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Policies, tax dollars enrich Goodwill execs

By   /   May 6, 2013  /   103 Comments

 

AP file photo

SHOPPERS’ PARADISE: Goodwill Industries is a paradise for shoppers looking for second-hand bargains. And while it pays some of its executives big bucks, its workers often earn subminimum wages.

 

Editor’s Note: John Hrabe’s examination of Goodwill Industries, published in early May, recently got a second life. On June 21, NBC News’ Anna Schecter echoed Hrabe’s findings: top Goodwill execs pull in six-figure salaries while federal regulations allow them to pay their disabled employees a sub-minimum wage. We’re re-posting Hrabe’s story here, not because we believe the federal government ought to do anything about wage disparities at Goodwill; we believe consumers and donors — supported by reporting like Hrabe’s — will make the right decisions in a free market.

By John Hrabe | Watchdog.org

Marathon runners like Jim Barnette are usually model employees. They’ll slog through whatever task is in front of them. Stocking shelves or greeting customer. Pulling clothes or pushing specials.

A 10-year veteran at Goodwill Industries of the Columbia Willamette, the 49-year-old is described by co-workers as having a “can-do attitude.” What else do you expect from a man who has finished three marathons?

“Our CEO, Michael Miller, describes Jim Barnette as a compelling role model whose determination, strength of character is nothing short of heroic,” said Dale Emanuel, a local Goodwill public relations manager.

In 2012, Barnette finally got his due. The headquarters of all 179 Goodwill organizations worldwide recognized him as “Goodwill Industries International’s 2012 Achiever of the Year.” Shannon Phillips, Barnette’ sister, who was interviewed for the corresponding promotional video, said that her brother has “always known what he wanted in life.”

“He just wanted a job,” she said. “He wanted to make money.”

But, money is the one thing Jim doesn’t get much of.

In 38 states, spanning from Hawaii to Florida, a majority of Goodwill organizations pay workers with disabilities less than the federal minimum wage, while simultaneously spending tens of millions of dollars in executive compensation and travel-related expenses, a Watchdog investigation has found.

According to data obtained from the U.S. Department of Labor’s Wage and Hour Division, 109 of 165 Goodwill entities in North America employ workers through the Special Wage Certificate program, which grants the nonprofits the right to pay subminimum wages to people with disabilities. Goodwill says that 7,300 of its 105,000 employees are subject to the special minimum wage exemption.

A Watchdog.org analysis of the most recent tax returns for these 109 Goodwill entities that use the Special Wage Certificate program reveals a pattern.

Goodwill’s top executives received more than $53.7 million in total compensation.

  • 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.
  • The highest-paid employees of 101 Goodwill organizations received, on average, a total compensation package worth nearly a quarter-million dollars per year, or $24.7 million in total compensation.
  • Seventeen Goodwill entities reported executive compensation in excess of $1 million per year with 30 CEOs receiving more than $293,000 per year in total compensation.
  • A husband-wife Goodwill executive team in North Carolina collected a combined $795,372 in total compensation.
  • Goodwill entities spent more than $39.1 million in travel-related expenses, of which 14 entities spent more than $1 million in travel-related expenses.
  • Thirteen organizations spent more than $100,000 in annual conference expenses.

All of Goodwill’s actions are not only legal, but, in some cases, being funded by your tax dollars.

Special Wage Certificate program: Government-sanctioned exploitation.

How is it legal to pay substandard wages in 21st century America?

A Depression-era loophole in federal law, Section 14 (c) of the Fair Labor Standards Act of 1938, allows employers to obtain a special wage certificate. Goodwill is among the most best-known institutions to use the program that affects 300,000 workers nationwide. The certificate grants employers, mostly nonprofits, the ability to pay people with disabilities less than the federal minimum wage. Instead of the current wage floor set at $7.25 per hour, workers with disabilities are paid a commensurate wage based on their performance.

“Goodwill Industries is one of the most well-known charitable organizations in the United States, but most members of the general public are unaware that Goodwill exploits people with disabilities,” said Marc Maurer, president of the National Federation of the Blind, which organized a nationwide protest of offending Goodwill organizations last summer. “We are conducting informational protests to make the public aware of this practice that, although sadly still legal, is unfair, discriminatory and immoral.”

Goodwill Industries openly defends the subminimum wage policy on its website and in response to media requests. Last year, Brad Turner-Little, director of mission strategy at the international headquarters, 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,” he said. “The special minimum wage certificate is a tool to create employment for people with disabilities. It’s not the only tool.”

Goodwill: A billion-dollar business

Founded in 1902 by a Methodist minister, Goodwill Industries promises as its charitable mission “to enhance the dignity and quality of life of individuals and families by strengthening communities, eliminating barriers to opportunity, and helping people in need reach their full potential through learning and the power of work.”

Don’t be confused by its charitable mission or nonprofit status. Goodwill Industries is a multi-billion dollar business. In 2012, the nonprofit generated $4.89 billion in total annual revenue.  The bulk of the company’s revenue, $3.53 billion, came from sales at its 2,700 secondhand shops. The nonprofit, which has become synonymous with used-clothing donations, also received $87 million in government grants.

Each Goodwill entity is independently operated. The organizations file separate tax returns and are controlled by an independent board of directors, usually local business and community leaders. That explains why the Watchdog investigation found substantial variation in wages and financial policies throughout the country. To be clear, not every Goodwill organization pays its disabled workers less than the federal minimum wage, or its CEOs top-dollar.

Husband-wife Goodwill team earns $800K

In Durham, N.C., you’ll find a husband and wife executive team earning nearly $800,000 in total compensation, while also utilizing the subminimum wage certificate program.

Goodwill Industries of Eastern North Carolina Inc. President and CEO Dennis McLain received $430,239 in total compensation, while his wife, Linda, received another $365,133 in pay and benefits. The group’s 2011 tax return notes that the couple was also entitled to first-class travel and access to a private club, paid for, in part, with revenue generated from the efforts of disabled workers who were paid less than minimum wage under the special wage certificate program.

“A 2012 audit report shows Goodwill also approved a tax-free retirement housing allowance for the president, $2,500 a month from his retirement until his death, and a retirement medical plan paying up to $9,000 a year,” reported the News Observer’s Josh Shaffer in February.

