How does raising the minimum wage impact employment at nonprofits, and are nonprofits finding ways to adapt when they have to increase employee wages? Connie Mao and her coauthors find that following minimum wage raises, nonprofits see a significant decrease in employment that is more severe than the decrease seen by for-profit companies.

While for-profit companies can adapt to minimum wage increases by raising the price of their products, no such recourse is available to nonprofits and many struggle to survive. When policymakers raise the minimum wage, they should consider other ways of supporting nonprofits, such as increasing funding and grants to those at risk of going out of business.