[Nfbk] FW: [NFBAffiliatePresidents] The Productivity Fallacy

[Cathy]

Good information to pass along.

Cathy

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From: nfbaffiliatepresidents-bounces at nfbnet.org
[mailto:nfbaffiliatepresidents-bounces at nfbnet.org]On Behalf Of Lewis,
Anil
Sent: Friday, August 19, 2011 2:22 PM
To: Affiliate Presidents (nfbaffiliatepresidents at nfbnet.org);
chapter-presidents-bounces at nfbnet.org
Subject: [NFBAffiliatePresidents] The Productivity Fallacy




The Productivity Fallacy: Why people are worth more than just how fast their
hands move

When Congress passed the sub-minimum wage components of the Fair Labor
Standards Act (FLSA) of 1938 [Section 14 (c)], it is clear the intention was
to assure that workers who were not able to meet employer productivity
standards, because of the impact of disability on work performance, would
not be excluded from earning a wage.  Unfortunately, the consequences of
this well-intended legislation have been far more negative than positive in
the 71 years since its passage.  From its onset, the provision was based on
an outmoded concept that the FLSA sought to replace - reliance on an
absolute connection between pay and productivity.   In the years prior to
the FLSA, employers were free to connect pay and productivity in a way that
too often placed productivity targets far outside the reach of even the most
ardent efforts by workers.  Theoretically, one could make a decent wage if
one's production was high enough, but workers wore themselves out trying to
meet impossibly high standards.  Congress sought to remedy this through the
FLSA by establishing a minimum wage for most workers.  Of course employers
could still set production standards and even offer incentives for increased
productivity but, at the end of the day, employees could expect to receive
at least the minimum wage for their hours worked.

 But what happens when disability affects productivity?  Congress chose to
use a strategy common in the Industrial Revolution to address this issue -
to pay workers only what they produced.  On one hand, Section 14 (c) might
have resulted in the integration of hundreds of thousands of workers with
disabilities making less than minimum wage working alongside workers earning
full minimum or commensurate wage.  This outcome would be less than
acceptable, but at least those workers would be integrated in typical
workplaces.  But instead of the impact being individually focused, the
sub-minimum wage provisions of FLSA have resulted in the development and
growth of a "separate but equal" industry of alternative employers whose
business it is to employ individuals with disabilities and to use Section 14
(c) as the centerpiece of their business model.  Today 95% of all
sub-minimum wage certificates are held by human service organizations.  By
their own admission, the only way these organizations can remain viable is
to link pay with worker productivity.  Both sides agree that there are
individuals who, as a result of the significance of their disability, will
not meet productivity standards regardless of training, matching or
assistive technology.  But how can those individuals ever expect to earn at
least the minimum wage and to work in regular community workplaces if the
only indicator of contribution is the speed of their productivity?

At least one answer to this dilemma is to confront the presumption that pay
and productivity are inextricably linked.  While it is important to say that
productivity is of critical importance to business and that every reasonable
effort should be made to assist individuals with significant disabilities to
enhance their productivity, there is an alternative construction to resolve
this dilemma -- that of contribution.  The concept of contribution offers a
richer and broader perspective to solve the equation of employee pay than a
sole reliance on productivity.  Of course one aspect of employee
contribution is productivity but it is of critical importance to understand
that employers do not use the productivity yardstick to gauge all facets of
employee contribution in typical workplaces.  Indeed, many tasks performed
in the workplace are simply accomplished episodically, once a week, every
other day, or once or twice a day.  Yet others are performed in a manner
that counting productivity is neither economically or logistically feasible.
What matters most in those cases is that the task gets done and gets done
correctly.

The concept of pay for productivity used by Congress for sub-minimum wage is
based on the strictest interpretation of employer expectations.  Employers
always expect, rhetorically at least, high productivity from employees and
compensate them at a reasonable rate less than the value of the
productivity.  It is true that unless the value of the employees'
productivity exceeds pay offered, a for-profit entity cannot stay in
business for long.  Even non-profit and governmental entities must strike a
balance, theoretically, between pay and productivity to remain viable and
successful.  The traditional formula has been that employee pay must be
equal to or less than the employer's productivity demands.  However, this
tight formulization does not take into consideration that, beyond the demand
for productivity, businesses have needs.  The concept of adding value by
meeting business needs allows for a focus on those aspects of a business
that bring added value to the workplace.  When the value equation shifts
from meeting demands to meeting needs, pay at or above the minimum wage
becomes possible.

The most common way to add value to a business, beyond typical productivity,
is to meet unmet needs.  The concept of unmet needs refers to a host of
workplace tasks that need to be performed, theoretically at least, but that,
in actuality, are not being performed.  By targeting unmet business needs as
an organizing concept, individuals with disabilities who have specific
contributions to offer can move beyond the demands associated with
productivity standards.  Since 2001, the Office of Disability Employment
Policy (ODEP) of the US Department of Labor has been promoting this strategy
through its initiative on Customized Employment.  Through a series of nearly
40 multi-year implementation projects, the Customized Employment (CE)
Initiative has set pay of at least the minimum wage as the threshold for a
successful job. This initiative has shown that the contribution of meeting
an unmet need is valued differently by many employers than that of the
original task that was not performed.  In other words, CE provides a
strategy to broaden the pay for productivity equation to an enhanced, pay
for contribution equation.

Beyond addressing unmet needs, customized employment allows for additional
strategies to unbundle the demand of employers.  For instance, many
employers assign episodic duties to highly paid employees that could easily
be performed by workers at a much lower (though at or above minimum wage)
pay grade.  It has been demonstrated clearly from the days of Marc Gold's
ground-breaking research to the present-day examples of individuals in
customized, supported employment that individuals with even the most
significant disabilities have discrete contributions to offer to employers
if the demand of pre-set productivity standards is not present.  Gold found
it was possible to teach virtually any individual, regardless of severity of
intellectual disability, to perform tasks in a quality manner.  This finding
fits perfectly with the concept of customized employment that allows a
business-friendly strategy to remove the barrier of productivity.

