Goodwill exploits workers with penny wages [English Subtitles]

Goodwill pays some disabled workers far less than the minimum wage, while some executives earn hundreds of thousands of dollars.

[Brian Williams]
It's a part of American life, when something is no longer useful to you,

you give it to Goodwill. You drop it in the Goodwill box,

perhaps in the supermarket parking lot near you,

and you've then done something good, with something you no longer consider good.

You may know that Goodwill donation centers employ disabled workers,

but you may not realize that some of those workers are legally exempt from minimum wage protection.

That means that some end up making just pennies per hour.

It is legal, but tonight, Harry Smith takes on the question of fairness.

[Harry Smith:]
Goodwill, a place where you feel good about leaving your old clothes,

a place where you feel good about shopping in a tough economy.

Goodwill's mission is to give jobs to people who are down on their luck, or have a disability.

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 is something going on that many disabled people do not feel so good about.

People with disabilties working for less than the federal minimum wage

of $7.25 an hour. There are even places in America where Goodwill workers earn as little as $0.22 an hour.

And because of a loophole in the Fair Labor Standards Act of 1938,

it's all perfectly legal

[woman's voice:]
That's ridiculous.

[Harry Smith:] Harold and Sheila Leigland have been married for more than twenty years.

Both are blind and both have college degrees.

Sheila worked at the Goodwill facility in Great Falls, Montana, earning about $3.50 an hour for four years.

She says she quit last summer when they lowered her wage to $2.75 an hour.

[Sheila Leigland:]
That $2.75, it would barely cover my cost of getting to work. I wouldn't make any money.

[Harry Smith:]
They call the facility "the plant," and Harold still works there.

It operates what's called a "sheltered workshop."

Here the disabled get virtually guaranteed employment, but they are not guaranteed minimum wage.

And that doesn't matter to some of the workers. Jeremy Davidson loves it here.

[Harry Smith:]
You love it here?

[Jeremey Davidson:]
I love it here, more than the world, more than the world yes. I also love, um, NASCAR, but this and NASCAR are my two favorite things in life.

[Harry Smith:] 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?

[Harold Leigland:]
$5.46 an hour.

[Harry Smith:]
$5.46 an hour?

[Harold Leigland:]
Yeah, and that could change in a few months.

[Harry Smith:] It could change because sheltered workshop wages are determined by a speed test every six months.

Goodwill staff use a stop watch to see how many items of clothing

Harold can hang in a minute.

[Harold Leigland:]
You're allowed two mistakes, and then anything else after that,

your quality is considered poor.

So, your perecentage of wage goes down.

We talked with three advocates for the disabled,

all of whom are disabled themselves.

[Dr. Mark Mauer] I wouldn't pay anyone a sub minimum wage because I'm not willing to tell people day after day,

week after week, month after month, and year after year that they are not worth it.

Dr. Mark Mauer, President of the National Association of the Blind,

has been leading the fight to ban sheltered workshops altogether.

[Dr. Mark Mauer] The sheletered workshop system takes people and systematically tells them

they're not as good as the rest of the workforce.

[Harry Smith] We found Department of Labor records showing hourly wages for Goodwill workers in Pennslyvania

as low as $0.22 an hour, $0.38, $0.41, $0.44, the list of wages under $2.00 an hour goes on and on.

But that's only part of the story.

While some Goodwill workers are making pennies,

their bosses are faring a bit better.

A half-dozen regional Goodwill CEO's 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 dollars in salary

and deferred compensation.

[Harry Smith] For someone who is an advocate for the disabled, how does that sit with you?

[Cathy Steffke:]
Is my head spinning right now? Because that's how it sits with me.

Cathy Steffke once worked at a Goodwill.

She's a disability rights activist, based in Wisconsin.

[Cathy Steffke:]
How can anybody possibly go into human services thinking they're going to get rich.

And do so, o-on, on, on the labor of the most vulnerable citizens that we have.

How can that be fair or, or ethical?

[Harry Smith:]
What's more, Goodwill grosses almost $5 billion dollars a year.

Advocates are outraged that a tax exempt, non profit 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?

[Ari Ne'eman:]
It is exploitation.

It is unquestionably, and clearly exploitation.