The News Observer also raised questions about more than a million dollars in charitable funds that the group allegedly spent in sub-Saharan Africa.

“Its 990 federal tax form for 2011 shows $1.36 million spent on ‘donations and related costs’ to nonprofits outside of North America.” the News Observer first reported. “But its disclosures to the IRS provide no details about who received this funding. The names of organizations Goodwill sent checks and wire transfers are left blank on the tax documents, labeled only as sub-Saharan Africa, East Asia or South America.”

The North Carolina couple, however, isn’t the highest-paid Goodwill executive team in the country.

Goodwill’s million-dollar man in Los Angeles

In 2011, the highest-paid Goodwill executive in the country was Douglas Barr, then-CEO of Goodwill of Southern California. Barr, who retired in July 2012, received a total compensation package worth $1,188,733, including a base salary of $350,200, bonuses worth $87,550, retirement benefits of $71,050, and $637,864 in other reportable compensation.

“Doug is a leader among Goodwill chief executive officers and inspires others with his commitment to the Goodwill mission,” said Jim Gibbons, president and CEO of Goodwill Industries International in a press release that announced Barr as the recipient of the 2011 Kenneth K. King Award for Management Excellence, the highest honor for a Goodwill executive.

The same year, the organization spent $3.76 million in total compensation for top personnel, $2.5 million in travel-related expenses and $424,997 on conferences, conventions and meetings. To help pay for expenses, the group received $7.47 million in government grants and contributions, according to its most recent tax return filed in October 2012. That was an improvement for taxpayers, who shelled out more than $9 million in government funds to Los Angeles-area Goodwill in 2010.

Around the country, it’s the same story: Goodwill entities accepting government funds and a tax-exempt charitable status while paying subminimum wage to people with disabilities. In 2011, the Goodwill of Southwestern Pennsylvania accepted more than $11.3 million in government grants, which helped offset $929,066 in executive compensation. The same year, Goodwill of Western and Northern Connecticut Inc. accepted $8.1 million in government grants, while paying $1.08 million to executives, including $424,751 to its president and CEO, David H. Turner. The group spent another $732,047 in travel-related expenses.

Goodwill spends fund to lobby for more government funds

In some cases, government funds helped fund lobbying efforts to obtain more government funds. In St. Louis, MERS/Missouri Goodwill accepted $11.99 million in government funds and reinvested $37,800 in lobbying and political expenditures “for the purpose of identifying opportunities in regards to mission needs and funding,” according to Schedule C, Part II of the group’s tax return.

The organization needed additional funding in 2011 to make up for the more than $1 million, which was embezzled by an assistant vice president for human resources.

“From 2007 through June 2010, Ronald Partee, 45, of St. Louis, used fake bills, invoices, and letters to trick MERS/Missouri Goodwill Industries Inc. employees into send checks to his fake businesses,” the St. Louis Post-Dispatch reported in May 2011. Ultimately, Partee received 70 months in prison for his million-dollar embezzlement.

In 2011, executives legally withdrew $1.42 million from the organization in executive compensation.  Lewis Chartock, the president and CEO of MERS Goodwill, was paid $516,645 in total compensation, which included the group covering his spouse’s travel-expenses for organization functions.

Executive perks: Sales performance

Spousal travel is just one of a wide array of Goodwill executive perks that might seem ill-fitting with a public charity. Goodwill Industries of Greater New York & Northern New Jersey Inc., which received $33.4 million in government grants, offered a senior vice-president a complicated incentive pay package structured on sales numbers and linked to the Consumer Price Index. According to Schedule J, Part III of the group’s 2011 tax return,

“For each month David Schoch, senior vice president of the organization, remains employed under the employment contract, Goodwill will pay him a commission equal to one quarter of one percent (25% of the total dollar amount invoiced by Goodwill’s GoodTemps Division for that month, which amount Goodwill will pay to him by the second pay period following the month during which the amounts were invoiced commission paid to him during any fiscal year will be limited to a dollar amount (hereinafter “CAP”) determined at the start of each new fiscal year. The CAP equaled $49,455 for the fiscal year beginning on July 1, 2007 and will increase each subsequent fiscal year by a percentage equal to the Consumer Price Index (CPI) as published thirty (30) days prior to the first day of that fiscal year.”

Schoch isn’t even the highest paid executive of the Greater New York Goodwill. That honor is bestowed upon William Forrester, president and CEO, who took home $566,138 in total compensation of which $399,289 was base pay.

These performance bonuses are replicated throughout the country and can sometimes result in lower ranking executives earning more than their supervisors. In Denver, local Goodwill President and CEO Jesse Wolff’s $251,321 in total compensation was surpassed by Ric Berninzoni, the group’s then-vice-president of retail operations who earned $295,605 in total compensation.

According to the group’s 2011 tax return, “Part of the pay structure for certain retail operations personnel and for the Executive Team (President/CEO and Vice Presidents) includes bonuses based on net revenue results. The President/CEO did not receive a bonus in 2011.”  Berninzoni’s compensation for that year also included a $150,000 severance payment.

In some cases, the good times roll on for executives even after they leave the organization. Goodwill Industries of Houston, according to its 2011 tax return,  sponsored “a deferred compensation plan for Steven P. Lufburrow that provides for monthly benefit of $6,000 payable upon the defined retirement age.” The Houston president and CEO received a total compensation package worth $411,081 and was based on “an annual incentive performance bonus determined by the compensation committee.”

Goodwill International defends executive pay

Tommy A. Moore Jr., Goodwill Industries International’s board chairman, defends the organization’s executive compensation policies.

When asked to address the more than half-million dollar compensation paid to Goodwill Industries International’s President and CEO Jim Gibbons, Moore said, “The board goes through a rigorous process to determine his compensation based on the impact of his leadership, strategic goals and performance.”

The CEO’s annual review, however, is less rigorous than the corporation’s review of subminimum wage employees, who are evaluated every six months, or sometimes even more frequently. Turner-Little, the spokesman for Goodwill Industries International Inc., described the “lengthy” and “extensive” process.

“Every six months, an individual who is paid under a special wage certificate, their productivity has to be assessed at least every six months. Oftentimes employers will do it more frequently than that, Turner-Little said. “And all that has to be documented and made available to the Department (of Labor) if they need to see it.”

