent time on the street engaging unhoused people. The low pay creates health concerns and housing insecurity for those workers, who already face challenging working conditions.
The result is a culture of burnout and high turnover that hinders the progress made possible by the expansion of funding for housing and services over the past decade. The study also identified systemic barriers to increasing worker pay for the estimated 8,000 people from more than 200 organizations in the region’s homeless response sector.
Researchers concluded that paying homeless response sector workers higher wages could improve the quality of their work by boosting morale, easing stress and reducing turnover.
“We’ve invested billions in housing and services, but if we don’t invest in our workforce, we are perpetuating the problem itself,” said Christine Margiotta, Executive Director, Social Justice Partners LA. “This is an opportunity to bring our workplaces more in alignment with our values, to acknowledge that these wage inequities are a product of centuries of worker exploitation, particularly for Black and Latinx workers, on whose backs this work was built. We must invest in our workforce and enable people who work in the sector to live at the standard of wellbeing that we want for our broader community. The good news is there are fixes funders can make immediately, starting by shifting funding structures that make the problem worse.”
The study used two methods to calculate a living wage in Los Angeles County, considering factors such as rent and other costs. A living wage is defined as the minimum income needed to meet basic needs. Researchers included the high cost of housing in LA County in their calculations of a living wage. The study found that in Los Angeles County workers should be earning a baseline of $64,000 annually to afford a 1-bedroom home or $82,000 annually for a two bedroom home.
The study also analyzed workforce data for the homeless response sector. Frontline workers, meaning those providing the most direct services such as outreach workers, residential counselors and case managers, are some of the lowest earners, with average salaries ranging from approximately $40,000 to $60,000, well below the living wage in Los Angeles.
“I came from homelessness and now I serve the homeless.” said Michael Centeno, ICMS case manager at Housing Works who is living the economic pressures faced by frontline workers. “Even with all the progress I’ve made, getting affordable housing is still my biggest hurdle. I made $700 too much to qualify for a Section 8 voucher so I had to settle for less pay to stay eligible. A living wage would be life changing for me. I could provide a home for my daughter and wouldn’t have to choose between paying a phone bill or gas.”
Nonprofits like Housing Works have limited authority over setting wages because of the restrictive nature of public service contracts that have detailed specifications like a minimum number of clients served, a case-management ratio or a per-bed payment rate.
Over the longer term, the report suggests that pay cannot increase unless government and philanthropic funders commit to providing for higher pay, including allocating money in grants to cover regular cost-of-living increases for frontline workers.
“Housing Works has been sounding the alarm for years that frontline workers in homeless services are struggling. At the same time, funding to support the true cost of this work is not acceptable as the demand of the workforce has tripled, while the reimbursement rates have fallen behind and do not support the extent of the work needed to ensure folks are properly served,” said Celina Alvarez the Executive Director, Housing Works. “Half of our staff have lived experience with homelessness or housing insecurity, and many live in neighborhoods that mirror conditions they see at work. Some are living in permanent supportive housing, crowded housing or living paycheck to paycheck.”
The report outlines several approaches to raise pay in the homeless services sector, both in the short-term and the long-term.
To close the wage gap, the report suggest that private and government funders can:
Cover the full cost of providers’ work when allocating funding instead of employing outdated cost estimates.
Include funds for worker cost-of-living wage increases in contracts and grants.
Cut red tape and increase flexibility so providers can pay workers living wages, focus on the work and decide where best to allocate resources.
“Organizations could work together to publicly advocate for better worker pay and learn from others regarding new resources and supports to aid workers,” said Sarah Hunter, co-author of the study and a senior behavioral scientist at RAND. “Improving pay for workers in the homeless services sector has the potential to improve productivity, morale and retention — all of which could improve client care and continuity of care.”
To understand whether homeless response sector workers in Los Angeles County are earning a living wage, RAND researchers collected information from three widely used job posting websites in August 2022 for positions advertised by homeless services agencies. They also collected publicly available tax information from more than 100 organizations, examining their revenue and the number of employees with salaries above $100,000 annually.
The RAND analysis focused on the frontline workers who work directly with clients, such as social workers, case managers, outreach workers, shelter resident advisors, and housing navigators, as well as managers, such as supervisors, program managers, directors, and officers.
“When it comes to providing services to the most vulnerable members of our community, our business model is cheaper than the government or private sector, and that’s largely because we pay our staff less. That model has to change. We have to be willing to pass on a contract that doesn’t have reasonable compensation for our team members,” said Mark Loranger, President & CEO, Chrysalis. “A living wage is not just the right thing to do for our staff but it is imperative for the health of our sector. Funders can help us by covering the true costs of our services, increasing flexibility, and making multi-year funding commitments.”
“Nonprofit workers should not have to choose between caring for ourselves and caring for our communities,” said Margiotta. “At SJPLA, we’ve set a living wage as a minimum salary in order to pay our workers what it takes to live and thrive in Los Angeles. This is only possible due to our funding structure, which is built on flexible, general operating and multi-year funding. Our partners in the homeless response sector are reliant on contracts and grants that don’t give them the same flexibility. This study shines a light on the ways government and philanthropic funders can create the conditions needed for our workforce and our communities to thrive.”
The report, “Living Wages in Los Angeles County’s Homeless Response Sector,” is available at www.rand.org. Support for the project was provided by Social Justice Partners Los Angeles. Other authors of the report are Lisa Abraham, Samantha Matthews and Alex Sizemore.