Goodwill Pays Some Workers Less than 48 Cents Per Hour.

Goodwill Industries, the national thrift store chain known for primarily employing physically and mentally disabled individuals, has recently come under fire for paying certain employees a wage which some groups are referring to as unfair and exploitative of people with disabilities. Investigations conducted by reporters with NBC News determined that some Goodwill employees have been paid as little as 22 to 48 cents per hour.

As NBC reports:

Goodwill Industries, a multibillion-dollar company whose executives make six-figure salaries, is among the nonprofit groups permitted to pay thousands of disabled workers far less than minimum wage because of a federal law known as Section 14 (c). Labor Department records show that some Goodwill workers in Pennsylvania earned wages as low as 22, 38 and 41 cents per hour in 2009.

“If they really do pay the CEO of Goodwill three-quarters of a million dollars, they certainly can pay me more than they’re paying,” said Harold Leigland, who is legally blind and hangs clothes at a Goodwill in Great Falls, Montana for less than minimum wage. “It’s a question of civil rights,” added his wife, Sheila, blind from birth, who quit her job at the same Goodwill store when her already low wage was cut further. “I feel like a second-class citizen. And I hate it.”

Section 14 (c) of the Fair Labor Standards Act, which was passed in 1938, allows employers to obtain special minimum wage certificates from the Department of Labor. The certificates give employers the right to pay disabled workers according to their abilities, with no bottom limit to the wage… But foes of Section 14 (c) have hopes for a new bill that’s now before Congress that would repeal Section 14 (c) and make sub-minimum wages illegal across the board.

“Meaningful work deserves fair pay,” the sponsor of the bill, Rep. Gregg Harper, R.-Miss., told NBC News. “This dated provision unjustly prohibits workers with disabilities from reaching their full potential.”

There is a pervasive myth that there exists some objective, abstract standard of “fair pay”. Allow me to drill this fact into your skull: If an employee is voluntarily working for a given wage, then that employee is receiving fair pay. I recently discussed this in relation to the similar myth of the “fair price”. Fairness is subjective to the parties involved, not objective to some external standard of fairness.

Some advocacy groups and individuals, such as Rep. Harper, are claiming that Goodwill is not paying their disabled employees a fair wage. There are only two questions to ask in order to determine if this is the case:

1)      Is Goodwill being coerced involuntarily into employing these workers?

2)     Are the workers being coerced involuntarily into being employed by Goodwill?

If the answer to both questions is “No”, then bingo: we have a fair wage. If the disabled employees are working at Goodwill of their own voluntary choice, then any wage they accept will be inherently fair, whether it’s 22 cents, 1 cent, or a bag of dead fruit bats. If they choose to work out of free will, then it doesn’t matter what they’re being paid; the wage is made implicitly fair by their choice to come into work every morning.

The other question to ask is this: If the critics are right and the wages are indeed “unfair”, then why haven’t all the employees already quit to seek work elsewhere? This is probably because it’s very difficult to find work as a person with a moderate to severe disability. It is safe to assume that a majority of employers do not want to hire significantly disabled people, either because the disabled literally cannot perform the job or because the employer does not expect high quality work from the disabled individual. Therein lies a point of silliness; while Goodwill is hiring many of these severely disabled workers, most other establishments are not hiring disabled workers at all. People are criticizing Goodwill for hiring and paying disabled people, but why aren’t they bellyaching over the total lack of disabled employment from 99% of other employers? Perhaps these critics would be happier if Goodwill instead employed no disabled people at all.

That is not the point, however. 22 cents is no hourly wage I’d want to work on, but it doesn’t matter what I think. I don’t work for Goodwill. It only matters what the employer and employee think. If they’re both OK with the arrangement, then there’s no problem. If the employee is upset, then like the aforementioned Mrs. Leigland, they are free to quit.

If they quit, they will likely have trouble finding another job, of course. An employer may refuse to hire a disabled person for the reasons I mentioned earlier, but everybody has their price. If a disabled person offered to work for $3 per hour as opposed to a non-disabled person’s $6, that might be a pretty tempting offer to an employer. They might have concerns over the quality-of-work, but the employer may be willing to take the risk if the deal is sweet enough.

However, disabled people are not generally allowed to do this. Minimum Wage laws screw disabled people over and prevent them from competing for labor. Minimum Wage laws say this: “It is illegal to hire anyone for less than $X per hour.” This has another implicit and more sinister meaning: “It is illegal to sell your own labor for less than $X per hour.” The Minimum Wage law in a given locale might restrict pay to a minimum of $7 per hour. This means the employer cannot hire anyone for less. No matter what kind of person is hired, they must be paid a minimum of $7 per hour. If an employer must pay the same no matter the employee, then who will they choose between two job applicants: A significantly disabled applicant, or a perfectly healthy applicant? All other things equal, it is safe to assume the employer will hire the healthy employee and show the disabled guy the door. Because the disabled applicant is not allowed to make a lower offer on pay to compensate for his disability, he is screwed. The Minimum Wage law says it is illegal for him to make his labor more competitive. The Minimum Wage law screws the disabled worker.

There is a lot more I could say on the Minimum Wage, but this suffices for now. In conclusion, the law should not be changed to force Goodwill to raise wages to an ostensibly “fair” level. The wage is “fair” if both employee and employer are in voluntary agreement. There is no need for a well-intentioned third party to intervene. If workers and advocacy groups want to push for change from Goodwill Corporate headquarters, then they should be totally free to do so; but at no time should the government be involved in the discussion.

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