The employee evaluations are just one component of a lengthy administrative process required by the Department of Labor in order for an organization to maintain its minimum wage exemption.

According to the Goodwill national spokesman: “In order to receive a Special Minimum Wage Certificate from the Department of Labor, a business has to go through an application process, which is fairly extensive, identifying the types of jobs that the special minimum wage certificate will be applied to, provide evidence of having surveyed local companies to determine what the prevailing wage rate is for the (specified) jobs that are being performed so that accurate computation of the commensurate wage rate can be determined.”

After Goodwill has surveyed at least three companies for comparable wage information data, the organization must evaluate individual employees.

“They have to outline their individual productivity assessment process for the jobs that are going to be paid under the special minimum wage certificate and that has to be done both for service-type jobs as well as piece rate work – so hand assembly type work, making a product as well as providing a service,” Turner-Little said. “Then, (they) have to outline what their time-study process is going to be, all of that is contained in the application process.”

Work center certificates, the type Goodwill says it uses, can remain in effect for two years. Then, the process starts again, but not without adding all the previous data to the new Department of Labor application.

“If they have had the certificate in the past, the use of that certificate, the number of employees, the types of jobs that were performed, and provide evidence to the department that they have implemented the certificate in compliance with expected regulations,” Turner-Little said.

Which begs the question, why is Goodwill spending so much time and money on bureaucracy? Remember, Goodwill says the subminimum wage policy helps them save money and hire more workers.

The law is based on two assumptions:

  • People with disabilities are not as productive as able-bodied individuals.
  • A commensurate wage tied to the disabled workers productivity increases employment opportunities for the disabled.

The National Federation of the Blind, which has fought for years to change the policy, says  workers with disabilities can be just as productive and valuable as other workers without disabilities.

Of course, people with disabilities aren’t inherently less productive employees. Samuel R. Bagenstos, a professor of law at the University of Michigan Law School and a former deputy attorney general for civil rights, has written “The Case Against the Section 14(c) Subminimum Wage Program.” He cites examples of how workshop employers automatically assigned jobs “without any connection to the abilities and background of the individuals.” One college-educated woman with cerebral palsy was paid $3 per week to assemble rubber mats, according to a former federal rehabilitation commissioner cited by Bagenstos.

Double speak at Columbia Willamette Goodwill?

Barnette, the marathoner who has mild quadriplegia, a seizure disorder, cognitive delays and is legally blind, doesn’t let his disabilities affect his job. The nonprofit openly admits that fact. According to an April advertisement posted on YouTube, “He never lets his disability get in the way of being able to do something.”

“My disability doesn’t really affect me to do a good job,” Barnette says in his own words. “It doesn’t really affect me at all.”

Barnette’s supervisors, co-workers and even the top Goodwill executive in the country agree.

“He never lets his disability get in the way of being able to do something,” said Cheri Folk, director of workforce development at Goodwill Columbia Willamette.

“My first impression of Jim was that he could do all of the jobs that I offered to him,” said Edith Rojas, one of Barnette’s co-worker and an integration specialist at Goodwill. “One of his strengths is that he’s really smart. He always goes beyond my expectations, and he tries to reach his goals.”

“You can’t help but be impressed when you meet Jim Barnette,” Goodwill Industries International’s Gibbons said, according to a May 2012 press release. “Challenges to employment don’t exist in Jim’s world. He demonstrates that meaningful work is something everyone deserves.”

Yet, according to Goodwill Industries International’s website, “Jim Barnette, Goodwill Industries International’s 2012 Achiever of the Year, receives a commensurate wage through the Special Minimum Wage Certificate.”

When asked about the contradiction, Goodwill Industries of the Columbia Willamette defended its wage policies.

“The people Goodwill Industries of the Columbia Willamette serves under the certificate are not regular employees of Goodwill,” the organization said in a statement released by its general counsel Bob Barsocchini. “They are not held to any specific productivity standard but they are fully compensated according to their individual ability to produce.”

In 2011, the Columbia Willamette Goodwill, one of the largest in the country, says it paid $922,444 in commensurate wages to approximately 250 people with developmental disabilities. These employees worked 159,584 hours for an average hourly wage of $5.78. The lowest paid worker received just $1.40 per hour.

“Keep in mind, every person working under the special minimum wage certificate either directly, or through their guardians, chooses to do so,” the organization said. “If 14c is repealed, hundreds of thousands of those individuals will probably lose access to paid work experience.”

The organization’s tax returns contradict Goodwill of the Columbia Willamette’s claims that it can’t afford to pay minimum wage to all its workers.

According to its most recent tax return filed last August, Goodwill Industries of the Columbia Willamette generated a $14 million profit on $118.6 million in annual revenue. The corporation, which has $170 million in net assets, paid its top brass $1.55 million in total compensation.  Just Michael Miller, the president and CEO, collected $742,875 in total compensation.

Asked about its executive compensation, the nonprofit said that it had hired “Frederic W. Cook & Company, a nationally-recognized compensation consulting firm, to ensure that compensation for the executive team is reasonable.”

However, the Oregon Department of Justice reached the opposite conclusion after a 2004 investigation into the organization’s finances.

“After the 18-month investigation, the Department of Justice concluded that Miller’s pay was ‘unreasonable,’” Matthew Kish, a staff reporter with the Portland Business Journal, wrote in 2011.

“Without question, Goodwill of the Columbia Willamette is a financial juggernaut,” Kish reported.

The 2004 investigation by The Oregonian newspaper detailed Miller’s executive compensation and the subminimum wages paid to disabled workers. You might recognize the name of one employee trotted out by Goodwill to defend its policies. “It’s a challenge that Jim Barnette fully embraces — that is, when he’s not puzzling over how to hang up a skort, a skirt-shorts hybrid,” reported The Oregonian’s award-winning reporter Jeff Kosseff.

Barnette’s sister, according to The Oregonian, would “go over his performance numbers” every night at dinner because it was “one of Jim’s big prides.” Kosseff wrote that the nonprofit defended the policy, which “precisely compensates them for their work while adding motivation for them to exceed minimum wage.”

