October 26, 2005

Federal Programs Help Executives, Fail Workers With Disabilities

By Dave Reynolds, Inclusion Daily Express with additional reporting by REO.

WASHINGTON, DC--A federal program designed to provide jobs and wages for workers with disabilities -- primarily in sheltered workshops -- is making executives at some non-profit organizations very wealthy, while actually discouraging the placement of those workers in jobs within the community. That's the conclusion of Senate staffers and independent reports from The Oregonian. The reports, released during the traditional "Hire the Handicapped" month of October, are an ironic comment.

The Senate's Health, Education, Labor and Pensions Committee is reviewing the 1938 Javits-Wagner-O'Day Act (JWOD), which requires the federal government to set aside some contracts for non-profits that employ people with disabilities. Those contracts include such things as the manufacturing uniforms, canteens, and chemical suits for the U.S. military, and janitorial services at federal buildings.

Senators on the committee learned that 627 organizations received a total of $2.05 billion last year under the program. While the average wage of the 45,000 workers with disabilities under JWOD contracts was around $9 an hour, the Oregonian found that most of those were paid less than the federal minimum wage of $5.15 an hour, under labor laws that allow people with disabilities to be paid on a piece rate or percentage basis. (See related story.)

At the same time, federal labor data analyzed by the Oregonian showed that pay and benefits for top executives at the 50 most active nonprofits rose 32 percent from 2000 to 2003 -- a period which saw military spending increase with the war in Afghanistan and Iraq. In fact, one in five chief executives in those 50 nonprofits earned more than $300,000 in salaries and benefits, the paper found. Executives in JWOD nonprofits earned salaries ranging from $369,000 to $715,000. The national average salary for most non-profit executives is about $126,000, it noted.

Panelists also learned that the law requires non-profits under JWOD contracts to have 75 percent of the labor performed by workers with severe disabilities. This requirement can discourage those organizations from moving their workers from sheltered workshops to community jobs. In fact, fewer than 6 percent of workers in the program were placed in mainstream jobs, said committee chair Senator Mike Enzi, a Republican from Wyoming.

The committee, chaired by Enzi, said the JWOD was problemmatic in its design. "Very few workers have moved out of employment covered by the Javits-Wagner-O'Day Act and into competitive employment," said the report released by the committee. "While competitive employment may not be an option for all those with disabilities, the Javits-Wagner-O'Day Act was not designed to help them make informed choices or to help them build the skills they might need to make such a transition."

Mike Nelson, who worked for 15 years in sheltered workshops in Colorado, told Senators that he prefers his current job at Hollywood Video.

"You were there and you were just stuck," he said of the sheltered workshops.

An official with NISH, the nonprofit that administers JWOD contracts, argued that the program benefits people with severe disabilities because employers do not want to hire them.

The panel also reviewed the 1936 Randolph-Sheppard Act, which gives priority on government food services contracts to businesses owned by blind people. Last year, about 2,700 blind entrepreneurs participated in the program, generating about $489 million in sales.

Committee staff found that blind-owned companies hired 7,122 employees to work in military cafeterias through their contracts, but that just 615 -- less than 9 percent -- were blind or had another kind of disability.

In September, the National Federation of the Blind filed suit over the Randolph-Sheppard program's poor performance. "The suit alleges that the Dept. of Education fails to administer Randolph-Sheppard as required by law," said the Committee report. "It is clear that the Department of Education's stewardship of Randolph-Sheppard programs has been ineffective." The report noted that there had been a 25 percent drop in the number of licensed blind vendors over the past 30 years and that less than 5 percent of persons hired in the Randolph-Sheppard program are blind. "Thousands of employees are ultimately hired by the vendor or subcontractor but very few of these hires are blind persons," said the report.

"Many opportunities have been lost," it continued. "Many government office buildings contain large food courts, but the committee found "none that provide opportunities to licensed blind vendors."

"It is unconscionable that private companies and employers exploit federal laws to make millions off people with disabilities," said Senator Edward M. Kennedy, a Democrat from Massachusetts.

Read the press release "Investigation Finds Billions Wasted on Programs Congress Intended to Promote Jobs for Blind, Disabled Individuals" (Senate Health, Education, Labor and Pensions Committee)

Read the Committee Report

"Senator says programs boost CEOs, not disabled" (The Oregonian)

Posted on October 26, 2005