Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The federal minimum wage has been around in the US
Speaker 2: for nearly ninety years. Today, it's set at seven twenty
Speaker 2: five an hour. By law, employers in the country can't
Speaker 2: pay workers less than that amount, but it doesn't apply
Speaker 2: to everyone.
Speaker 1: From the time that Congress created a wage floor for
Speaker 1: the country, legislators also created an exception.
Speaker 2: Josh Eidelson is a senior reporter for Bloomberg covering the workplace,
Speaker 2: and he spent the past year looking into a program
Speaker 2: that for decades has allowed employers to pay a certain
Speaker 2: group of workers below that federal floor, workers with disabilities.
Speaker 2: The program is called fourteen C.
Speaker 1: The fourteen C program was created by Congress to ensure
Speaker 1: that the labor of people with disabilities would not be
Speaker 1: too expensive for companies to want to purchase it.
Speaker 2: Fourteen C is a section of labor law in the
Speaker 2: US that lets employers pay sub minimum wage rates to
Speaker 2: people with a range of disabilities based on their productivity,
Speaker 2: and in some extreme cases. Josh says, the rate employers
Speaker 2: come up with is close to zero.
Speaker 1: Records I reviewed show employers have reported paying, in one
Speaker 1: case as little as five cents an hour to an employee.
Speaker 2: Fourteen C workers have packaged medical supplies in Missouri and
Speaker 2: lipstick for Grammy Award gift bags. They've worked as janitors,
Speaker 2: assembled car owners' manuals and clean parts used to build
Speaker 2: F thirty five fighter jets, and people's views on the
Speaker 2: program can be divided. There are people like Brady Bartley,
Speaker 2: a twenty nine year old with autism who worked in Ohio.
Speaker 3: You just sit there and you're like, Wow, these people
Speaker 3: are really taking advantage of me here.
Speaker 2: And people like Michelle Jardine, a sixty year old with
Speaker 2: an intellectual disability and borderline personality disorder who works at
Speaker 2: a nonprofit in Texas.
Speaker 4: I just love it here. It's not perfect, but it's
Speaker 4: close to it. It's the only place I have been
Speaker 4: in and I'd met so many friends.
Speaker 2: Now, fourteen C workers are at the center of a
Speaker 2: debate over whether a program that was designed to create
Speaker 2: more opportunities for people with disabilities is actually living up
Speaker 2: to that promise, and whether it should exist at all. Today,
Speaker 2: on the show, the Battle over the future of sub
Speaker 2: minimum wage jobs in the United States. This is the
Speaker 2: big take from Bloomberg News. I'm Sarah Holder, Bloomberg Senior
Speaker 2: reporter Josh Idelson says that when Congress created the program
Speaker 2: that would become fourteen C in nineteen thirty eight, it
Speaker 2: was framed as a necessary exemption to the federal minimum wage,
Speaker 2: meant to help both employers and people with disabilities.
Speaker 1: There was concern that with a federal minimum wage that
Speaker 1: said you have to pay any employee this much per hour,
Speaker 1: there would be people whose disabilities made them work less productively,
Speaker 1: who would therefore not be hired or not stay hired
Speaker 1: by employers.
Speaker 2: And when we're talking about workers with disabilities who are
Speaker 2: eligible for this program, what range of disability does it encompass?
Speaker 1: Disabilities such as cerebral palsy autism. In recent years, most
Speaker 1: workers paid a fourteen C subminimum wage have had some
Speaker 1: sort of intellectual or developmental disability.
Speaker 2: And how do these companies determine the pay rate for
Speaker 2: employees with disabilities.
Speaker 1: It's complicated by law. The pay under the fourteen C
Speaker 1: program is supposed to be commensurate, meaning that workers are
Speaker 1: being paid in proportion to their productivity. The amount less
Speaker 1: than the federal minimum wage that a fourteen SEED worker
Speaker 1: can be paid is supposed to be in proportion to
Speaker 1: the amount less that they are producing at a task
Speaker 1: as compared to a non disabled worker, and there is
Speaker 1: a lot of responsibility on the employer. They're supposed to
Speaker 1: figure out what non disabled workers in the area doing
Speaker 1: that job generally make. They're supposed to figure out what
Speaker 1: amount of work a non disabled worker would get done
Speaker 1: in an amount of time. So that's generally done with
Speaker 1: a stopwatch, timing how fast somebody else does the job.
Speaker 2: And how do all these metrics come together to calculate
Speaker 2: the wage that these workers are paid. What's the range there?
Speaker 1: Some workers under the fourteen Seed program end up making
Speaker 1: close to to the federal minimum wage or over it
Speaker 1: if they have a particularly productive hour. Other workers are
Speaker 1: making much less. Federal law does not set any specific
Speaker 1: floor that a worker has to be paid per hour
Speaker 1: under the fourteen SEA program.
Speaker 2: Many fourteen SEA employers are what's known as sheltered workshops.