In 2012, U.S. Rep. Cliff Stearns, R-Florida, introduced H.R. 3086, the Fair Wages Act, to stop the practice, which he called “deplorable and wrong.” U.S. Rep. Gregg Harper, R-Miss, has reintroduced the measure, HR 831, this session.

“Meaningful work deserves fair pay,” Harper said. “This dated provision unjustly prohibits workers with disabilities from reaching their full potential. The current federal disability laws are hopelessly outdated and will ultimately lead to unemployment and poverty for these individuals.”

 

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  • http://twitter.com/trentengland trentengland

    People should be paid market wages. Right? This article reads like it’s calling for more government control of wages.

  • http://www.facebook.com/profile.php?id=540250023 Matt Meskill

    You mean like minimum wage?

  • Jed Bartlet

    Are you defending Goodwill’s exploitation of disabled people?

    Yes or no?

  • Mr. Green

    Absolutely people should be paid market wages which includes minimum wage. That would also require that charities that use their missions and good deeds as a bludgeoning instrument on their competition receive close scrutiny on how effective they are at achieving their mission! When your mission is to employ people do you really need to be a not-for-profit? Do American’s really need tax deductions for their trash?
    Instead of raising taxes how about removing the deduction for our discarded items, leaving cash donations as deductible of course.

  • OldTimerMO

    Why do you think there are Millions of non profits and they give Millions to Political campaign’s 75% of them are just making the top exes rich while free loading of the tax system.

  • SixSixSix

    The sick excesses of the super elite is not just confined to Wall Street, or the corporate world. It infests big “non-profits” and Academia where the damage is especially pernicious. The class warfare tax system is also deeply broken. To obad the proposed “tax reforms” only deform it further. Optimistic? No, it smells more like the decline and fall of Empire.

  • SixSixSix

    But should they be paid blackmail wages at the top? Absolutely somebody should step in and say stick to the mission. It doesn’t take a million dollars to play manager to administrate a charitable venture.

  • SixSixSix

    Markets can be rigged. The scandal is at the top.

  • Franseenit

    I know several college graduates that are employed by these non-profits to assist the challenged workers to find jobs and also help them live independently. The ‘agents’ are paid so poorly that the clients (handicapped), living on taxpayer programs live better and have more amenities in their apartments than the agents are able to afford. They have health and dental care, flat screen TV/cable, dishwashers, personal washers and dryers, free public transportation, food stamps, money specific for entertainment each month – movies, dinner out, plays. The ‘agents’ cannot afford most of this stuff with their wages. And yes, the CEO of this specific non-profit makes close to 1 million while also getting other HUGE bennies – free car, trips to wonderful places for ‘conferences’ – B—S –! How warped people get when they work themselves into positions of power.

  • http://www.facebook.com/allenjwilson Allen J Wilson

    Very disturbing. How does the top brass at Goodwill sleep at night is beyond me!!

  • Skippydelic

    Does it surprise us that CEOs have found a way to use the federal law to justify screwing their workers while lining their pockets?

    Section 14(c) *might* have been an acceptable idea in 1938, but the workplace dynamics have changed *completely* since then!

    Maybe we should replace 14(c) with new provisions:

    1) Instead of paying workers a sub-minimum wage, have a new program where the government subsidizes those employers so that workers are paid the *full* minimum wage;

    2) Institute a *maximum wage* (or salary cap) on any non-profit business that takes advantage of the Special Wage Certificate Program;

    3) Require that any business taking advantage of the SWCP assess the *actual* abilities of their workers and assign jobs on *that* basis, rather than *arbitrarily* assigning tasks with no regard to ability;

    Make sense?

  • 1228wt

    No. But it’s been exposed, now let’s hear what Goodwill’s reply is. Watchdog should be this thorough on voting fraud, gov’t corruption, and the IRS handing out taxpayer money to welfare people who do not work.

  • kay

    They are overpriced anyway. They used to be a bargain but I consistently see items for sale that are higher priced than in retail stores. I’ll drop in but rarely buy any more Goodwill is completely corporate. Profit is their bottom line. There’s no “good will” here.

  • kay

    Everyone should start donating their goods to the Salvation Army instead. Their stores are reasonably priced, the Salvation Army actually does some good for the community and their bottom line isn’t profit, its aid.

  • Skip

    Just heard about this article on talk radio. It talks about market wages and how these folks who work for Goodwill are getting ripped off. If they’re such a valued workforce they can just leave and go to greener pastures and get the minimum wage! Or form a union so that they can get paid more and take home even less. And BTW executive compensation is always way more than what the worker bee gets! However, I agree with Kay, go to the Salvation Army, they’re still the real deal.

  • cindy

    There was so much in there about executive compensation and not enough how to change this law. We need to start with the lawmakers mentioned who were willing to address this atrocity.

  • greatportender

    Most people I know in “Academia” aren’t living high on the hog. In fact, many employ “adjunct” employees so that they don’t need to provide benefits.

  • Carrie Jorgenson

    For those saying the Salvation Army is better – it isn’t they do the same things as Goodwill. Also, many of the employees who are disabled – their wages aren’t set by the companies they work for. In most cases they are set by their vocational programs or another non-profit that acts like employment agencies for disabled people. The law needs to change. http://tolerantpeople.com/2013/06/23/disabled-employees-exploitation-or-opportunity/

  • HolyChrist

    Salvation Army is even worse.

  • HolyChrist

    Salvation Army is worse.

  • TrollStomper9000

    That’s why I never shop at those places, besides not wanting to use second-tier crap. Which is unfortunate because it does ultimately hurt the employees. Hopefully they move on and find better jobs, or burn their current ones to the ground. Mwuhuhahah!

  • Katrina

    This is what happens when you depend on “charity” to provide jobs. People are taken advantage of. Salvation Army, St. Vincent de Paul and etc. are all charities that make religious organizations look good while taking advantage of those who need jobs. I am a firm believer that a secular government program would be held accountable and would be a better way to get people working. The reality is that when there is no transparency, some evil person will take advantage of those less fortunate.

  • Ann Topmiller

    A brother-in-law used to work for Goodwill as a driver. He told me that employees were told to separate out the high ticket items…fur coats, jewelry, handbags, golf clubs and the like….and set them aside for the wives of the “brass” to go through. They picked out what they wanted and paid nothing at all for the items. I stopped giving to Goodwill at that time. In Indianapolis, I give to the Vincent de Paul society which charges NOTHING to those that need the goods.

