The Commensurate Wage Fallacy

https://nfb.org/blog/vonb-blog/commensurate-wage-fallacy
Submitted by alewis on Mon, 04/15/2013 – 09:36
Blog Date:
Monday, April 15, 2013
By Anil Lewis

Under Section 14(c) of the Fair Labor Standards Act, a flawed formula has been used for years to calculate the commensurate “piece rate” wage for workers with disabilities.  This formula, based on average wages and survey data, works mathematically, but fails the common sense test.  My twelve-year-old stepson asked me the following question from his math homework: If Johnny can run one mile in two minutes, how fast can Johnny run two miles?  He knew that the expected answer was four minutes.  However, he also had the common sense to know that Johnny would get tired, and it would take Johnny more time to run each consecutive mile.  I told him to put four minutes as the answer.  He got an “A” on the homework, but he did not understand why he got an “A” for the wrong answer.  I validated his common sense and applauded the fact that at twelve years old, he understood the root of the commensurate wage fallacy.  The commensurate “subminimum” wage formula used by over three thousand employers to determine how much they should pay their workers with disabilities is based on the same flawed logic as the math problem.

Before we get to the real commensurate wage fallacy, we must discuss how the prevailing wage is determined.  A subminimum wage employer must conduct an annual wage survey of private sector jobs in the employer’s geographic area that are similar to the jobs being performed by the workers with disabilities.  Then the employer takes the average of at least three of these industry wage rates to determine the hourly prevailing wage for the job.  For example, if three private sector employees are being paid $8.25, $8.30, and $8.35 respectively, the average wage rate of $8.30 would be the prevailing wage used in the commensurate wage formula.

The math is correct, but common sense tells you that the subminimum wage employer gets to shop around to determine which industry wage rates to use, so if there is a private sector employee being paid $9.00 for a similar job, there is no requirement for the employer to use this higher wage in the calculation.  It is more likely that there are no similar jobs in the community, in which case the employer should use the federal minimum wage of $7.25 (or the higher state minimum wage, if one applies) as the prevailing wage.  Some subminimum wage employers illegally use less than this amount; and with little to no oversight, this exploitation goes unaddressed for years.

The most convoluted and manipulative step used to determine the commensurate wage is for the employer to conduct a time study.  The employer chooses an experienced nondisabled worker to perform the job for twenty minutes.  Ideally, this is done for at least three cycles by the same person or three different people.  This provides three productivity rates that are then averaged to determine the average “piece rate.”  Therefore, if thirty-eight items are produced in the first cycle, forty items are produced in the second, and forty-two items are produced in the third, the benchmark would be set for the workers with disabilities to produce forty items in twenty minutes, or two items per minute.  This means the expectation is for the workers with disabilities to produce 120 items per hour in order to be paid the $8.30 prevailing wage.

Again, the math is sound, but common sense tells you that the employer can conduct many more time studies and choose the results to manipulate the commensurate wage outcome, ignoring those time studies in which less than thirty-eight items are produced.  Essentially, the employer can conduct as many time studies as necessary to justify the wage that the employer would like to pay for the job.

Common sense also tells you that it is unfair to set a productivity benchmark for an entire work day using only a twenty-minute time study.  Think of it as another version of my stepson’s math problem:  if Johnny can produce 120 items in an hour, how many can he produce in two hours?  My twelve-year-old stepson knew the answer.  He realized that Johnny would get tired, and his productivity would decrease over time.

The commensurate wage professionals state that they take all of this into consideration by providing a 15 percent time allowance for Personal time, Fatigue, and Delay (the PF&D factor).  This is calculated to be nine minutes per hour, which many employers round to ten minutes per hour.  Therefore, the productivity expectation set for the workers with disabilities under the earlier scenario would be for them to produce one hundred items per hour in order to earn $8.30.  This is more commonly stated to be a piece rate, where the workers with disabilities are paid eighty-three cents for each item they produce.

Although the PF&D allowance may bring the productivity expectation in line with the worker’s reasonable ability to produce over time, this cannot be considered an adequate adjustment for personal time, fatigue, and delay inclusively.  Most subminimum wage employers do not encourage the PF&D allowance to be used for breaks.  Although most employers are required to provide nondisabled employees a ten-minute paid rest period for every four hours worked, the sheltered subminimum wage workshops are excluded from this requirement.  In fact, the ability to work without a break is presented by the subminimum wage employer as a benefit to the workers with disabilities, who are encouraged to work as much as possible in order to earn as much as possible.  This type of pressure produces stress; the stress results in mistakes; and mistakes result in defective products that the workers do not get paid for producing.

