Inside a mostly silent room in Goodwill’s sprawling NW 21st Street headquarters, about 50 people sit at folding tables for the day’s shift. One group fills plastic jars with cinnamon sticks for the Badia spice company. Others have white pieces of paper taped in front of them, each with six or eight squares drawn in black marker. Their job: count out replacement buttons onto the squares. The buttons will then be put into packets for sale on shelves.
Severe mental disabilities were evident for many, and conversation did not come easily as a visiting reporter introduced himself. It is this division that has the majority of Goodwill workers paid well below the minimum wage. In 2011, Goodwill reported wages for this division of as low as 13 cents for someone identified as both blind and having mental retardation and $1.24 for someone with autism.
“The activity here is not about work,” Pastrana said during the tour. “They have no other place to go. It’s about the ability to socialize, the ability to gain skills.”
Pastrana launched the manufacturing arm in the early 1990s with two sewing machines in order to make aprons for Goodwill stores in Florida. It grew after winning contracts for combat uniforms and U.S. flags used in military funerals. He recalled creating a mock assembly line as a make-work program before it had so many business ventures to offer paying jobs for people with disabilities. One line assembled bike brakes, and another line took them apart. The process repeated all day.
“The idea is for them to overcome barriers to employment so that at some point in the future they can become self-supporting individuals,” Pastrana said.
Last year Goodwill reported placing 714 of its workers into jobs with other employers, which Pastrana describes as the ultimate measure of success. But he describes that as an uphill task given the extent of the disabilities.
With healthcare workers, supervisors trained to deal with mental disorders and other support, Goodwill can provide the kind of workplace that accommodates the issues that come with workers dealing with mental and developmental issues. A documentary Goodwill commissioned in 2011, For Once in My Life, shows a Goodwill employee breaking up a brief physical confrontation between two workers, and a counselor talking through the appropriate way to handle anger after another worker hit someone.
Nancy Spagnolo, 59, works four days week on Goodwill’s garment-factory floor. She uses a white marker to highlight the outline of pockets of military fatigues. She brought a tin of canned mandarin oranges for a snack. Her work week ends on Thursday, but Spagnolo comes back every Friday to sing in the 28-member company band.
“I like the work,” she said, “and I like the choir.”
But not all workers endorse the low pay. One Goodwill worker contacted by the Herald said a recent paycheck showed an hourly wage of just under $3.40. The garment worker, who asked not to be identified out of concern of negative consequences at Goodwill, said the non-profit is not rewarding quality work.
“I know I’m not as fast. But I take the time to make sure it is done right,” the worker said. “I should be taking home more.”
The worker said the $9-an-hour laundry jobs sound appealing but may not be possible. “I can’t be on my feet,” the worker said.
While federal set-aside rules say that 75 percent of Goodwill’s front-line workers must be classified as disabled, financial reports show about 45 percent of the non-profit’s overall $44 million payroll goes to people with disabilities. Pastrana’s total compensation package came in at about $570,000 in 2011, according to the organization’s most recent tax return, and his six senior executives together earned just under $1 million that year. Pastrana’s base salary and bonus equaled $353,000 for the year.
Using the 293 hourly manufacturing wages listed in Goodwill’s 2011 disclosure form to the U.S. Labor Department, the numbers show Goodwill would have to spend an additional $742 an hour to pay each worker Florida’s minimum wage that year of $7.31. Assuming a 40-hour work week and a manufacturing floor active 52 weeks a year, the additional cost for 2011 would have been $1.5 million.
The cost would have kept the manufacturing profitable most years — it recorded peak sales of $61 million in 2010 and cleared between $3 million and $8 million between 2009 and 2011. But as the military pulled back orders amid cutbacks and the winding down of two wars, Goodwill saw its manufacturing arm post a loss of about $600,000 in 2012.
The drop pushed the entire operation into three months of losses during the summer of 2012, and left Goodwill in violation of its loan agreements with banks. The banks granted Goodwill waivers on their loan agreements and internal figures show 10 straight months of operating gains through June. But Pastrana also said the crisis illustrated the unique employment model Goodwill presents people with disabilities.
While manufacturing sales dropped 30 percent in 2012, its payroll paid to disabled workers in that division dropped just 2 percent, while non-disabled payroll dropped by 8 percent.
“A regular for-profit business simply would not have hesitated to lay off 800 people; it probably would not have experienced such a large loss as Goodwill had,” Pastrana wrote in an e-mail. “However, Goodwill is a business with a social mission — a social enterprise.”