Austin Public Health updates living wage implementation plan for social service contracts

The Austin Public Health Committee convened on May 7, 2025, to discuss the implementation of a living wage requirement for social service contracts. The meeting focused on updates regarding the city's multi-year plan to apply a living wage of $21.63 per hour for employees working on city-funded programs.

The committee began by outlining the guidance received during the budget process, which directed Austin Public Health to collaborate with local entities, including Travis County and Central Health, to establish consistent contract requirements for the living wage. However, discussions revealed that Travis County would not be able to update their contract requirements, and Central Health indicated discrepancies in funding for similar services, complicating collaborative efforts.

To gather public input, staff released a living wage resolution survey, which was open for 28 days. The survey results indicated that 56% of respondents reported that 0-10% of their employees earned less than the living wage, while 17% indicated that over 50% of their employees fell below this threshold. The survey also assessed the potential impact of implementing the living wage, with 62% of respondents suggesting minimal impact on operations, while 29% expressed concerns about significant changes or the inability to sustain current programs.

The committee discussed the financial implications of raising wages, estimating that an average of $182,000 per contract would be necessary to meet the living wage requirement. With 54 respondents, this could result in a total impact of approximately $9.9 million for the fiscal year 2026.

Additional considerations included the need for annual cost-of-living increases and the potential effects on salary compression and organizational sustainability. The committee proposed two options for moving forward: applying the living wage requirement to specific social service contracts where the city is responsible for service delivery, estimated to require about $530,000, or implementing a 3% annual cost-of-living increase across all social service agreements, which would amount to approximately $2.3 million.

The meeting concluded with a commitment to finalize the list of social service contracts for consideration and to continue discussions on the financial implications of the living wage requirement. The committee emphasized the importance of ensuring fair wages while maintaining the viability of social service programs in Austin.