Delay is also out of the control of the worker.  The workers cannot produce anything if the employer is delayed in providing them materials to produce the item, and unlike the nondisabled workers that get paid an hourly rate, the workers with disabilities do not get paid when they are not producing products.  The legal requirement to pay for down time is at the discretion of the employer, and if an employer does not provide production supplies in a timely manner, the workers with disabilities can be left idle for much more than ten minutes without the supplies to produce anything, thus earning nothing.

The unspoken math is that there are currently over three hundred thousand people with disabilities being paid wages below the federal minimum. Specifically, 50 percent of these workers receive less than half the federal minimum wage, and 25 percent receive less than one dollar per hour, some as low as three cents per hour.  The common sense truth is that most of these individuals are already productive enough to earn the federal minimum wage; they are just victims of the flawed wage formula.  Others could be productive enough to earn the federal minimum wage if provided the proper training and support, but will never receive either the training or support while segregated in a subminimum wage work environment.  Those individuals being paid less than one dollar per hour are truly not ready for work, but the subminimum wage employers assert that these workers are being afforded an opportunity to experience the tangible and intangible benefits of work.  The workers with disabilities get the extremely intangible benefit of subminimum wages.  The executives get the true tangible benefit from the public and private dollars meant to support the workers with disabilities, but used instead to support the six-figure salaries of the executives.  The subminimum wage employers are essentially getting an “A” for the wrong answer.

The fallacy here is that the workers with disabilities are supposedly being paid based on their productivity.  If the employers truly believe that the commensurate wage model is adequate and fair for workers with disabilities, why not use the commensurate wage formula to calculate the wages for all of the sheltered workshop employees, including the executives?  My twelve-year-old stepson would know the answer to this question as well.

Visit www.nfb.org/fair-wages to get more information, and add your name to our online petition to help us stop the perpetuation of the commensurate wage fallacy.

Mr. Anil Lewis, M.P.A.
Director of Advocacy and Policy
“Eliminating Subminimum Wages for People with Disabilities”
http://www.nfb.org/fairwages

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@nfb.org
Web:
www.nfb.org
twitter: @anillife 

FCC Adopts Rules on Emergency Information and Video Equipment Requirements for Emergency Information and Video Description

Accessible Televised Emergency Information. On April 8, 2013, the FCC adopted rules to make televised emergency information more accessible to individuals who are blind or visually impaired. The new rules require emergency information that appears visually during a non-news program (such as when information about the emergency appears visually on the bottom of the screen during a regularly scheduled program) to be provided audibly on a secondary audio stream. The rules will take effect two years after publication in the Federal Register. However, The Weather Channel has an additional 6 months to comply, and The Weather Channel on DIRECTV has an additional 1 year to comply.

New Requirements for Equipment. The FCC also adopted rules to ensure that certain equipment used to receive, play back, or record television programs is able to make secondary audio streams available. Secondary audio streams will convey emergency information, as well as the video description that makes programs accessible to individuals who are blind or visually impaired. These rules also go into effect two years after they are published in the Federal Register.

Further Notice of Proposed Rulemaking (FNPRM). In addition to adopting the new rules, the FCC is asking the public to comment on three issues:

(1) whether the FCC should require companies covered by the new rules to provide contact information and customer support services to help consumers who are blind or visually impaired navigate between the main and secondary audio streams;

(2) whether new services that deliver certain types of television programming over tablets, laptops, personal computers, smartphones, or similar devices should be covered by the FCC’s requirements for video description and accessible emergency information; and

(3) whether the FCC should require accessibility content on the secondary audio stream to be tagged in a manner that enables equipment to detect this content when it is present – this will make it easier for consumers who are blind or visually impaired to find the secondary audio stream.

FNPRM Comment Date: (60 days after date of publication in the Federal Register)

FNPRM Reply Comment Date: (90 days after date of publication in the Federal Register)

Report and Order and Further Notice of Proposed Rulemaking:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-13-45A1.docx

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-13-45A1.pdf

Statement issued by Commissioner Clyburn:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-13-45A2.docx

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-13-45A2.pdf

Statement issued by Commissioner Rosenworcel:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-13-45A3.docx

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-13-45A3.pdf

Statement issued by Commissioner Pai:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-13-45A4.docx

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-13-45A4.pdf

For more information, contact Diana Sokolow, Diana.Sokolow@fcc.gov, or Maria Mullarkey, Maria.Mullarkey@fcc.gov, of the Media Bureau, Policy Division, (202) 418-2120.

