Worcester Telegram: Senate backs caregiver wage hike after union raps CEO pay growth

By Brad Petrishen
Telegram & Gazette Staff

A new union-backed report rapping CEO salary growth at nonprofits that provide human services – including the Seven Hills Foundation of Worcester – has spurred a local lawmaker to seek pay increases for caregivers.

“Direct care workers should be making, at the very least, $15, if not more, an hour,” said state Sen. James B. Eldridge, D-Acton, who filed a budget amendment intended to increase pay for caregivers. The Senate adopted the amendment last week as part of its state budget bill.

Should the amendment make it into the final state budget, human service agencies, barring individual waivers, would have to put 75 percent of funds from state contracts toward ensuring all their employees are paid a minimum hourly wage of $15.

The impetus for the requirement, Mr. Eldridge said, is a report issued last week by the union for caregivers that accuses human services nonprofits of using state funding increases that were intended to boost “front-line” pay to instead pad administrative costs and executive salaries.

“Increases in state funding for human services, intended to raise wages for front-line workers, have been disproportionately going toward administration cost and exorbitant CEO compensation at some of the state’s largest providers,” SEIU Local 509 concluded in an eight-page report released Tuesday.

[…]

The “poster child” for the problem, the union says, is Worcester’s Seven Hills Foundation. CEO David A. Jordan’s compensation package totals $797,482 – the most of any such CEO in the state – while the workers, the union says, average $12.47 an hour. That’s more than a dollar less than the statewide industry average of $13.59 per hour identified in the report.

“These facts strongly suggest that Seven Hills Foundation’s leadership has prioritized poorly in deciding how to spend the $41.4 million in additional state funds they have received since fiscal 2011, short-changing front-line workers in the process,” the report charges.

Seven Hills, the largest human services provider in the state, declined a request for an interview; in a statement, John N. Altomare, board chairman, said Mr. Jordan has helped grow the organization from a local agency into a nationally respected one with a $210 million operating budget.

“We provide competitive pay and generous benefits to direct support professionals, along with opportunities for promotion and a supportive workplace for those who share our passion for serving our community,” Mr. Altomare said.

[…]

Presented with a set of questions Friday that pressed for additional detail, Bill Yelenak, vice president of policy and development at Seven Hills, said his CEO was unavailable Friday and is the only person authorized to speak to the media.

The council noted that it and its members, including Seven Hills, have worked with legislators to file a bill that would ensure private-sector human services employees earn as much as those who work for the state.

Mike Fadel, director of private sector field services for Local 509, said while the union supports anything that hikes wages, the bill doesn’t call for full wage equity until 2023.

“It’s a slow boat to China,” he said of the approach, noting that the union’s math finds human services nonprofits could afford to hike front-line hourly wages to $15 right now.

According to the study, the top two-thirds of providers collectively posted a $51.8 million surplus in fiscal 2016. If $34 million of that was invested into pay, the union said, the average hourly wage would jump to $15.

“Most provider organizations have sufficient net revenue to bring workers to a $15 per hour benchmark, without additional state funding,” the union wrote in its news release.

[…]  Read the full story here at the Worcester Telegram-Gazette.

Comments are closed.