CEO blames state’s minimum wage increase
SPRINGFIELD, Ill. (WCIA) — An iconic nonprofit thrift store is crying poor in the face of looming payroll increases, and it is announcing plans to layoff disabled employees in order to take on the extra cost.
However, the 501(c)(3) organization pays no taxes, collects state funding, was awarded state contracts, and has special permission from the federal government to pay disabled workers well below the minimum wage floor.
Sharon Durbin, President and Chief Executive Officer at Land of Lincoln Goodwill, told dozens of disabled thrift store workers they would no longer receive a paycheck as a result of the state’s new minimum wage increase, and she warns future job cuts could still be coming to the last 11 remaining disabled employees still on the payroll.
Durbin runs the Central Illinois nonprofit branch that oversees 15 retail locations and more than 450 total employees. She wrote about “upcoming changes to the Vocational Rehabilitation Program” in a letter dated June 14th. Her letter said the program “is funded through the Illinois Department of Human Services,” but the funding “does not cover all of the significant costs of the program.”
The abrupt shift not only comes as disappointing news to dozens of disabled workers in the area, including some who live in group homes without their parents, but it also threatens to weaken the core promise of Goodwill’s mission statement.
Inside one of Springfield’s retail locations, a massive wall painting says, “DONATE STUFF. CREATE JOBS.” The loud speaker broadcasts a message that reminds shoppers, “At Goodwill, every item you buy, and every item you donate funds job training and so much more.” Literature hanging in the lobby announces that “we train and support over 1,000 people with developmental disabilities.”
The state legislature awarded a 3.5% funding increase in the current state budget to help fund the job trainers and skills coaches who work with the disabled employees.
In previous years, lawmakers required the entire increase in state funding to go toward staff raises. This year, the non-profit vendors were allowed discretion to use the increase however they see fit. But the thrift shop organization said it had not yet awarded pay raises to staff, and that the extra funding was not enough to offset a higher payroll burden due to the pending minimum wage increase.
“As of January 1, 2020, a new minimum wage law takes effect which will increase our payroll cost significantly,” Durbin’s letter reads. “Over the next five years, the added expense will exceed two million dollars if we do not make changes.”
“That means that many of our clients will no longer be working to receive a paycheck, but will be involved in some type of learning based initiative,” she wrote.
Loni Braun, whose 28-year-old autistic son Nick worked for Goodwill location on Wabash Street, called the non-profit’s decision “an atrocity.”
“My son has worked for Goodwill for six years,” she said. “He started at $8.25. He left at $8.25. So he has never had a raise. The minimum wage is going to go up I believe a quarter, but not until January. So they are not raising it to the $15 until the year 2025.”
Durbin’s son, Brian Durbin, was hired onto the Executive Leadership team and makes an annual salary of $95,747 at the nonprofit.
Braun says she pleaded with the thrift store to keep her son on the payroll, and wondered, “Why can’t they just say, ‘OK, can you guys just keep agreeing to work for $8 and a quarter?’”
Goodwill is certified with the U.S. Department of Labor with sub-minimum wage approval. Because they hire disabled workers, they have special permission to pay them below the minimum wage.
Durbin acknowledged that her group already pays the sub-minimum rate for 27 of 50 disabled workers, however, inexplicably, she says the nonprofit is “progressing away from that.” The federal formula requires employers to pay disabled workers based on a productivity scale at a rate commensurate with the work they complete.
“I miss doing it,” Nick said Monday. “I wish they would not have done this to me. I’ve been here for six years and never got a pay raise. We were all crying when some people left and you know, it’s really, really… I want my job back. It’s heartbreaking.”
“We are being viewed as this awful organization that is removing jobs from people with disabilities and that’s not true,” Durbin responded, claiming she holds a soft spot in her heart for disabled people like her brother.
She explained that disabled workers are not always as efficient or as productive as a traditional employee, and the extra time and labor it takes to train and correct the mistakes of the disabled workers costs more money.
“It really was not a job,” she said. “It was a work component and through it we gave them through grace out of our budget to pay them so they had a paycheck to go home with.”
Braun, who describes his experience at Goodwill as his dream job, disputed Durbin’s characterization of his abilities. He says his managers told him he was “very high functioning” and “said they wished they had ten more of me.”
“I am very proud of my work,” he said. “I would help when I was on the sales floor. I would help customers find what they were looking for. I would help them find where the active wear was, and this and that.”
As a part of the Vocational Rehabilitation Program, Goodwill sent a bus 12 miles south of the retail location in Springfield to pick Durbin up at his home in Glenarm. Because he can’t drive, he fears no other employers will accommodate his challenging transit needs.
“I thought they cared, but I guess they don’t,” he said.
Keeping disabled workers on the payroll also helps Goodwill qualify for state janitorial contracts. In 2018, the state awarded the nonprofit $384,953 in grants and contracts specifically set aside for a “person with severe disabilities.”
“They say it is to help our mission,” Braun’s mother said. “But what is the mission now? That is what we are trying to find out. They have gotten rid of most of the people with disabilities. What are they doing with all those donations?”
The organization’s 990 tax documents from 2018 reveal Durbin takes home an annual salary of $164,849 plus another $6,145 in benefits.
She warned the higher wage floor would set off a “domino effect” of jobless claims around the state.”
“It is going to impact us all,” she said. “Gas prices are going to rise, grocery prices are going to rise. Jobs are going to be lost. Look at your Wal-Mart, your Meijers, your Schnucks. They are doing away with real people checking you out and they are doing more to go in the line of automation. Why is that? Because they don’t want — or can’t afford in their business model — to start paying everyone who walks in the door $15 an hour. They can’t. So what are they going to do? They start eliminating jobs, because that is the first line of defense.”
Durbin called on Pritzker to use his executive authority to halt the roll out of the minimum wage floor.
“The governor can make anything happen,” she said. “If he’s a governor –which I hope he is — that truly is listening to the people that he serves, because he is a servant, then he will stop and say, ‘Wait a minute, I did not realize I was doing this to people with disabilities, and I didn’t realize it was going to cripple our businesses out there.’”
It’s unclear how the governor could enact such a change without prior approval from the General Assembly, which is not scheduled to return to Springfield for fall session until November.
“Governor Pritzker worked to balance the interests of workers and the business community when creating the gradual six year ramp to $15 an hour,” spokeswoman Jordan Abudayyeh said. “The governor hopes Goodwill will work with the federal government and DHS to continue offering jobs to those with disabilities.”
(This story was originally published on July 16, 2019)