Government-Funded Sweatshops for Hawaii Workers with Disabilities
by Michael Tada
The minimum wage does not include people with disabilities in Hawaii. They often work for pennies per hour while living on welfare benefits, so that their real income is funded by the taxpayers. They do not want to be dependent on government assistance. They just want to be protected the same way as everyone else. If there is going to be a minimum wage, it cannot exclude an entire class of human beings. Ironically, for workers with disabilities, they would have a greater sense of equality if the minimum wage were completely eradicated than they do under the current system. Since it is unlikely that the minimum wage will ever be eradicated, independent organizations of people with disabilities have taken the stance that they want to be included in those protections.
People with disabilities can legally be paid wages like 3 cents per hour in Hawaii, even though they have been asking for decades to be included in the minimum wage requirements. It comes from Section 14c of the Fair Labor Standards Act, which is federal. Some states, like Alaska, have decided to include people with disabilities in their state minimum wage requirements. Here in Hawaii, organizations of people with disabilities have been begging our state legislature to strike the language in current minimum wage law that excludes them from the minimum wage requirements.
Section 387-9, Hawaii Revised Statutes, subsection (a) specifically provides for the payment of subminimum wages to “individuals whose earning capacity is impaired by old age or physical or mental deficiency or injury, under special certificates issued by the director,” with no minimum at all. Thus, our state government is using our tax dollars to pay employees to monitor and authorize this exploitation of workers with disabilities. Kauai County has completely driven out this practice. The rest of the state could follow suit.
Only certain employers holding special wage certificates from the US Department of Labor are permitted to pay these subminimum wages. The list of certificate holding entities can be downloaded here. Since other employers without these certificates cannot pay subminimum wages, they are undercut by the ones that can. In other words, good local businesses which actually practice aloha and pay their workers accordingly are facing unfair competition from the employers who hold these special wage certificates. Sometimes, they subcontract in order to accomplish something similar, but it allows the certificate holder to become a middleman, still stealing profits away from the good local business. Laws should apply equally to everyone, including all employers, but they do not.
The employers that exploit workers with disabilities argue that, if our government were to eradicate this predatory practice, they would be thrown out on the street or forced to sit at home in front of the television with nothing to do. They argue that they are giving people with disabilities a place to find meaning in life through the therapeutic experience of working, while they earn hundreds of thousands of dollars per year to oversee that therapeutic work experience. This argument is insulting to people with disabilities because it implies that they do not understand the value of money. The leadership of the sweatshops keep much of the money that would have gone to the workers, and the workers live in squalor because the law says that they do not need to be treated like all other human beings. When people with disabilities watch Willy Wonka and the Chocolate Factory, they often see the Oompa Loompas as cinematic depictions of the workers with disabilities in the sweatshops. They watch the same movie as everybody else, but their life experience gives them a different filter. Their people are all too often living like the Oompa Loompas.
Earlier in 2018, the CEO of one of the sweatshops retired, and the lavish retirement party must have cost a fortune. Disability rights leaders were not invited, but they learned that there was prime rib, elaborate hors d'oeuvres, and live entertainment. They noticed construction crews re-graveling the courtyard specifically for that event in the days leading up to it. When leaders of organizations of people with disabilities walk into the executive areas to meet with leadership at the sweatshops, they notice how posh the furnishings are. When they watch new deliveries of furniture and renovations on what seems like a constant basis, they are reminded that scarcity is a choice. The sweatshops argue that they have no money to pay the workers with disabilities, but they show that they have money for all these luxuries.
Some of these sweatshops have supported political campaigns, which has included providing food and drinks for fundraisers or perhaps printing campaign t-shirts and canvassing materials. It may look like an ordinary business transaction, but the sweatshops, due to their extremely low labor costs, can produce these campaign products at extremely low prices. These sweatshops are generally nonprofits with complex business structures, which can be difficult to understand from the outside. They may have a for-profit business with a non-profit arm, where the non-profit arm is the employer of people with disabilities. Some corporations and government agencies include these sweatshops in their supply chains in order to benefit from the reduced labor costs. The public is widely aware of sweatshop working conditions and child labor in developing countries, but too few people know what is happening in Hawaii. Imagine realizing that the campaign t-shirt in your closet was made in a local sweatshop by local workers with disabilities. Imagine how difficult it is for people with disabilities to convince legislators to grant them their equality when those same legislators got elected on the backs of these sweatshop workers.
These sweatshops can be contracted by government agencies to provide employment-related services to workers with disabilities. In no other relationship is it considered a service to give someone a job. These sweatshops for the disabled can receive grants-in-aid from legislative bodies at the city, county, and state levels to help pad their administrative budgets. When disability rights leaders learn that one of these sweatshops leases its facility from the State for one dollar per year, it occurs to them that nobody gives anybody rent for one dollar per year unless they are already in bed with them. A good, honest, local business could be leasing that facility, or it could be used to house another existing government program. Instead, one of these parasitic sweatshops gets the facility. At a bare minimum, our state’s leadership should have the courage to stop using public funds to support this practice in the name of pure fiscal responsibility.
One agency which makes its business by monitoring this exploitation has asked the legislature to increase the monitoring of this practice rather than banning it. To people with disabilities, this looks like an attempt to create more business for themselves. On the one hand, people with disabilities understand that the agency cares about its own revenue. Every business or nonprofit needs to pay its bills, and they have incentives to try to create more business for themselves. On the other hand, they are arguing to keep people with disabilities on the sidelines of society, living on the dole, and those people with disabilities are tired of depending on welfare programs.