Speaker 2: Those are often nonprofits that employ Americans with disabilities in
Speaker 2: a separate setting from other workers. These employers apply for
Speaker 2: fourteen SEA certificates exempting them from the normal minimum wage,
Speaker 2: and then they set piece rates or hourly rates for
Speaker 2: the workers they hire. Almost half of workers in the
Speaker 2: program make below three point fifty an hour. The Department
Speaker 2: of Labor said last year, nearly two percent make twenty
Speaker 2: five cents or less. Some of these employers have paid
Speaker 2: workers even less than what the program promises, according to
Speaker 2: investigations by labor departments under both Biden and Trump. In
Speaker 2: fiscal year twenty two twenty three, the Department concluded that
Speaker 2: more than eighty percent of the fourteen SEA employers it
Speaker 2: investigated weren't compliant and together owe their workers' millions in
Speaker 2: back pay.
Speaker 1: Critics of the fourteen C program say that this reinforces
Speaker 1: stigma and discrimination against people with disabilities, that it sends
Speaker 1: a signal to the public and to employers that people
Speaker 1: with disabilities are not equal and are not as capable
Speaker 1: as other workers. They argue, there's a whole lot that
Speaker 1: the government does, and even more the government could be
Speaker 1: doing to support integrated, dignified, well paying jobs for people
Speaker 1: with disabilities.
Speaker 2: But its supporters say the program provides an important employment
Speaker 2: option for people who might not otherwise have one. Tens
Speaker 2: of millions of American adults have some sort of disability,
Speaker 2: a broad category of conditions that can make it tougher
Speaker 2: to move perceive, communicate, or learn, and while about three
Speaker 2: quarters of non disabled working age Americans are employed, only
Speaker 2: about two and five of those with disabilities are.
Speaker 1: One of the arguments I heard over and over was
Speaker 1: that work in America can be hostile and unfair to
Speaker 1: people with disabilities, and that the outside world beyond these
Speaker 1: workshops has not met its responsibility to support people with
Speaker 1: disabilities and treat them fairly.
Speaker 2: In the course of his reporting, Josh reviewed federal and
Speaker 2: state records, visited fourteen C workplaces, and spoke with over
Speaker 2: one hundred people, including regulators, disability advocates, employers, and workers.
Speaker 2: One of the fourteen C employers Josh visited is called
Speaker 2: the Brookwood Community. It's a nonprofit where he met a
Speaker 2: woman named Michelle Jardine.
Speaker 1: Michelle has an intellectual disability which can make it harder
Speaker 1: to learn and understand instructions, and borderline personality disorder, which
Speaker 1: can lead to outbursts. She had a series of bad
Speaker 1: experiences in other workplaces.
Speaker 4: I was basically bullied in front of the coworkers, call
Speaker 4: me stupid, dumb, I'll never mount to anything, stuff like that.
Speaker 4: So it wasn't a healthy situation for.
Speaker 1: Me, and because of the bullying she says she experienced
Speaker 1: at other integrated workplaces, she switched and started working at Brookwood.
Speaker 4: Here I've learned that hey, I'm okay, I am kind,
Speaker 4: really kind and consider it, and I've met lots of
Speaker 4: friends here.
Speaker 1: She has a job there glazing in the ceramics shop.
Speaker 1: She makes a piece rate that on average amounts to
Speaker 1: around one to three dollars an hour.
Speaker 2: Mischelle receives financial support from her family and lives at Brookwood,
Speaker 2: and although she says she's found fulfillment and friendship there,
Speaker 2: her workplace is among those that have been found violating
Speaker 2: the terms of fourteen C. Brookwood has been cited twice
Speaker 2: by the Labor Department for violations like not conducting adequate
Speaker 2: time studies for employees and not providing required information on
Speaker 2: self advocacy and mentorship opportunities. After the latest case, Brookwood
Speaker 2: agreed to pay one hundred and fifty thousand dollars in
Speaker 2: back wages. The nonprofit says it's made changes to ensure
Speaker 2: its following the rules. Other workers who participated in the
Speaker 2: fourteen C program shared a different perspective, like Brady Bartley.
Speaker 1: Brady Bartley is a man with autism in Ohio who
Speaker 1: went to a fourteen C employer where he worked disassembling speedometers.
Speaker 1: You were getting paid how much at the beginning three dollars.
Speaker 3: There was not a lot a life livable amount to
Speaker 3: live off of. I've never been happier than when I
Speaker 3: worked at that place, but you can't survive off of it.
Speaker 1: Management there was very nice and was very smiley, but
Speaker 1: over time he concluded that they were ripping him off.
Speaker 3: At the time, I was kind of homeless, so it
Speaker 3: was really the only option I had at the moment.
Speaker 3: I literally lived off of nick Chickens for a dollar.
Speaker 1: And importantly, Brady, like many other people I talked to
Speaker 1: who worked in the fourteen C program and became critics
Speaker 1: of it, Brady says his employer was not at all
Speaker 1: trying to prepare him to find a better job somewhere else.
Speaker 1: He says his employer presented the outside world as a
Speaker 1: place that was hostile and scary.
