Thousands of disabled workers in PA paid far below minimum wage

About 13,000 disabled Pennsylvanians are earning an average of $2.40 an hour in a legal use of subminimum wages.

The majority work almost solely with other disabled people, in a world tucked away from the mainstream labor market.

They’re given menial tasks, like folding boxes, shredding paper or packing mail inserts.

Since 1986, there has been no limit to how little they can be paid. And even the federal government, which issues the certificates that allow employers to pay subminimum wages, doesn’t track the hourly earnings of the workers.

An average worker at the Venango Training and Development Center in Northwest Pennsylvania, for example, earns $1.72 an hour for shrink-wrapping mugs or assembling toys. In Montgomery County, workers are baking dog treats for an average of $3.16 an hour at the Center for Creative Works. Boxing screws and preparing mail to be sent to prospective college students yields an average of $1.62 an hour at the Milestone Centers in Monroeville.

The federal program as a whole is under attack at state and national levels.

Does it provide opportunities for people who wouldn’t otherwise have a job? Or does it exploit those who could work for minimum wage if given the chance?

Opponents say people with disabilities are being treated as cheap labor and segregated into dead-end jobs at sheltered workshops. Their integration into the mainstream workforce is the next needed civil rights movement, they say.

“There is ignorance and fear,” said Joyce Bender, founder of Bender Consulting Services in Pittsburgh, which recruits and hires people with disabilities. “It’s not a physical barrier … It’s the feeling that the person will be inferior or that they’ll take too much time.”

Supporters of the work programs say the activity provides socialization, training and purpose for people with disabilities.

“I understand why people say … it’s a disgrace, but it’s just not that way,” said Richard Edley of the Rehabilitation and Community Providers Association, a coalition of state health-and-human-service groups, including several that run sheltered workshops.

“The pay is someone else’s issue, certainly not the workers or their families … People haven’t really looked at the whole picture because they don’t live it.”

PublicSource analyzed 1,600 pages of documents from the U.S. Department of Labor that track the program between June 2011 and December 2013. They provide the first statewide look at the use of a provision that was passed during the Depression and allows employers to pay people with disabilities less than the federal minimum wage, currently $7.25 per hour.

The state Department of Labor and Industry refused to release the documents that the federal government gave PublicSource.

There is very limited oversight of employers who use the program. Of about 3,300 in the nation, 250 were investigated by the labor department in fiscal year 2013.

The issue of wages for people with disabilities has created a rift among their advocates.

“When we’re fighting for people with disabilities, we’re often fighting against outside organizations,” said Curtis L. Decker, executive director of the National Disability Rights Network, which opposes segregated workplaces and subminimum wages. “Now we’re fighting against disability organizations.”

‘The best thing you can do’

Michael Kissel slapped a packing label between the shoulders of a co-worker.

Prank successful, Kissel got right back to work at the Westmoreland County Blind Association, loading boxes of paper onto a dolly to prepare for shredding.

Kissel, 36, has Down syndrome. He lives in a group home with two roommates. He sees this work as a ticket to independence — his own apartment.

“I want to spend time alone,” he said. “Too many people are around.”

That goal may be nearly impossible considering his pay.

He said he earned $57 on a recent paycheck, which covered two weeks. He usually works 25 hours a week.

With that same goal of independent living in mind, Justin Hucko rides the bus to downtown Pittsburgh daily to his full-time job at Highmark, one of the largest health insurers in the country.

Hucko, 33, has Down syndrome and cognitive delays that make learning each task in his clerical job take a bit longer than his colleagues.

“I work harder to get to know it, but then I do it the best I can every time,” he said.

This dedication is one of many reasons Highmark has made hiring people with disabilities at competitive wages a priority for nearly two decades.

A workforce that includes people with disabilities leads to an inclusive environment, innovation and a better understanding of Highmark’s diverse customers, said Sara Oliver-Carter, the company’s vice president of diversity and inclusion.

“Employing people with disabilities is not only the right thing to do, it’s the best thing you can do for the business,” she said. “It has an absolute impact on the bottom line.”

Though the state views the workshops as an extension of treatment and education, the Department of Public Welfare has begun meeting with sheltered-workshop employers to discuss how to make community employment “the priority and preferred option,” spokeswoman Kait Gillis wrote in an email.

About 2,600 people in the state are receiving employment services, which includes help finding jobs and job coaching, she wrote.

Still, social-service providers say the barriers to competitive employment are vast.

Some people need supervision that cannot be easily found in a regular job. Irregular hours could leave them without rides to work or care during the day. Further, because of high unemployment, the general population is taking up many low-skill jobs.

Edley, chief executive of the Rehabilitation and Community Providers Association, said his son Brandon, a 21-year-old with autism and an intellectual disability, has tried stocking groceries, wiping down therapy equipment and doing laundry. Nothing has worked out.

“Skillwise, he can do everything,” Edley said, “It’s what, if anything, in this world does he seem to like that’s also safe.”

Going on 10 months without finding Brandon a job, his family is considering an unpaid farm work program.

Nonprofits and Goodwill

Nonprofits, public agencies, businesses and schools all seek the authority to pay what the government calls “special minimum wages,” wages that purely reflect the productivity of the worker.

You pack more boxes than the person next to you, you get paid more. Have a bad day and you may go home with pennies.

