Eve Hill and Regina Kline
Co-Leaders, Inclusivity Strategic Consulting
In honor of National Disability Employment Awareness Month, we want to bring attention to the importance of corporate supply chains. What do we mean?
Around the world, companies across a wide range of industries are carefully – and for good reason – ridding their supply chains of contractors who engage in child labor, human trafficking, and unlawful wage practices, and committing affirmatively to fair treatment of workers (Link opens new website) and fair trade (Link opens new website). This is the right thing to do and it’s smart business, as consumers increasingly expect corporations to reflect their social, ethical and environmental values.
But many of these same companies have not questioned whether the vendors in their supply chains exploit or vastly underpay workers with disabilities. This failure to ensure the fair treatment of people with disabilities in their supply chains is a reputational risk for these companies, a red flag for their customers, and a barrier to inclusion and opportunity.
Despite a decades-long movement away from segregating and institutionalizing people with disabilities, an estimated 500,000 disabled workers continue to work in sheltered workshops, where they perform manual labor, typically in exchange for sub-minimum wages.
These workers quite often have the ability and desire to work in mainstream jobs in typical work settings for decent pay. But they have been segregated into sheltered workshops that pay as little as 22 cents per hour. Often embedded in state and local government systems that operate in violation of recent court rulings and federal regulations that prohibit the unjustified segregation of people with disabilities, these workshops are also sometimes known to subject workers to dangerous and exploitative working conditions.
Many of these workshops serve as vendors and independent contractors buried deep within corporate supply chains. Some even market themselves as providing a valuable public service by employing people with disabilities and making products that are “Made in America.”
But new federal laws and policies, combined with consumer demand for greater corporate social responsibility, mean that companies that invest in enterprises that exploit people with disabilities risk harming their reputations and their bottom lines.
For example, in 2013, an Iowa jury awarded $240 million to 32 workers with disabilities who had been abused, neglected and exploited by a company called Hill County Farms, also known as Henry’s Turkey Service, for over 30 years. The men had been forced to work, sleep, and eat together in squalid conditions, and work upwards of 163 hours a week for an average of just 41 cents per hour.
In Rhode Island in 2013, the Department of Justice found that employees with disabilities were recruited by a workshop straight from a school-based sheltered workshop where they kept working in segregation for an average of $1.57 often for decades. In Maine, news reports (Link opens new website) revealed that a sheltered workshop lumber mill paid its employees with disabilities $2 – $3 per hour while its manager made $570,000 a year. And Goodwill International paid workers at little as 22 cents per hour (Link opens new website) while its CEO made $729,000 in salary and deferred compensation.
Despite these disturbing revelations, sheltered workshops continue to be used as suppliers in a wide range of industries, including jewelry manufacturing, cable equipment, auto parts, packaging and assembly of all kinds of products, recycling and waste management, janitorial work, landscaping, laundry, and shredding and document destruction services.
Many companies might not even know they are funding sheltered workshops.
These factories don’t advertise their practices, so it’s up to company leaders to evaluate who their suppliers are, and hold them accountable for legal and fair working conditions and fair wages. This starts with a comprehensive supply chain audit that traces working conditions to their root, and asks tough questions of contractors and subcontractors about wages, hours, accommodations, opportunities for promotion, and advancement. It is complemented by critical changes to Supply Chain Codes of Conduct and Master Service Agreements and other core procurement contracts.
An increasing number of companies are also leading by example, and taking steps to hire workers with disabilities at competitive wages. They’re doing this because the evidence is overwhelming that effective organizations are inclusive organizations. Research by Deloitte Australia (Link opens PDF on new website) showed that inclusive teams outperformed their peers by 80 percent in team-based evaluations.
Almost three decades since the passage of the Americans with Disabilities Act, the country is poised for another sea-change towards inclusion, opportunity, and access for people with disabilities.
Companies that don’t step up to be part of the solution risk getting left behind.