Rock Center   |  June 21, 2013

Activists say Goodwill exploits workers with penny wages

Goodwill pays some disabled workers far less than the minimum wage, while some executives earn hundreds of thousands of dollars. It’s all perfectly legal, according to the Fair Labor Standards Act. Rock Center's Harry Smith goes behind the scenes at Goodwill to investigate.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> of american life when something is no longer useful to you, you give it to goodwill , you drop it in the box perhaps in the supermarket parking lot near you and you've then done something good with something you no longer considered good. you may know that they employ disabled workers but you may not realize that they're legally exempted from minimum wage protection. but tonight we take on the question of fairness.

>> goodwill , a place where you feel good about leaving your old clothes. a place where you feel good about shopping in this economy. goodwill does a lot of good, no question about it. but in back rooms like this one in great falls, montana, out of sight of donors and shoppers, there's something going ton that many people adopt feel so good about. people with disabilities working for less than 7.$7. $7.25 an hour. and because of a loophole in the fair labor standards act of 1938 , it's all perfectly legal.

>> that's ridiculous.

>> these people are married for over 20 years. both are blind and both have college degrees. she work sd at the goodwill in great falls earning about $3.50 an hour and she quit when they lowered her wage at $2.75.

>> at that, it would barely cover my cost of getting to work. i wasn't making any money.

>> they call the facility the plant and harold still works there. it operates what's called a sheltered workshop . here they get virtually guaranteed employment but not guaranteed minimum wage . jeremy davidson loves it here.

>> i love it here more than the world. i also love nascar, but this and nascar are my two favorite things in life.

>> but for others, it is a dead end . a job of last resort in a world in which there are few options.

>> what's your wage right now.

>> $5.46 an hour.

>> $5.46 an hour.

>> and that could change in a few months.

>> it could change because they're determined by a speed test every six months. they use a stopwatch to see how many items he can hang in a minute.

>> you're allowed two mistakes and anything after that your kwaulgt is considered poor. so your percentage of wage goes down.

>> we talked with three advocates for the disabled all of whom are disabled themselves.

>> wouldn't pay anybody subminimum wage because i'm not willing to tell people that they're not word it.

>> dr. mark mauerer, president of the national federation of the blind has been leading the fight to band sheltered workshops all together.

>> it takes people and systematically tells them they're not as good as the rest the work force .

>> we found the department of labor records showing hourly wages for goodwill workers in pennsylvania as low as 22 cents an hour, 3 crepts, 41 cents, 44 cents. ment list of wages under $2 an hour goes on and on. but that's only part of the story. while some goodwill workers are making pennies, they're bosses are fairing a bit better. a half dozen regional ceos, make $400,000 a year or more. many others make nearly that much. in 2011 the ceo of goodwill industries of southern california took home $1.1 million in salary and deferred compensation.

>> for someone who is an advocate for the disabled, how does that sit with you?

>> is my head spinning right now? . how can anybody possibly go into human services thinking they're going to get rich? and do so on the labor of the most vulnerable citizens that we have? how can that be fair or ethical?

>> what's more, goodwill grosses almost $5 billion a year. advocates are outraged that a tax exempt nonprofit that gets hundreds of millions of dollars in government funding does not pay some of its workers minimum wage .

>> does it feel like exploitation to you?

>> it is exploitation. unquestionably and clearly exploitation.

>> he's president of the --

>> they're able to collect charitable donations and present thechlss as doing good work, but yet they don't have to do right by their workers.

>> let me ask you this. if i'm an kpem e executive of goodwill , one of my arguments is i'm paying wages that are commensurate for the people who i have in my work shown.

>> i think that if you had a person with a stopwatch standing outside your office on any given day and assessed as compared to some hypothetical other broadcaster, how productive you are, i think the result would be somewhat arbitrary.

>> jim gibbons , president and ceo of goodwill industries international dismissed goodwill 's critics.

>> when the elease tift try to define somebody else's success, that's not only insulting to me and the work that i'm trying to accomplish by the individuals who have gomes that thief established for themselves.

>> so the people that we've talked to who say that this is aism rights issue, you would say that they're elitist?

>> i would say that every individual has a right to define success for themselves.

>> gibbons who is blind made more than half a million dollars in 2011 . he insists it's fair.

>> as i look at some of the hourly wages, 1 dollar, 15 $2.00, 58 cents an hour. this goes on and on and on.

>> you know what, no matter what his disability, what you see is everything is focused on the individual, their goals, skill setted and their abilities.

>> your regional ceos, some of them are making half a million dollars or more. how do you justify that dispari disparity?

>> i think these leaders having a great impact in terms of new solutions, innovation, and job creation .

>> i'm looking at a company that makes so much money. it looks to me like you've got the money to pay these people minimum wage .

>> the whole driving force and why goodwill has such a major impact in the communities that they're a part of is because goodwill in our history have always been market driven. it's really that simple. if you don't let that happen, then you're not around for the next day.

>> he says with the total work force of more than 110,000 people, goodwill kboiz between 7 and 8,000 people with disabilities who pay according to the fair labor standards act can be below minimum wage . he says they give the people an opportunity to work, an opportunity they wopt otherwise have. i says for many of the people who make less than minimum wage , the experience of work is more important than the pay they get.

>> it's typically not about their livelihood, it's about their fulfillment. and it's probably a small part of their over all program.

>> but for these two, they sound out of step with their complaints. they say they do need the money and with the right job, could be productive.

>> i thought that it would be a really good thing if i could answer the phone at the plant and take messages and deliver messages. but that was pooh poohed.

>> it's the obligation of management to figure out how to use people's talents not the opposite gags of the worker that to fit in a box. and.

>> is that the way you feel some of these goodwills operate?

>> it is exactly how they operate.

>> it's a question of being able to be treated like a first class citizen in this country and have the rights of other people to work to obtain the things that they need and to be the people that they can be. it's a civil righted issue for me.

>> harry smith here with us. you said you set out just to shed light on this and some of this just don't seem right.

>> yeah. this is a conference that's opinion going on in this community for some time now and we wanted to maybe make the conversation a little bigger. on some levels it's so black and white , and other levels it certainly is grey if you're the family member of a disabled person who finds some way to get more self-meaning in their life by being able to get a job in a shelters workshop, that maybe really profound and life changing. but for the disabled advocates, they say that model is out of date. that goes back to our different time in our country.

>> powerful story. well told. thank you.