THE BLOG

Goodwill Minimum Wage Loophole Will Shock You

05/15/2013 01:59 pm ET | Updated Jul 15, 2013
AP

Goodwill Industries is the worst charity in America. Yes, the same Goodwill that you just gave all of your old clothing to. Yes, the same Goodwill where you bargain-hunt on the weekends. Yes, the same Goodwill that Beyoncé is encouraging her fans to support with "donation drives at her North American concerts."

In a recent investigation for Watchdog.org, I reported that a majority of Goodwill entities in the United States pay people with disabilities less than the federal minimum wage, while these same Goodwills simultaneously spend tens of millions of dollars per year on executive compensation and travel-related expenses.

More than 100 Goodwill entities employ workers through the Special Wage Certificate program, a Depression-era loophole in federal labor law that allows organizations to pay subminimum wages to people with disabilities. According to Goodwill, 7,300 of its 105,000 employees are subject to the minimum wage exemption that affects 300,000 workers nationwide. My investigation revealed that these same Goodwill entities that use the special wage program simultaneously spent $53.7 million in total executive compensation. Here are some more highlights:

  • Goodwill of Southern California paid more than $1.1 million in total compensation to its then-CEO, making him the highest paid Goodwill executive in the country.
  • A husband-wife Goodwill executive team in North Carolina collected a combined $795,372 in total compensation.
  • Seventeen Goodwill entities reported executive compensation in excess of $1 million per year.
  • Goodwill entities spent more than $39.1 million in travel-related expenses.

The Goodwill of the Columbia Willamette is a great example of Goodwill's wage disparity. In 2011, the lowest paid worker earned just $1.40 per hour. Michael Miller, the president and CEO, earned $742,875 in total compensation. His pay has actually gone down in the past decade. Matthew Kish, a reporter with the Portland Business Journal, wrote in 2011 that, at one time, Miller's compensation package topped out at $831,508.

The National Federation of the Blind has been campaigning for years to end the deplorable subminimum wage policy. "People with disabilities have the right and ability to work in the same jobs earning the same wages as nondisabled workers," the group argues on its website.

Amazingly, Goodwill openly defends their wage policies and practices. Last year, Brad Turner-Little, the director of mission strategy at Goodwill International, Inc., defended the practice as one of Goodwill's "tools" to help the disabled.

"With 80 percent of working age adults with disabilities in our country not participating in the workforce currently, we believe that it's important to explore more types of opportunities," Turner-Little said. "The special minimum wage certificate is a tool to create employment for people with disabilities. It's not the only tool."

How has Goodwill been so successful at pulling the wool over our eyes? Part of the problem is the national news media that reinforces Goodwill's positive public image without any critical examination of the nonprofit's labor practices. For example, this NBC Nightly News "Making a Difference" segment by Ron Mott, which aired on December 26, 2010, described Goodwill as "a venerable American institution" that is "helping people find jobs." Not a word about how much those jobs pay.

Not everyone is buying Goodwill's talking points. Top-notch local journalists throughout the country have been documenting Goodwill's abuses for years. In 2005, the Oregonian's Bryan Denson and Jeff Kosseff covered the extravagant salaries at the Goodwill of the Columbia Willamette. Last August, CBS 4 Denver's Evrod Cassimy highlighted the local informational protests by the National Federation of the Blind and exposed that some workers were being paid "just 20 cents an hour." The same month, the North County Times' Morgan Cook reported on the $3.32 hourly wage paid to San Diego County's lowest-paid Goodwill worker. In February 2013, the News Observer's Josh Shaffer first broke the story of the husband-wife Goodwill executive team that takes home nearly $800,000 per year in total compensation. The couple's compensation package includes "membership at Raleigh's exclusive Capital City Club."

So what can we do about it? Rep. Gregg Harper (R-Miss.) has introduced the Fair Wages for Workers with Disabilities Act of 2013, to close the subminimum wage loophole. So, write your member of Congress and urge them to support H.R. 831. But, that's not enough. The bill, according to GovTrack, has just "a 1% chance of being enacted."

We also have to stop supporting Goodwill. Stop donating your old clothes to Goodwill. Stop shopping at Goodwill stores. When your friend tells you about the great bargain they found at the local Goodwill, tell them why you've stopped supporting the nonprofit.

Oh and more thing, if you go to one of Beyonce's summer concerts, look for that Goodwill box. You'll presumably find it "to the left, to the left." Drop her a note that explains why you don't support the worst charity in America.