Speaker 2: But eventually Brady found a new manufacturing job, one that
Speaker 2: pays above minimum wage in an integrated environment.
Speaker 1: He said he does get frequent breaks that are a
Speaker 1: helpful accommodation for him with his disability, and rather than
Speaker 1: three dollars an hour. He makes over twenty dollars an hour,
Speaker 1: and he didn't portray this job as some nirvana. He said,
Speaker 1: sometimes he gets made fun of for the way he talks.
Speaker 3: I have a lot of trouble with my words and stuff,
Speaker 3: so that people are very mean sometimes and you're going
Speaker 3: to have to work past that. But it's worth it.
Speaker 3: It's way better than no money. Tell you that.
Speaker 2: For people who oppose the sub minimum wage, stories like
Speaker 2: Brady's prove that fourteen C is far from the only
Speaker 2: option people with certain disabilities have to find meaningful employment
Speaker 2: that pays at least the federal standard. But for its defenders,
Speaker 2: stories like Michelle's highlight the ways fourteen seed jobs are
Speaker 2: deeply meaningful. These tensions have shaped the debate over the
Speaker 2: fourteen C program for decades, and they've recently been coming
Speaker 2: to a head. So what could the future of the
Speaker 2: program look like under President Trump? That's after the break.
Speaker 2: I've been speaking with Bloomberg reporter Josh Eidelson about a
Speaker 2: federal program that allows employers to pay people with disabilities
Speaker 2: subminimum wages and the questions about its fate in the US.
Speaker 2: Have there been any efforts to reform the program or
Speaker 2: change the program.
Speaker 1: Since the Americans with Disabilities Act was signed in nineteen ninety,
Speaker 1: there have been a series of state and federal developments
Speaker 1: that have put pressure on the program and created a
Speaker 1: reckoning that is not over yet. More than a dozen
Speaker 1: states have passed laws to phase out subminimum wage within
Speaker 1: their borders. Under the Obama administration, the President signed in
Speaker 1: executive order requiring that people working on federal contracts make
Speaker 1: at least ten dollars and ten cents an hour. Congress
Speaker 1: under Obama passed a law that creates additional requirements that
Speaker 1: are meant to be additional guardrails for the fourteen see program,
Speaker 1: And in the last weeks of the Biden administration, the
Speaker 1: Department of Labor issued a proposed regulation that would eventually
Speaker 1: abolish the sub minimum wage program.
Speaker 2: So what will you be watching for next to get
Speaker 2: a sense of what the future of this program looks like?
Speaker 1: One question is what will the Trump administration do specifically
Speaker 1: with this proposed regulation that they inherited from the Biden administration?
Speaker 1: Another is what will happen to the broader set of
Speaker 1: supports that the government provides to help people succeed in
Speaker 1: competitive integrated employment. Another question is what will enforcement look
Speaker 1: like under President Trump. If the federal government is taking
Speaker 1: a more laissez faire, more business friendly approach, to what
Speaker 1: extent will we see states go in the other direction
Speaker 1: on their own?
Speaker 2: Would the future of government reform and open question. Josh
Speaker 2: found that some former fourteen C employers are pushing for
Speaker 2: change on their own.
Speaker 1: Some of the vocal critics now of the fourteen C
Speaker 1: program are employers that used to pay a subminimum wage themselves.
Speaker 1: The experience of some of the employers that have ended
Speaker 1: their sub minimum wage is that it changed their thinking
Speaker 1: and made them come up with more efficient or more
Speaker 1: profitable lines of business, and that it changed the calculation
Speaker 1: for people with disabilities and their parents. In some cases,
Speaker 1: managers concluded that having sub minimum wage programs was creating
Speaker 1: an easy answer for families that were worried about finding
Speaker 1: some safe place for their child to go, and that
Speaker 1: people were being sent there who really could have been
Speaker 1: succeeding in another environment. In this debate over for enc
Speaker 1: there are debates about science, about economics, about law. There's
Speaker 1: also a philosophical tension here. Some of the defenders of
Speaker 1: the fourteen C program see employment as essential to meaning
Speaker 1: and dignity and purpose, regardless of how much someone is
Speaker 1: getting paid. On the other side, some of the critics
Speaker 1: say that there is no justice, there is no dignity
Speaker 1: in saying people can be employees but without the minimum
Speaker 1: amount of pay that for pretty much everyone else an
Speaker 1: employer is required to provide.
Speaker 2: This is the Big Take from Bloomberg News. I'm Sarah Holder.
Speaker 2: This episode was produced by Julia Press. It was edited
Speaker 2: by Aaron Edwards and Jeff Muscus. It was fact checked
Speaker 2: by audrean Atapia and mixed and sound designed by Alex Supia.
Speaker 2: Our senior producer is Naomi Shaven. Our senior editor is
Speaker 2: Elizabeth Tonso. Our deputy executive producer is Julia Weaver. Our
Speaker 2: executive producer is Nicole beamsterborg Sage Bauman is Bloomberg's head
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