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John's usual--
Statewide & nationwide right now there is a lot of discussion about the US Department of Labor's (DOL) 14c special certificate. CLI held this certificate for 40 years before we lost it in 2016 because we weren't using it. Basically the 14c certificate allows people to earn less than minimum wage if the (mostly nonprofit) employers demonstrate that they are basing a piece-rate wage based on a reasonable and replicable time study AND a provable prevailing wage for that exact type of work. It sounds pretty straight-forward, but there is more to it once you really wade in.
CLI's mission has always been to increase the earnings of people with developmental disabilities. For more than 40 years, we used DOL's 14c special certificate to help us do this. In 2015 we estimated that the work of complying with all the regulatory protocols cost us more than $40K in staff time. In 2015 CLI began paying everyone Ohio's minimum hourly wage instead of using our special certificate because we estimated that the difference in some people earning more than their productivity justified would "cost" CLI less than $40k-- particularly when you factor in that the faster workers would now be capped at the same hourly minimum wage, thereby subsidizing the slower workers. Fast-forward to 2023 and so far it's working out okay. Is it easy? Absolutely not. No business can afford to pay more in wages than it's revenue will support.
Is it possible? So far, yes. Through Firelands Local LLC, we employ anyone who wants to work at $10.11/hour. It's real work though. The only way you pay a crew of 20 people $10+ per hour is if that crew collectively creates more than $200 + taxes & overhead per hour. There is no magic money. One of the bad things about the old piece-rate workshop is that we allowed a lot of unproductive work behaviors because there isn't any cost to company if a worker only did 10 parts an hour. That's not true in any normal workplace, and it sets people up to fail long-term.
One of the things that isn't really talked about much when we talk about piece-rate work is how much more than minimum wage some workers can earn. CLI routinely had client workers earning more than $12/hour because they were going so much faster than the time study and because the piece-rate pay has to be based on a surveyed prevailing wage for an experienced worker for that job. This meant that the people most easily employed in the community could often make more with more flexibility in the sheltered shop, which probably wasn't the incentive we were looking for. Another unintended consequence is that we often allowed people with significant disabilities to keep working on a type of job at which they would most likely never excel. DOL's 14c special certificate gets a lot of focus on the fact that it's less than minimum wage, but I think the real problem is that it became the long-term institutional status quo. It can be a useful tool and the reality is that you can't pay people with money you don't make somewhere-- no matter how much you want to or how good it will make you feel. I worry quite a bit that Ohio's system isn't doing enough to help people learn job skills or develop a strong work ethic. The old sheltered workshop model was problematic because of how we used it, not because it wasn't a useful tool.
I think people get too worked up about the fact that people might be making less than federal minimum wage. In my opinion, the real issue is that people with DD earn less over their lifetime per hour than people without DD. This is a bigger issue than just hourly pay. People with disabilities are often not in the workforce at all and if they are, their hours are far less than full-time. The real issue IMO is that we need to be better at helping people identify long-term goals, build a practical plan to reach those goals, and then effectively execute to progress toward those goals in measurable ways. If we do that, I don't really care if we're asking people to earn less than minimum wage for a while--leveraging a short time financial hit vs. lifetime earnings. It's easy math. The real issue isn't that people might make less than minimum wage in the short term. The real issue is whether we're using subminimum wages as an effective tool to boost lifetime wages for people with disabilities over their lifetime overall. I'm in the middle of putting two kids through college. It's an absolutely terrible short-term investment. It's such a big expense that I'd bet that it's almost 20 years from now before it starts paying off financially. But as parents, we're executing a long-term plan. I don't see any difference between what I'm doing for my kids and what Ohio should be doing for people with DD. If part of that plan is sub-minimum wage training that people don't spend 40 years in, I'm ok with that.
Enough with that soapbox-- it's voting day on Tuesday & Veteran's day is this weekend. I encourage all of you to inform yourselves about the issues on the ballot & vote. Also, please remember that CLI will be open for business on Monday, November 13th for Veteran's Day because we're neither a bank or government agency.
Thanks for all of your continued support. CLI would not be in business today if it weren't for you. Keep washing those hands!
John
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