Another perspective regarding the presumed need for sub-minimum wage pay is
that individual performance is neither a static nor a general concept.  A
colleague from the University of Massachusetts, John Butterworth, notes the
following:
The regulations regarding sub-minimum wage clearly indicate that it is
intended to be contextual in nature, and that even if an individual is paid
sub-minimum wage for a particular type of job at a particular time there
should be no assumption that the individual is incapable of earning minimum
wage or higher in a different position, or in the same position, with the
benefit of experience. In practice, it appears that the contextual nature of
sub-minimum wage has often been ignored. Anecdotal evidence and observation
indicate that when an individual is incapable of working at a rate to meet
the requirements of the prevailing wage for a certain position, this is
often used as evidence by service providers that the individual is incapable
of working in the community at minimum wage or higher.

It is estimated that approximately 425,000 individuals with significant
disabilities are in services that use sub-minimum wage as the basis of pay
in the USA.  For the first time in the history of the disability field,
concerted efforts are being made to remove Section 14 (c) from the FLSA.
Conversely, those who favor its continued use are stating their case.  What
seems to be occurring is less of a debate around sub-minimum wage payments
than focusing on the continued existence of the industry of organizations
that use Section 14 (c) as an essential ingredient of their viability.  It
has been suggested that the payment of sub-minimum wages is somehow
connected to the national value that, disability is a natural part of the
human experience, as stated in the Americans with Disabilities Act.  How can
the case be made that disability is being treated as a natural part of our
human experience when people with disabilities are virtually the only
segment of society for whom it is legal to pay sub-minimum wages?   In fact,
this beautifully stated national value seems to argue strongly for the
removal, not the continuation, of sub-minimum wage.

At this point, only the most traditionally devalued segments of our society
are allowed to receive less than minimum wage.  This is especially critical
in that in recent years there has been an increasing focus on the concept of
asset development and access to a living wage for persons with disabilities.
How can persons with significant disabilities ever be expected to build
assets and earn a living wage if they must start in the hole created by
sub-minimum wage?  In the Americans with Disabilities Act (ADA), Congress
provided that "the Nation's proper goals regarding individuals with
disabilities are to assure equality of opportunity, full participation,
independent living, and economic self-sufficiency for such individuals."
Equality of opportunity to earn a living wage that results in economic
self-sufficiency is only possible for all Americans if they are guaranteed
access to at least the minimum wage as payment for their work.

Another argument by those in favor of continuing Section 14 (c) is that of
personal choice - persons with disabilities should have the right to choose
to be employed in services that typically pay less than the minimum wage.
However, if disability is to ever be seen as an aspect of life potentially
associated with all citizens, not just an aberration associated with a small
portion of society, personal choice should be over-ridden as it is for all
citizens on the issue of pay.  Job seekers without disabilities do not have
the choice to apply for a job for pay of less than the minimum wage.

There seems to be a legitimate concern voiced by the organizations that use
14 (c) as the primary basis of employee pay that its removal from FLSA would
be negative, resulting in the loss of sheltered employment for many of the
425,000 individuals who are paid sub-minimum wages.  This concern seems to
be linked with the observation that the access to employment at regular
wages offered by Customized Employment are relatively new and not widely
accepted and understood by traditional providers of competitive employment
services.  Both of these points should signal a cautious and measured
approach to any effort to remove 14 (c) from FLSA.  However, these concerns
should provide the framework for a long term plan to gradually reduce the
use of 14 (c) as more and more individuals receive regular (possibly
customized) jobs in the community rather than a rationale to keep this
outmoded concept.

As the arguments pro and con emerge regarding sub-minimum wage payments it
seems of fundamental importance to separate the issues of pay and
programmatic services.  It is the position of this paper that the value of
the contributions made by individuals with disabilities to employers goes
far beyond how fast their hands and bodies move.  By focusing on employer
needs, it is possible to achieve pay at or above minimum standards for all
people.  The fact that thousands of sheltered workshops depend on
sub-minimum wage payments is a different issue.  While no one wants tens of
thousands of individuals to be dumped back non-activity, sitting at home (or
worse), this doesn't have to happen.  Providers of sheltered employment
could embrace these new concepts and partner in a plan to gradually reduce
reliance on 14 (c) as they increase customized, supported employment
outcomes or, if locally desired, to recast their business model based on a
minimum wage threshold for payments to individuals who choose a sheltered
form of employment.

At the end of the day, it all boils down to a decision as to how we wish to
view the issue of disability and life.  Do we see people with disabilities,
including all people with the most significant disabilities, as co-workers,
neighbors, friends, citizens and contributors in the regular sense, with
support and accommodation as necessary, or do we see them in a special sense
as individuals who are not expected to join society fully, living lives
apart and different from the rest of us.  The positive concept of moving
beyond productivity as the primary indicator of human worth in the workplace
provides a pathway to follow.  Contribution can then be the basis of
legitimizing typical pay in typical settings.

Michael Callahan, Marc Gold & Associates/Employment for All



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Mr. Anil Lewis, M.P.A.
Director of Strategic Communications

"Eliminating Subminimum Wages for People with Disabilities"

NATIONAL FEDERATION OF THE BLIND
200 East Wells Street at Jernigan Place
Baltimore, Maryland   21230

(410) 659-9314 ext. 2374 (Voice)
(410) 685-5653 (FAX)
Email: alewis at nfb.org<mailto:alewis at nfb.org>
Web: www.nfb.org<http://www.nfb.org>

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