  • nancy

    Speaking from 20 years in a similar vocational program, the issue is not the wages based on productivity. The problem is the waste and excess on the corporate level. THAT problem is a plague in the US right now.

  • nancy

    Trust me, changing the 14c law will hurt far more workers than CEO’s. The sub-minimum wage law might need revising, but the CEO’s pay needs to be capped. seriously.

  • OmnipotentEntity

    While I agree that Salvation Army is worse. It doesn’t change the fact that it’s wrong and inexcusible. If your purpose was to defend Goodwill in this manner you are committing what is known as the “tu quoque fallacy.” Simply put two wrongs don’t make a right.

  • Ang

    Sounds like church to me…..

  • Ang

    PS: The poor tithe to support the rich pastors….

  • Jwise

    One tenth of one percent of sales for compensation does not seem exorbitant to me. While we can debate if a million dollar salary is a lot in light of the stated mission of Goodwill Industries, this reads like a hatchet piece. These sub-minimum wage paying jobs often go to mentally or physically handicapped people who also have caps on what they can earn due to laws regarding their social security, state and federal aid.

    It’s sad that the majority of us readers are so easily overwhelmed by large numbers and that writers are not up front on putting things in perspective.

  • HolyChrist

    Most definitely! Not an excuse for Goodwill. Not defending this behavior at all.

  • shawn_von_socialist

    yeah they get so much money

    average disability payment in america is 670 dollars they are so super rich man they can just afford big-screen tvs and washers and dryers

    and they can afford to go to movies and buy brand new clothing

  • SixSixSix

    – accidental repeat –

  • lanisue66

    Goodwill needs to get back to their beginnings.They are going out price themselves.

  • jim

    If you like fairness in charitable stores, please look into Mennonite stores, such as 10,000 Villages or MCC stores.

  • imussuallyright

    How so? I’ve always considered the Salvation Army to be a good charity. Please explain.

  • ccaffrey

    I guess you’ve missed the “race-to-the-bottom” on wages when left to market control. I understand that the owner of one factory in Bangladesh (I forget whether it was the one where the employees burned to death or where the building colapsed on them) tried to assuage the corporate contractors that the incident shouldn’t interfere with them meeting orders at a factory across town. And now that states are passing the Prison Industries Act, corporations can avail themselves of a captive work force that they can get for about $2.00/hr with no pesky safety or worker rights to contend with. What you call government “control” of wages is a minimum wage that hasn’t been changed in decades. You’d think that as worker productivity increased, they would be rewarded wouldn’t you? But no, although productivity has steadily increased over the past thirty years, wages have stagnated. This quarter they actually declined. Corporations won’t bring back jobs to the U.S. regardless of all the perks the corporations manipulate for themselves, until the population is so desperate they’ll work for anything, which is exactly what business wants. That’s the problem when you have corporations whose only god is maximum profit. It’s a god alright, but one that overall has the same consideration of workers as they do for office supplies.

  • ccaffrey

    What a hardhearted sob you are. Considering the profits those non-profits are making I’d say the worker productivity isn’t the problem. It sure as hell ain’t the million dollar management stocking the shelves. What the hell is wrong with you people, that you would deny disabled people the chance to even make federal minimum wage, as paltry as that is, while their bosses of this “charitable” organization is making upper 6 figures?

  • Park Lover

    Just remember convicted felons fall in this catergory. I don’t donate to anyone…nor do I know anything about Salvation Army or otherwise, but some of these people are lucky there are companies like this out therr that are even willimg to hire them

  • wheelieblindie

    I’m legally blind & in a power wheelchair, I’ve lived completely independent since 15, I’m currently 34..
    I’m lucky to even be able to be accepted into sheltered workshops here in Canada, when I was for 2yrs in toronro , my average bi-weekly cash payout, (they pay in cash to avoid taxes) $20-25, usually a lot less, then the government disability benefits pension, takes $.50 of every dollar I make..
    So for a total of 70 hours in 2 weeks I made $10

    Its all piece work pay..

    Most ‘jobs’ paid between $.0025-$.05, per piece worked..

    I hope you guys realise how lucky blind people in the USA are to have NFB or AFB..

    BTW, CNIB don’t do ANYTHING to fight for the multiply disabled blind people in Canada, most are shoved into group homes after blind school, I was lucky, I grew up in the sighted school system, no matter how severe the bullying got, I always remembered to be grateful for NOT being shoved into the blind school system..

  • amazonfeet

    I’ve been on SSDI since 2007 and can’t afford any of that.

  • Jim Lamb

    Mr. Wilson, these folks sleep as well as the folks in Washington who say that if a person owns a car, they should not get assistance. They sleep just like the folks who have zillions of dollars hiding in off-shore accounts…and make another zillion spending time in congress…Actually, that are simply common thieves!

  • amazonfeet

    I don’t know where you are, but we don’t get that in Florida. I’m poor on SSDI, but still too rich to qualify for food stamps or medicaid. It’s a toss-up as to which will kill me first…my teeth that are crumbling out of my mouth,(can’t afford dental care, and Medicare will not cover it even if lack of it will kill me) or the genetic connective tissue disorder I was born with that damn near killed me 3 times in 11 months in my mid 30s. As far as social safety nets go, Florida is one of the most heartless, uncompassionate states in the country. Oh, and I paid premiums my entire working life for SSDI and Medicare, and am still paying for Medicare. I live in a 12′ x 20′ 1 room apartment and close to half my payment goes to keep a roof over my head. I don’t want anyone to get the impression that we live like drunken lords out here. Sometimes I think it would have been better if I had died on the operating table during my first open heart. No it wasn’t a bypass. Neither of them were. I haven’t been to a movie or play in 15 years…

  • ccaffrey

    Let’s remember that when you use the term convicted felons, in some states that means someone who was convicted of having an ounce of pot. And it could be a one-time offender on THAT charge, depending on if the state has mandatory minimum sentencing laws. People have a tendency to think of rapists and murderers and violent offenders when they think of “convicted felons”. If they are poor, even worse. It is not uncommon for a client represented by an oveworked public defender to have one meeting 5 minutes before the court date, with a plea bargain already worked out. They literally meet in the “halls” of Justice.