Often, our people do not only work in the sheltered workshops; they sometimes live in housing controlled by the same network. In this arrangement, their entire existence occurs under the supervision of their employers and their employers’ partners as they are shuttled back and forth between segregated facilities. In these arrangements, they will often forfeit their welfare benefits, including their food stamps, to the entity controlling their housing, and they report that they eat Saimin while their “caretakers” eat steak. Disability rights leaders find it suspicious when they hear that the entire grocery order is purchased together, which the residents and their caretakers cook together, but which they do not consume equally. Honest people working in such an environment would be sure that, if everyone ate together, they all had the opportunity to eat the same food; honest people would not eat the steak while convincing the people with disabilities that they wanted the Saimin. These workers are functionally owned by the workshops, and they have to beg passersby for money in order to buy candy. Even someone who does not like being begged for money can find it heartbreaking when they know that the workers with disabilities are begging for money because they are stuck in a system of exploitation which obstructs them from acquiring their own money. It seems so contradictory that such a system is government-sponsored in the Aloha State. Taxpayer dollars are being funneled into private pockets, and people with disabilities are the pawns.
Subminimum wages open the door for this kind of exploitation by parasitic employers that drink in government funds and private donations from all angles. They claim to be giving the workers something to do, but the affected population has been asking for equal treatment since this practice began in 1938. If it were true that they just wanted something to do, then they could volunteer in the same facility. If they want to work for pay, then they want to be paid like anyone else doing the same work. Agencies that profit from this system come out to argue why people with disabilities should not have the same rights as everybody else, and too many legislators have listened to the agencies and poured money in their pockets.
When it is convenient, these employers argue that they are training the workers with disabilities. Unfortunately, many of the workers end up staying in the sweatshops for their entire careers instead of transitioning out of them and into real jobs. Often, the sweatshops will try to frame the failure as an inherent consequence of the severity of the employee’s disability, but organizations of people with disabilities do not believe it. This is like every low-performing teacher saying that their students who struggle are all inherently stupid rather than admitting and addressing their own shortcomings. If any worker, regardless of disability, has an employer with an incentive to make the worker look unproductive, that employee is going to look unproductive. Every six months, the employers are required to perform another productivity assessment, which they use to “forecast” the worker’s productivity with a productivity rating. If, for example, the employee performs 25 percent correctly on the assessment, then they are considered 25 percent productive and paid 25 percent of the prevailing wage for their job until the next assessment.
Many of the middle management employees do not have a long tenure in their positions, which is sometimes because their conscience finally drives them out of that industry. It demonstrates that not all of the people working in this system are bad people; they just happen to be working in a dysfunctional system. Many of them will often confide in friends that they feel dirty receiving lofty paychecks while the workers with disabilities receive pennies per hour. Part of that guilt may be what drives them to give the disabled workers money to buy candy when they go around begging for it. Again, the people working in these government-funded sweatshops are not all bad, but the system is highly dysfunctional.
Here in Hawaii, we have a tremendous amount of supernatural and spiritual activity. The sweatshops are no exception. According to many disability rights leaders, the ghosts in the sweatshops are never harmful. The ghosts of the administrators are there to watch over and protect the sweatshops, and the ghosts of the workers are simply lives unlived and potential unmet. Their souls are trapped in those sweatshops, perhaps because they lived their whole adult lives in these shops. If the ghosts of the administrators are there to look out for people, this is some of the strongest evidence possible that they really did care about the people with disabilities in their shops. Unfortunately, the system was and continues to be broken, so the sweatshops continue to cripple the lives of people with disabilities while the taxpayers continue to pay for it.
The employers who wish to pay these subminimum wages must hold special wage certificates from the US Department of Labor. The Wage and Hour Division monitors and oversees this practice, so federal tax dollars are being spent to monitor something which the affected population does not want. At the state level, the Department of Labor and Industrial Relations (DLIR) monitors the lengthy wage calculations and spends staff time and our tax dollars issuing its own certificates.
If a worker with a disability is earning 10 cents per hour and working 30 hours per week, that amounts to a gross pay of $3.00 per week. Nobody is living off $3.00 per week in Hawaii. When the sweatshops argue that ending this practice would put these people out of a job, they often point out that what they have really is not a job, anyway. It is barely the illusion of a job. Frequently, these workers with disabilities are living on welfare programs, and the sheltered workshops pay them so little that they keep living on the dole. Thus, these sheltered workshops effectively have the taxpayer paying their labor costs for their entry-level workers while they stow away money to fluff the CEO salaries.
People with disabilities would love to have more support in advocacy. Like any other minority, they will not succeed in advancing toward equality without support from members of the majority. In the 1800s, the American slaves could not advance toward emancipation without significant support from free men. Women could not achieve an equal right to vote without significant support from men. Jews could not escape the persecution from the Holocaust without significant support from non-Jews. Japanese Americans would not have been freed from the internment camps without non-Japanese Americans wanting them to be freed. To ever be successful, people with disabilities need able-bodied people to join them in their fight to stop this system of low expectations, inequality, and government waste.
Our tax dollars are being used to:
- Give grants-in-aid to these sweatshops.
- Administer the certificates and monitor the wage calculations in a formula that requires more than 50 pages of paper for every worker at least every six months.
- Give priority government contracts to these sweatshops.
- Pay the real living expenses of the workers through welfare programs.
- Give essentially free facility space to these sweatshops.
- Give the sweatshops tax-exempt nonprofit status.
- Pay the sweatshops to provide “services” to their workers with disabilities.
- Address all the problems created in the community when the sweatshops outcompete honest businesses.
To research the issue in greater detail, click here.
The list of certificate holding entities can be downloaded here.