Some Goodwills and other organizations have stopped paying workers with disabilities less than the minimum wage. Despite the lucrative salaries of its top executives, Goodwill Omaha continues the controversial practice.

By Henry J. Cordes / World-Herald staff writer

Sunday, October 23, 2016

The Goodwill affiliate in Iowa City for years paid hundreds of its workers with significant disabilities less than the minimum wage, which is legal under a Depression-era federal program.
But in March, officials with the charity decided to drop the controversial practice. Now workers who were previously paid as little as $4.50 an hour are paid at least $8.39 — well above Iowa’s federal and state $7.25 minimum wage.
"We felt it was the right thing to do," said Patricia Airy, CEO of the Goodwill affiliate.
The Iowa City Goodwill is not the only organization around the country that has decided that employing the disabled in so-called "sheltered workshops" has passed its time.

However, federal records indicate 61 other Goodwill affiliates nationally recently had active or pending certificates to employ people at less than the minimum wage. That includes Goodwill Omaha, which federal records indicate has recently employed 110 workers in its program.

The payment of such low wages comes as Goodwill Omaha and many other Goodwill affiliates pay their CEOs lucrative salaries, including more than $400,000 a year for Omaha CEO Frank McGree.
McGree and Goodwill Omaha officials declined to be interviewed for this series. In the past, the nonprofit and other Goodwill officials nationally have defended what they call the "special minimum wage" program, saying it gives opportunities to severely disabled people who otherwise would not work at all.
"Furthermore, they would be denied the tangible and intangible benefits of work: independence, participation, dignity, self-esteem and sense of accomplishment, among others," reads a 2013 statement from Goodwill Industries International.
However, numerous organizations supporting people with disabilities are fighting the program, saying that it’s discriminatory, exploitative and degrading. They cite cases where some workers have been paid less than $1 an hour for their labors.

Typically, employers who use the program regularly put disabled workers on the clock, testing to see how productive they are at their task. That’s then compared to a benchmark for a nondisabled worker, with pay docked accordingly. Or some employers pay a "piece rate," paying disabled workers just for what they produce.
John Pare of the National Federation of the Blind says the program is archaic, and it can be inherently unfair to disabled workers. In some cases, a disabled worker paid piece rate receives no pay when a machine breaks down, while an able worker in the same circumstance still gets a regular hourly wage.
"Should we have a two-class system in America?" Pare asked. "The only people who tend to believe this is a good idea are the employers paying less than the minimum wage."

Day 1: Sunday
» Goodwill Omaha has some of the most staggering executive pay you’ll find in the nonprofit world.
» Goodwill does need to attract and retain leaders who know the business world, but local experts on nonprofits are taken aback at the generous level of compensation.
» The repackaging of hair rollers appears to violate rules for “Made in America” labeling, Matthew Hansen writes.
Day 2: Monday
» Omaha charity takes a different approach from its regional counterparts in spending and serving the public.
» Matthew Hansen’s interviews with former employees reveal frustration with what they see as a broken culture.

He says the key to employment of people with disabilities is to find them work that suits their abilities and then give them the right training and accommodations, not pay them less.
Federal records suggest more than 2,000 employers nationally have active or pending certificates to pay less than the minimum wage, believed to cover more than 200,000 disabled workers.
But those numbers are falling. Several states have banned the program in favor of those helping the disabled find jobs paying better wages. Other employers are choosing to end it on their own — including many Goodwill affiliates.
The Iowa City and Houston Goodwills both dropped the program this year. A World-Herald search of federal records suggests at least 10 other Goodwill affiliates have also recently ended theirs. Pare said the fact that over half the nation’s more than 150 Goodwill affiliates don’t pay subminimum wages suggests the others could — and should — drop it, too.
"Half are doing the right thing," he said. "Clearly, it can be done."
henry.cordes@owh.com, 402-444-1130

Goodwill Omaha executive pay: An investigative series

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