  • Sandra

    How any of the top 1% with incomes still rising, sleep at night is beyond me, as well. Greed has no bounds.

  • Gerald Blanchard

    Franseenit, could you give me one name of someone with all these benefits from those so-called taxpayer programs. If you can’t, admit you don’t know what the hell you’re talking about.

  • Shelley

    I worked for Goodwill….this article is just the tip of the iceberg. Racism, sexism and all sorts of behavior that I am sure, if most folks knew about, would never EVER donate to, or shop from Goodwill again!

  • Cantsaymyname

    Goodwill Industries fears bad publicity. When a California distribution center employee used his key to open up the closed facility to sell donated and new merchandise and pocket the money, he was caught, but never reported for prosecution because management feared it would affect donations.

  • Trent

    Most people in the U.S. are paid market wages, so right there, your argument falters. Carpenters, plumbers, newspaper reporters, people working in factories–very few of these people are paid minimum wage, and few(er and fewer) are in unions. That said, my post wasn’t about minimum wages, but about the concept of maximum wages, which the article seems to flirt with.

  • Trent

    My question is what the remedy is, but for your simple mind, I’ll say “no.”

  • Gigi

    I have two things to say about Goodwill and you make of it what you will. 1. the Goodwills out here in CA are listed with the courts, and to get out of a court ordered fine, you can do community service in Goodwill stores. UNPAID. 2. they do not do maintenance on their stores. the one next door to the store where i work had a broken a/c all summer last year. 100+ degrees inside the store.

  • hubbards524
  • hubbards524

    I wrote a petition to close this loophole. Let’s get this issue attention by the lawmakers! https://petitions.whitehouse.gov/petition/close-loophole-section-14c-fair-labor-standards-act-1938-disabled-people-deserve-fair-wages/l3k7rPd4

  • hubbards524

    ccaffrey, sign the petition on We the People to get this attention from federal lawmakers. with 100,000 signatures, the petition will receive an official review and response. help these workers get a fair minimum wage. https://petitions.whitehouse.gov/petition/close-loophole-section-14c-fair-labor-standards-act-1938-disabled-people-deserve-fair-wages/l3k7rPd4

  • https://plus.google.com/106112178230621322095/posts/p/pub Twisted Crone

    I am usually one to jump up for the unders here, however, I have done some volunteer work with the disabled that are in these “programs”, almost every single one of them is UNABLE to do a Full time “regular” job! Which is Why they are Disabled! Working with them it is more like supervised “activities” at best, certainly NOT WORK as it would be performed by “regular” workers!

  • Mr. Tea

    I worked at my local Goodwill for a year and a half and can say with absolute conviction that yes, Goodwill really is as bad as everybody says. Goodwill’s entire purpose is to exploit the generosity of donors and disadvantaged people from all walks fo life for the benefit of “the people upstairs”. Never in my life have I been so used, abused, and taken advantage of by anyone, anywhere, in my entire life.

  • Mr. Tea

    Amen! I have about a year and a half’s worth of experience with Goodwill, and completely agree with you. Exploiting disadvantaged and disabled people is Goodwill’s whole reason for existing.

  • Victoria Smith

    I’m sorry

  • Victoria Smith

    I know the Salvation Army demonizes gay people

  • Shelley D

    I’m by no means defending the practices of GW…but I wonder if the disabled employees were paid Federal minimum wage would they lose their federal benefits such as SSI or Medicaid? Which would be most beneficial to them?

  • Finnsmom1

    This article really distresses me. I’ve taken a great deal of pride in donating to Good Will over the years rather than having a yard sale and because Salvation Army donates to anti Marriage Equality groups, I would never bother with them.
    It looks like a very inexpensive yard sale or a big “Free Sign” is now the way to go.

  • Patty

    I am so disappointed to learn this. I have supported the Goodwill in my community for decades and thought I was helping. Now I find I have been funding a group guilty of abusing handicapped individuals. These laws need changed.

  • Spankylee Wayne

    ever heard of shopgoodwill.com? this is the auction site where all the good stuff while they pack the stores with crap….damn SCAM !!!
    .

  • Terry Wissman

    Franseenit you are a total and absolute liar of the worst kind. You have NO clue as to how real people live with any Federal assistance, yet you open your foul mouth and spew that kind of venom with no thought. YOU are the problem in this country. As much as I hate to say it…I really hope you have to live someday on an income that the less fortunate do here…..and I hope it will be until the end of your worthless and pitiful life. Maybe next go around you will be worthy to call yourself a ‘human being’.

  • Daniel Waitkoss

    Usually, as long as you make below a certain limit (about $1000 per month) your beenfits will not be reduced if you work while disabled. The Social Security Administration has a “Ticket to Work” program that will help a person find work through local agencies. Goodwill is one of these, howeer, if you find that the organization isn’t working for you, you are allowed to change. There are other perks, too. Many of these jobs available are minimum wage jobs, however, the worker might need to scale back the hours to not go over the threshold.

  • Laurie Alderman

    That’s the problem with me…if I earn $1 a month, I lose so many benefits. The disincentives in the system to full employment need to be examined. There are so many scenarios. Mine is that I am on SSDI only, and I am at the highest income limit for Medicaid with just the SSDI. If I earn $1, I would have to pay first, $600 a month. Then I would be under a program for a year, where they would allow me to have my SSDI, and buy in to Medicaid at a low cost after the $600 a month (depending on my income earned…it starts at $50 a month for Medicaid going up depending on income. I have the ability to earn a high wage if I medically get well. I have a masters degree in a health care field and can earn $35 an hour. Problem is, return to work programs are not designed for high wage earners. If I am only able to return part-time because of my medical condition (which is most beneficial to me), after the one year SSDI program, I meet the income limits too fast. I would get thrown off SSDI, Medicare, Medicaid, etc., and end up in the situation I was before… sick and using half of my wages on private insurance and medical bills. While mine is not the same as the average Goodwill employee, it does show what disincentives are in the system!!