 

National Federation of the Blind and Two Blind Taxpayers File Suit Against H&R Block

Boston, Massachusetts (April 8, 2013): The National Federation of the Blind (NFB), the oldest and largest organization of blind people in the United States, and two blind taxpayers residing in Massachusetts—Mika Pyyhkala and Lindsay Yazzolino—filed suit today in the United States District Court for the District of Massachusetts (Case 1:13-cv-10799-GAO) against the digital arm of H&R Block, which prepares approximately one in six tax returns in America and claims to be “the only tax preparation company capable of serving clients anyway, anywhere and anyhow they want to be served.” The complaint alleges violations of the Americans with Disabilities Act (ADA) and Article 114 of the Massachusetts Constitution as enforced through the Massachusetts Equal Rights Act (MERA) because the company’s online tax services and Web sites are not accessible to blind taxpayers.

Blind people access computers and Web sites through screen access software that converts what is on the screen into spoken words or Braille, but improperly coded Web sites and applications can prevent this software from working properly, denying the blind user equal access. Both Mr. Pyyhkala and Ms. Yazzolino unsuccessfully attempted to file their 2012 tax returns using HRBlock.com. The plaintiffs are requesting the court to certify the suit as a class action.

Dr. Marc Maurer, president of the National Federation of the Blind, said: “As millions of Americans rush to prepare and file their taxes online using H&R Block’s popular Web sites, blind people are unable to do so because the company has refused to make its Web site accessible to us. For most blind people, this means that they must obtain assistance filing their tax returns, rather than having the option to do so privately and independently. The laws of the United States and the state of Massachusetts require, and blind Americans demand, that H&R Block make all of its online services accessible to blind taxpayers.”

The National Federation of the Blind and the individual plaintiffs are represented in this matter by Christine M. Netski of the Boston firm Sugarman, Rogers, Barshak & Cohen, P.C., and Daniel F. Goldstein and Gregory P. Care of the Baltimore firm Brown, Goldstein & Levy LLP.

The National Federation of the Blind needs your support to ensure that blind children get an equal education, to connect blind veterans with the training and services they need, and to help seniors who are losing vision continue to live independent and fulfilling lives. To make a donation, please go to www.nfb.org

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About the National Federation of the Blind

The National Federation of the Blind (NFB) is the oldest, largest, and most influential nationwide membership organization of blind people in the United States. Founded in 1940, the NFB advocates for the civil rights and equality of blind Americans, and develops innovative education, technology, and training programs to provide the blind and those who are losing vision with the tools they need to become independent and successful. We need your support. To make a donation, please go to www.nfb.org

 

Fair Wages for Workers with Disabilities

From the 2012 Annual Report of the National Federation of the Blind

The National Federation of the Blind is, at its core, a grassroots civil rights movement consisting of blind people, our family members, and friends. Our movement is founded on the principles of equality and full participation of blind people in every aspect of society. Although we have made significant strides toward achieving equality of opportunity, many barriers to our full participation as American citizens continue to exist. Most notable are the barriers that blind people face in our efforts to obtain competitive, integrated employment. Although laws prohibiting discrimination against people with disabilities in employment are in place, ignorance about the true employment capacity of the blind, lack of awareness about assistive work technologies among employers, the deficiency of proper educational and training opportunities for blind workers, and the overwhelmingly low vocational expectations for the blind held by society all contribute to an unemployment rate of over 70 percent for working age blind adults. Members of the NFB accept the responsibility and welcome the opportunity to play a part in developing strategies to address all of these issues effectively, but our ability to be successful is significantly hindered when we are denied the same fundamental rights as every other American citizen.

In 1938, policymakers, acting on a laudable but misdirected desire to integrate people with disabilities into the workforce, implemented Section 14(c) of the Fair Labor Standards Act, a provision that authorizes the U.S. Department of Labor to issue Special Wage Certificates to employers, permitting them to pay workers with disabilities less than the federal minimum wage. As a result of the erroneous belief, commonly held in 1938 but long since disproved, that people with disabilities cannot be productive employees, employers are permitted to pay workers with disabilities subminimum wages that are supposedly based on their productivity. This denial of fundamental wage protections to workers with disabilities, although masked as a compassionate offering of a work opportunity that would otherwise not be available, leaves over 300,000 people with disabilities employed at subminimum wages, some as low as three cents per hour.

