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Pennies per hour [Editorial]

Laws and LegislationGovernmentExecutive BranchProductivityMartin O'MalleyMaryland General Assembly

In one of the most consequential matters considered by the Maryland General Assembly this year, lawmakers approved a bill sponsored by Gov. Martin O'Malley to raise the state's minimum wage from $7.25 an hour to $10.10 an hour. Though the final measure was substantially weaker than the governor's initial proposal — its implementation was pushed back by two years to the summer of 2018, for example, and it contains no automatic adjustment for inflation — it at least recognized that the present standard is wholly inadequate to keep low-wage workers out of poverty or do much to stimulate the economy with their spending power.

Yet serious as those defects are, they pale in comparison to legislators' neglect of a class of workers whose employers are exempt from the requirement to pay even the current minimum wage. These are workers with developmental disabilities that prevent them from competing successfully in the wider job market and who labor instead in so-called sheltered workplaces or other supportive settings run by nonprofit groups that aim to provide them with a place where they can pursue gainful employment.

Many of these people want to work and derive a sense of personal satisfaction and accomplishment from the money they earn participating in such programs. But under the U.S. Fair Labor Standards Act, employers are allowed to pay disabled workers far less than the federal minimum wage in return for the employment opportunities they provide — a situation critics charge is rife with the potential for exploitation. As The Sun's Alison Knezvich reported last week, at some nonprofit employment centers for the disabled, workers routinely are paid so-called "sub-minimum" wages that can be as low as 25 cents an hour.

The nonprofit groups that run these operations are aware of this problem but say the issue is complex. Indeed, many of the arguments for paying their employees more involve the same complaint raised by opponents to increasing the minimum wage for workers generally: That increased labor costs will force them to cut back on hiring, resulting in their being able to offer fewer jobs overall for disabled workers.

Currently, groups such as Arc of Maryland and Goodwill Industries calculate wages based on a formula that compares their employees' productivity against that of non-disabled workers performing the same tasks. If, for example, a disabled worker can sort or assemble only half as many items per hour as a non-disabled employee, he or she would be paid just half what the non-disabled employee would receive — even if that amount falls below the legal minimum wage.

Supporters of the formula argue that it isn't exploitative because the nonprofits also provide on-the-job training opportunities, services and support programs that prepare disabled workers to succeed in the wider employment market. But many of these workers never make it that far; instead, they end up in dead-end jobs with low expectations that keep them occupied but never pay more than a pittance for their efforts.

That is why nonprofits that serve the disabled in some states, including Maryland, have already begun moving away from the productivity-based formula for compensating employees. For instance, Arc of Baltimore, which serves about 350 supported disabled employees who work an average 20 hours a week, has phased out the sub-minimum wage for landscape, janitorial and work crew assignments and halted its sheltered workplace program. But the agency still faces challenges providing employment for its most severely disabled clients and it is currently working with other groups to evaluate alternative benefit programs that won't result in its least productive workers losing their jobs.

So far, Vermont is the only state to have succeeded in entirely eliminating the sub-minimum wage for disabled workers, which it accomplished through a process of gradually shutting down its network of sheltered workshops and replacing it with system in which disabled employees work alongside their non-disabled peers at jobs in the community. Maryland could begin a similar transition through direct tax credits to employers who hire disabled workers or by increasing funding to nonprofits that work with the disabled to allow them to partially subsidize jobs in private business.

The precise details will require careful consideration, and the change won't happen overnight. But Maryland should gradually phase out the sub-minimum wage for its disabled workers. There's something wrong about paying people with serious physical and mental challenges just pennies per hour to perform their jobs, no matter how willing they are to do so simply in order to be working.

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Copyright © 2014, The Baltimore Sun
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Laws and LegislationGovernmentExecutive BranchProductivityMartin O'MalleyMaryland General Assembly
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