Because of this set-up, about 3,600 disabled Pennsylvanians were paid under $1 an hour during the periods provided. More than 500 weren’t earning enough to buy a 25-cent gumball for every hour they work; however, about the same number of workers was being paid the federal minimum wage of $7.25 or above.

Goodwill Industries most often comes under fire for its use of the provision because of the contrast in sizable salaries many of its executives are paid. A petition on Change.org has more than 172,000 signatures against this practice by Goodwill.

Four programs of Goodwill in Pennsylvania pay about 500 people with disabilities this way, according to federal labor documents. Several of their workers are in enclave programs, which means they perform tasks at regular workplaces under close supervision.

Goodwill Services of Harrisburg paid better than any other group in the state with average hourly earnings of $9.68 for janitorial work at government buildings.

The Goodwill of Southwestern Pennsylvania sent a third of its 106 workers to sort items at retail Goodwill stores and to clean rooms at the Renaissance Hotel in downtown Pittsburgh.

The average hourly pay at those workplaces was $5.42, almost four times what the rest earned for sorting and recycling at its Pittsburgh and Uniontown workshops, where some of the workers were paid as little as 15, 26 and 47 cents an hour.

Ella Holsinger, vice president of human services for the Goodwill SWPA, said the workshop program is a training tool.

“The individuals in training are not employees, they’re in a program,” she said. “We would not be in the business of sorting coat hangers or recycling ink cartridges if it weren’t providing meaningful activities.”

The president of Goodwill SWPA, Michael J. Smith, was paid about $220,500 in the 2011-12 fiscal year.

Ron Kratofil, president of the Harrisburg-based Goodwill Keystone Area and Goodwill Services, earned about $290,000 in the 2012-13 fiscal year.

Associated Production Services, a packaging-services nonprofit in Bucks County, has 520 workers with disabilities being paid subminimum wages, the most in the state. They’ve paid subminimum wages since 1977.

Their workers earned an average of $1.33 an hour, according to Associated’s latest application.

Its 2012 tax form shows the executive director, Jonathan Belding, received nearly $207,000 in salary and benefits.

“It is the only just thing for all parties concerned,” Patricia McGonigle, director of habilitation, wrote in an email. “They need to be paid for what they produce, while at the same time, the company needs to maintain fiscal sustainability.”

The message is ‘shut them down’

People on both sides of the fence seem to want what’s best for people with disabilities, but they don’t agree how to get there.

Requiring a federal minimum wage could be the death knell of the workshops, some say, because workshops would have to bid more for contract work.

“If you say you must pay, the message you’re sending is shut them down,” Edley said.

It’s a grave message, considering the unemployment rate among people with disabilities is double that of the rest of the population.

Higher wages would also chip away at government assistance most of their workers rely on for healthcare and other expenses, they say. Every dollar after $85 in earnings lowers Supplemental Security Income payments, for example.

Stacey Dowden, a director of disability services at Milestone, said closing workshops would deprive them of many opportunities.

“We’re a lot more than a place for people to work, and I think that really gets lost in the argument because the focus turns to the pennies that people are earning,” she said.

Kim Marshall, a 42-year-old with an intellectual disability, gained a sanctuary when she joined the Milestone work center six years ago.

She used to work at Denny’s and Bob Evans restaurants as a busgirl: “It was hard because people made fun of me.”

A proposed state bill would provide tax credits to businesses that contract with work facilities for people with disabilities. The bill has not moved out of committee. Its sponsor, state Sen. Pat Browne, R-Lehigh County, did not respond to requests for comment.

Groups advocating for higher wages and integrated employment have experienced a few victories in the past six months.

President Barack Obama specifically included workers with disabilities when he raised the minimum wage to $10.10 for people employed under all new federal contracts in a February executive order.

In March, the Rehabilitation Act of 1973 got some teeth with new rules that, among other initiatives, require federal contractors and subcontractors to set an affirmative-action goal of 7 percent of employees with disabilities.

“It was never taken seriously and never enforced,” said Bender. “For the first time in my whole career, all these new companies are calling me, and I believe this is the thing that will finally springboard employment for people with disabilities.”

Another bill, the Workforce Innovation and Opportunity Act, was signed into law by the president on July 22 with measures that would prevent young people with disabilities from being funneled into subminimum-wage work.

Decker of the National Disability Rights Network said the provisions put pressure on schools and providers.

“I think we’ve become so used to this [workshop] model that we forget the vast majority of the folks in there could, with proper supports and training, function and make at least a minimum wage,” Decker said.

‘I feel hopeful’

Moving people with disabilities out of institutions and into neighborhoods took an historic effort, and some groups believe the path to integrated employment will be much the same.

Pittsburgh resident Cheryl Dennis is counting on progress. Her son, 11-year-old Spencer, has a speech disorder and coordination problems. “His brain has a hard time telling the body what to do,” Dennis explained.

Spencer wants to be a bus driver. That aspiration might change, but Dennis’ vow to steer him away from low-wage work won’t.

“Knowing what I know about the history of people with disabilities and where things are headed, I feel hopeful for Spencer,” she said. “The horror is that is where my kid would have automatically gone if I raised him 20 years ago.”

Reach Halle Stockton at 412-315-0263 or hstockton@publicsource.org.

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