Members of the National Federation of the Blind are faced with over seventy years of institutionalized thinking that people with disabilities lack the ability to fully participate in the workplace, and we fight every day to demonstrate to the world that blind people have capacity.  Because we have dared to believe in ourselves, today there are blind lawyers, doctors, engineers, teachers, members of the clergy, automobile mechanics, computer programmers, farmers, and more. The truth is that there are any number of jobs that match the unique skills, talents, interests and abilities of people with even the most significant disabilities.  Moreover, assistive technology exists that allows people with disabilities to perform job tasks with the quality and efficiency of non-disabled employees.  Although the diversity of jobs and the availability of assistive technology have made it possible for individuals with all disabilities to be productive employees, society’s negative attitudes and low expectations continue to severely limit opportunities for competitive employment. And as long as it remains legal to pay workers with disabilities less than the federal minimum wage, there will be those who exploit these misconceptions in order to justify employing workers with disabilities at subminimum wages, leaving hundreds of thousands of individuals in segregated work environments that are separate and unequal.

Despite research demonstrating that segregated, subminimum wage work environments teach workers with disabilities obsolete skills and unproductive work habits that must be unlearned in order for them to become competitively employed, along with well-documented cases of subminimum wage employees working in poor conditions that are not acceptable in any modern workplace, advocates of Special Wage Certificates argue that the answer is simply better enforcement of compliance with current federal and state rules. But perpetuation of the current system is acquiescence in the face of discrimination. Slavery, the denial of the right to vote for women, and other forms of discrimination against classes of individuals based solely on a characteristic that the individuals possessed were once lawful. Society eventually realized that the only way to eliminate such discrimination is to make it unlawful. Section 14(c) of the FLSA, enacted out of ignorance about the true capacity of people with disabilities, is fundamentally morally wrong. The only way to correct this injustice is to repeal this discriminatory provision.

In 2012, the National Federation of the Blind made significant progress toward achieving this goal. What started as our single voice calling to have the law changed has grown into a chorus of fifty organizations of people with disabilities making this demand. Eliminating subminimum wages was not part of the conversation about disability rights before we began to speak out, but by the end of 2012 the National Council on Disability, a federal agency that advises Congress and the President on disability issues, had issued a report recommending that subminimum wages be phased out.

We are the voice of the nation’s blind, and we will use our voice to speak out against people, policies, or programs that seek to exploit us or reduce us to a status of second class citizenship. We look forward to a day when all Americans have wage security, real opportunity, and true equality. Add your voice to ours by signing our online petition at: http://www.nfb.org/fair-wages-petition.

For more information on this important issue, please visit www.nfb.org/fair-wages.

 

Mr. Anil Lewis, M.P.A.
Director of Advocacy and Policy
“Eliminating Subminimum Wages for People with Disabilities”
http://www.nfb.org/fairwages

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@nfb.org
Web:
www.nfb.org
twitter: @anillife 

National Federation of the Blind Applauds DOJ Motion to Intervene in Sheltered Workshop Case

Baltimore, Maryland (April 2, 2013): The National Federation of the Blind today applauded the United States Department of Justice’s motion to intervene in the pending class action lawsuit Lane v. Kitzhaber, No. 12-cv-138 (D. Or.). The United States’ complaint in intervention alleges that the state of Oregon has violated Title II of the ADA and Section 504 of the Rehabilitation Act by unnecessarily segregating thousands of individuals with intellectual and developmental disabilities in sheltered workshops, and by placing them at risk of such segregation, when they could be working in integrated employment settings with appropriate supports and services, such as supported employment.

Dr. Marc Maurer, President of the National Federation of the Blind, said: “The National Federation of the Blind supports efforts to integrate more Americans with disabilities into competitive, integrated employment settings and to ensure that youth who are blind or who have other disabilities are not unnecessarily tracked into sheltered workshops, many of which pay their workers significantly less than federal or state minimum wages.  We therefore applaud the United States Department of Justice for moving to intervene in this potentially groundbreaking litigation.”

The National Federation of the Blind needs your support to ensure that blind children get an equal education, to connect blind veterans with the training and services they need, and to help seniors who are losing vision continue to live independent and fulfilling lives. To make a donation, please go to www.nfb.org.

 ###

 About the National Federation of the Blind

The National Federation of the Blind (NFB) is the oldest, largest, and most influential nationwide membership organization of blind people in the United States.  Founded in 1940, the NFB advocates for the civil rights and equality of blind Americans, and develops innovative education, technology, and training programs to provide the blind and those who are losing vision with the tools they need to become independent and successful.  We need your support.  To make a donation, please go to www.nfb.org