  • Franseenit

    I am so sorry to hear of your plight. Florida – and some others – is not a good place to live with the kind of problems you have. Unfortunately our state has been a magnet for citizens from certain southern states and our state is suffering now as well. I am referring to private non-profits that do get SOME federal funding but also have professional fund-raisers. Still I agree with the article that the imbalance of their CEO pay as to what the employees get paid to do all the assistance work for the ‘clients’ is really awful. I seriously wish I could wave a magic wand and solve all these problems. Lest you think I am a selfish ‘head in the sand’ person, I am not. I do much volunteer work – yesterday, I risked my personal safety and picked up a guy at the roadside who was trying to get to a location farther than I was intending to go so he could be there first thing this morning for a job interview. So, please, I’m sorry that you took offense to my comments. I work very hard to help make things better – best of luck to all those who hated my comment.

    Please keep contacting agencies or churches – I think our country should be ashamed of themselves – specifically at the very top who STEAL our country’s wealth for themselves and then ridicule the rest of us.

  • Franseenit

    Terry Wissman – I am totally aware of the shortcomings of our Federal Assistance programs. They alone are definitely not adequate. Please continue to seek out agencies of all kinds that will help you layer various sources of assistance – by the way I pay cash to people I know are on assistance for odd jobs all the time. Since my business was destroyed by Wall Street – yes, I blame them – I have had incredible economic problems – heading into my elder years it is not a good feeling. I recently had my power turned off because of being behind on my bill – I have no TV, no tickets to entertainment, a 12 year old auto – but I work hard at staying healthy – it’s what will get me through this. I can’t seem to get a job even though I was a highly respected professional at one time. Wall Street robbers are to blame – without a doubt.
    The non-profit agencies need to shape up – it is a dirty shame that they are allowed to enslave the clients/people that come to them for help so they are still dependent on government healthcare programs. In the meantime they take million, sometimes multi-million dollar compensation packages – Yes, OMG, what a travesty!
    Please see my other responses. Best wishes to you – my heart goes out to you.

  • Jonna

    I have always wondered, where is the best place to donate clothing? I have many really decent pieces that ill never fit into again! Then, I hear all these bad stories about these charity organizations that take money, that should go to the unfortunate! I have a closet full of clothes, that I could just empty out! I keep them, so I can give the the best place.

  • Alphax13

    But Salvation Army doesn’t believe in Marriage Equality.

  • imussuallyright

    I haven’t heard that either. Please clarify and provide sources. It’s a methodist organization. Methodists are more welcoming of gay people than most religions. Not saying what you say isn’t true and maybe I’m ignorant for not knowing, but I just want some evidence of it before I stop my monthly donations.

  • Gregory Geddings

    I have been blogging about our local, very corrupt Goodwill franchise for going on three years now (Goodwill Industries of Lower South Carolina-aka Palmetto Goodwill). If you google “Brian Williams NBC Goodwill”, towards the top of the results you will see an article I published in December of last year concerning not just the payment of sub-minimum wages, but also an account of how Goodwill’s huge public relations machine bamboozled NBC into doing a fluff piece about their fake charity.

    http://2big2fallphotoshop.wordpress.com/2012/12/11/nbcs-brian-williams-promotes-fools-gold-rush-for-goodwill-industries/

  • Gregory Geddings

    Maybe it’s time for Goodwill to come out of the closet? Change your name? A little truth in advertising, perhaps?

  • Gregory Geddings

    Even Mr. Burns loves Greedwill!

  • hubbards524
  • Gregory Geddings

    That there is Bob Smith, the CEO of Goodwill Industries of Lower South Carolina. He is as crooked as they come. Local media has been coddling this creep for over two decades. I caught him lying to our local newspaper, published an article on my blog about it, and have been sitting around twiddling my thumbs for two years waiting for our local mainstream journalists to pick up the story.

    That’s just not going to happen as these “reporters” are on his party list and are always present at top-notch catered Goodwill shindigs. They are as damned crooked as he is.
    http://2big2fallphotoshop.wordpress.com/2012/06/11/did-palmetto-goodwill-ceo-lie-to-the-charleston-post-and-courier/

  • Gregory Geddings

    By the way. This is the best written, most thoroughly researched article I have ever read concerning Goodwill Industries. Kudos to the staff of Watchdog!

  • jewels

    It is so sad that so much GREED has taken over this country. The executives walk all over their employees just to get another nickel. There will be rewards in heaven for the meek and mild. The greedy will fight the devil for a penny. The bible says the meek shall inherit the earth. May God have mercy on US all.

  • Joann Koch

    I use to work for Goodwill in the accouting department and had to assist with payroll. I wa

  • Jinetrix

    I can give a name of someone like that. I work for a Goodwill and one of my legally blind (he is unable to drive or operate heavy machinery but can see well enough to walk around and operate a computer) coworkers has a large condo in a co-op in an upper class area. Inside his condo he has a 60 inch flatscreen and 3 computers. He buys a new phone or computer or laptop or tablet every few months.

    On the exact opposite side of the spectrum we have other disabled employees in our e-Books program that are prescanning donated books for sale on Amazon or eBay. Our e-Commerce department mostly pays the disabled workers the same as non-disabled (as far as I know, I do not have direct access to the books but of the employees who have revealed their pay it is the same or higher than mine), I cannot say about the disabled workers in any of our other departments and I do not doubt or deny that there is a lot of greed and duplicity going on.

  • Disabled

    I have worked at WPAFB for Goodwill for the more than 7 years. it has been the practice of the management to dock an employee’s pay 1/2 hour for not taking a lunch at 6hrs. of work even if it is only 6hrs. and 1 minute. I have discussed this with each supervisor, the current supervisor said he signed paperwork to that effect and didn’t care if it was illegal. His response to it being illegal was “So”. I am diabled and struggling in our current economy and can not afford to lose what work I do have, as many others I work with. Also I do not recieve any federal assistance to subsidize my income. So forgive me for not posting my name. I will check later for any comments.

  • Dick

    Disgusting that they are taking advantage of these wonderful people while living the life of luxury

  • sunbeamcatcher

    It is as bad in Goodwill Industries Toronto. The corrupt bunch of ruthless parasites exploiting employees on social assistance under the provincially funded (100%) REACH program (Real Employment to Achieve Community Health), new immigrants under the title of “gaining transferable skills and Canadian experience” required by employers here, and now there is a talk of new avenues of exploitation. Disabled people – similar as in the USA. Former CEO – Ken Connelly , ex COO Vrijnayand Goutam, a new CEO – Keiko Nakamura were looking at this new possibility of gaining more slaves. Hopefully this investigative reporting and ensuing scandal will stop them in their tracks. Toronto Goodwill Industries is known for corruption, and “deals” with overseas questionable dealers in Africa and India, as well as local contacts with art dealers, auction houses and antique shop owners who pay well to get donated items of value through the back door.