Ari Ne'eman is President of the Autistic Self Advocacy Network.

[Ari Ne'eman:]
They're able to collect charitable donations,

they're able to present themselves as doing good work,

and yet they don't have to do right by their workers.

[Harry Smith:]
Ari, let me ask you this:

If I'm an executive from Goodwill, one of my arguments is, "I'm paying wages that are commensurate with the ability

of the people who....

you smile,

....with the people I have in my,..in my workshop".

[Ari Ne'eman:]
I think, that if you had a person with a stopwatch, um, standing outside your office on any given day,

and assess as compared to some hypothetical, um, other broadcaster,

how productive you are,uh, I-I think the result would be somewhat arbitrary.

Jim Gibbons, President and CEO of Goodwill Industries International, dismisses Goodwill's critics.

[Jim Gibbons:]
When the elitists, uh, try to define somebody else's success, that that's not only insulting to me

in terms of the work that I'm trying to accomplish,

but to the individuals who, who have goals that they have established for themselves.

[Harry Smith:]
So, the people who we've talked to, who say that this is a civil rights issue, you, you would say they're elitist?

[Jim Gibbons:]
I would say that every individual has a right to define success for themselves.

[Harry Smith:]
Gibbons, who himself is blind, made more than a half a million dollars in 2011.

He insists, Goodwill's payscale and sheltered workshops is fair.

As I look at some of the hourly wages: $1.00, $1.52, $0.58 an hour, $1.30,

this just goes on and on and on.

[Jim Gibbons:]
You know, Harry, no matter what the person's, uh, issues are,

whether it's a disability or anything else, what you see is, uh, everything is

focused on the individual, their goals, their skillsets and their abilities.

[Harry Smith:]
Your regional CEOs, some of them are making a half million dollars or more,

how do you justify that disparity?

[Jim Gibbons:]
I think these leaders are having a great impact in terms of new solutions,

in terms of innovation, and in terms of job creation.

[Harry Smith] I hear what you're saying, but I'm looking at a company that makes so much money.

Looks to me like you've got the money to pay these people minimum wage.

[JIm Gibbons:]
The, the, the whole driving force of why Goodwill has such a major impact in the communities that they're a part of

is because Goodwills in our history have always been market driven. It really is just that simple.

If you don't let that happen, then you're not around for the next day.

[Harry Smith:]
Gibbons says, with a total workforce of more than a 110,000 people,

Goodwill employs between 7 and 8,000 people with disabilities, whose pay, according to the

Fair Labor Standards act, can be below minimum wage.

He says, Goodwill gives people with the most severe disabilities an opportunity to work,

an opportunity they would not otherwise have.

He says for many of the people who make less than minimum wage, the experience of work is

more important than the pay they get.

[Jim Gibbons] It's typically not about their livelihood, it's about their fulfillment, it's about being a part of something,

and it's probably a small part of their overall program.

[Harry Smith] But for Harold and Sheila Leigland, Gibbons words sound out of step with their complaints.

They say, they do need the money and they could be productive in their own right with the right job.

A job better suited to their abilities.

[Sheila Leigland:]
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 poo-pooed.

[Dr. Mark Mauer:]
It's the obligation of management to figure out how to use people's talents, not the obligation of the worker

to fit into some box, that the manager dreams up and says, regardless of your disability, this is your job,

and if you're not any good at it, that's your fault not mine.

[Harry Smith:]
And is that the way you feel some of these Goodwills operate?

???:
It is exactly how they operate.

[Sheila Leigland:]
It's a question of being able to be treated like a first class citzen in this country,

and have the rights of other people to work to obtain the things they need,

and to be the people that they can be.

It's a civil rights issue for me.

[Brian Williams:]
Hmm, 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.

[Harry Smith:]
Yeah, this is a conversation that has been going on in this community for some time now,

and we wanted to, maybe, make the conversation a little bit bigger.

And on some levels it's so black and white on all the 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 sheltered workshop

that may be really profound and maybe a life changing, and life enhancing experience.

But, for these disabled advocates, they say that model is out of date.

That goes back to a different time in our country, and it's time to get into the 21st century.

[Brian Williams:]
Powerful story well told. Thank you pal.

[Harry Smith:]
Thanks for the opportunity.