National Council on Disability Calls for Phaseout of Subminimum Wage

Big news.  See this report that the NCD transmitted to the President today.  Here are the report's key findings, as summarized in the introduction:

Sheltered workshops are ineffective at transitioning individuals with disabilities to integrated employment. According to the 2001 investigation by the Government Accountability Office into the 14(c) program, only approximately 5% of sheltered workshops employees left to take a job in the community.[ii] 

According to the Centers for Medicare and Medicaid Services, Medicaid-financed pre-vocational services to sheltered workshops are, “not an end point, but a time limited (although no specific limit is given) service for the purpose of helping someone obtain competitive employment.”[iii] 

Individuals in supported employment who had previously been served in sheltered workshop settings do not show a higher rate of employment as compared to those who had gone straight to supported employment without ever being in a sheltered workshop.[iv] However, research indicates that those who had previously been in sheltered workshops had higher support costs and lower wages than comparable individuals who had never been in sheltered workshop settings.[v] 

The 14(c) sub-minimum wage program is utilized primarily by non-profit or state-operated social services providers – specifically, sheltered workshops – rather than private, for-profit businesses. According to the GAO, 95% of all workers with disabilities being paid less than minimum wage under the 14(c) program were employed by sheltered workshops.[vi] 

Research indicates that employees receiving supported employment services generate lower cumulative costs than employees receiving sheltered workshop services and that whereas the cost-trend of supported employees shifts downward over time, the opposite is the case for individuals receiving sheltered workshop services.[vii]