  • sunbeamcatcher

    Yes they do – I read about an ex employee – a lesbian – who was let go the moment they learned she was gay.

  • sunbeamcatcher

    So sorry…

  • sunbeamcatcher

    why don’t you help him?

  • sunbeamcatcher

    you are aware of nothing greedy little pig, and why don’t you start working towards betterment of this situation instead of spending time on social media? lazy ass

  • sunbeamcatcher

    same in Canada – psychopaths crawling all over the place

  • Franseenit

    You know absolutely nothing about my struggles – and if you do not understand what our Washington freeloaders are helping to set up for the privileged few you are certainly not paying attention. The banks and wealthy individuals are buying up our natural resources, our infrastructure, our commercial buildings and residential areas, creating ‘non-jobs’ – if you don’t know what I am talking about you need to spend more time paying attention to the investigative reporting.

  • sunbeamcatcher

    Your comments demonstrated such a lack of insight into lives of people on social assistance that I decided to respond. I am sorry for what happened to you – there is a steadily growing number of people who find themselves in similar to your circumstances. However, lashing out at those on social assistance and lumping them together (like they are out to get your money…) is simplistic and will not give you or anyone a true resolution you are yearning for. This much is obvious – regardless you realize it or not. People who steal OUR money, OUR efforts, OUR productivity, OUR rights come from the most powerful financial elites stirring the pot for generations. It is not a disabled person in Goodwill earning 5 cents or 10 cents per hour who is robbing you. You might be disabled one day – those things happen to a lot of us. Should you be thrown under the bus as unproductive useless clog? What kind of thinking is that? A desperate slave controlled by freaks from Wall Street and global financial centres? Look how they own you – you are incapable of showing compassion and support – just ready to jump and destroy the weak ones. You have a mindset they want you to have so you will act like a robot programmed to do destroy those they want to be destroyed – ultimately yourself. Get a little below the surface of things and you will have more peace to see what is going on here.

  • Franseenit

    You totally misunderstand – I feel that the CEO’s are being paid way too much while the people they supposedly are helping will never have a way to pull themselves back up. We can not continue to add to the roles of dependent people if there is a way to help them get re-established. Often folks are required to totally lose everything before they even become eligible for any assistance. How will they ever be able to rebuild and care for themselves? I am not sitting here feeling sorry for myself as you say. And I also volunteer to help people find jobs – real jobs that they can actually feed themselves – and grow – establish their self-confidence once again. Why do you keep railing on me? I am very active politically as well – am on several political advisory committees – so you see, I’m on your side and work at making it better for anyone that has met misfortune – now it’s time for you to channel your anger toward productive projects.

  • sunbeamcatcher

    It is not about you personally, don’t flatter yourself.

  • Mercedes Marton

    Here where I live, Salvation Army gets truck load of brand new stuff from Target. They sell the stuff full price. The prices are almost as much as a consignment store.

  • Mercedes Marton

    IMHO a CEO could not make more than 10X what thew lowest worker makes. If he wants to make 800K he should pay his people accordingly

  • Mercedes Marton

    I used to work to a wonderful company that was mainly for the disabled. The way they worked it out was shorter days. They only worked 4 hours our every second day, but git minimum wages. Also the company pays for its employees immigration fees (many refugees there too). I love and respect that place. The CEO knew 90% of the employees’ name and they had over 1500 people. Goodwill and other thrift stores are just smoke screen to the greedy bigwigs. The only non profit that is for the lower employees

  • Mercedes Marton

    yup…….

  • Mercedes Marton

    orrect. Because most of them already have SSI

  • imussuallyright

    Ok. Fair enough. Two things though. One, please cite the article you read and two, this is one example. Unless it’s a widespread issue, I would still find it hard to write off an entire charity as demonizing.

  • imussuallyright

    lol. I seriously doubt that. I’ve been into these stores and the stuff is generally super cheap. I’ve never seen any new stuff but I’ll take your word for it. However, it’s still not the same as a place like goodwill. The revenue from bell ringers and in store sales goes to fund other charity work across the globe. Selling clothes and other goods at a low price isn’t the primary goal of the charity. Goodwill takes donations, sells them, and then a few people line their pockets with the profits. The salvation army does the same thing except no one is getting rich off of it. Most of the money goes right back into the charity.

  • Context provider

    How about a little context? According to the numbers provided in this story, yet apparently ignored by the writer and by those commenting, Goodwill employs just 2.4 percent of the 300,000 people with disabilities working under 14c regulations. Why, then, does 100 percent of this story aim its criticism at Goodwill? In addition, the independent Charity Watch says, nationwide, Goodwill returns more of its revenue to its missions than Salvation Army – 89 percent vs. 84 percent.

  • roberto

    if goodwill is a none profit organization,why we pay sales tax?

  • roberto

    another thing,why the prices are so high? sometimes more than new items.

  • rj

    Goodwills pay structure is built to maximize profit at the expense of the people it claims to help. How long do the job placements they pat themselves on the back for last? How much of their placement is because of insanely high turnover? How many unemployable people are trained and counseled to become employable. How many of the underwage earners are trained into anything above minimum wage at good will? How many of these under wage earners stay after their matching government subsidies run out stay to work at goodwill?? Who checks to see if what is claimed to the irs matches even what they spend on upper mgmt. How many goodwill employees have gone from minimum wage to management or upper management? These are the things I want to hear from these self patting on the back ceos at goodwill.

  • tim bennett

    the rhabililitation counselor told me i would be working only for 6 weeks i worked 34 days at goodwill industries 1235 south elm eugene street in greensboro my counselor judy lockhart told me i had to work another 30 days i told her i’m not interested they wanted me to clean the bathrooms i said no about 2 weeks i get a call and asked me if i’m going back to goodwill industries i told her no 3 months later october 23rd she called and asked would i reconsider going back to goodwill industries i said no i only made$335.10 total pay it’s nothing but a joke

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