Sheltered Workshops: A Viable Alternative for Post-High School Employment?

1. Sheltered Workshops: A Viable Alternative for Post-High School Employment? The history, the research, the future

2. Historical Perspective • Sheltered Workshops in the U. S. can be traced to the Perkins Institution for the Blind in 1840. • The critical component in the early years was the meaning attached to the word “sheltered.” The workshop was not created to provide normalization, but to shelter the individual from frustrations, problems, and risks associated with competitive employment. (Rosen, Bussone, Dakunchak, & Cramp, 1993)

3. Historical Perspective • Acrimonious disagreements exist concerning the proper role and function of sheltered workshops within our systems. • “Do they distinguish among or do they merely confuse and commingle the separate functions of (1) a vocational evaluation, adjustment, and training center; (2) a therapeutic facility; and (3) a place of remunerative employment?” Jacobus tenBroek

4. Historical Perspective • Today, approximately 1.6 million individuals receive services in over 5500 sheltered workshops and 2000 work activity centers. • Approximately 250,000 students graduate from special education programs annually, and many of those end up in workshops (or on waiting lists).

5. Criticisms from the research • Low Pay: • A 1998 report indicated that, overall, sheltered workshop clients earn an average of $65 per week, while rehabilitation clients who are competitively employed earn an average of $272. • Clients who have severe disabilities earn an average of $37 per week in a workshop setting compared to $110 in competitive employment. (Taylor, 2002)

6. Criticisms from the research • Dead-end placement: • Studies have consistently shown that sheltered environments do not prepare people to live, work, or participate in integrated environments. • Only 3.5% of sheltered workshop clients ever move into competitive employment. (Lutfiyya, Rogan, Shoultz, 1988)

7. Criticisms from the research • Disincentives to Placement: • Sheltered workshops must produce an acceptable amount of output, which is of acceptable quality, if they are to survive and continue to receive contracts. • This results in a built-in incentive to retain the most productive clients,“…those most likely to succeed in the competitive labor market with the fewest supports.” (Taylor, 2002)

8. Criticisms from the research • Failure to serve those most in need • Ironically, according to Taylor, sheltered workshops seldom serve the most severely disabled individuals because they are deemed unproductive and not able to work.

9. Criticisms from the research • Decline of mass production/blue collar industry in U.S. • Result: Continuing decline in subcontract opportunities that provide connection to real work possibilities in the workforce. (Rosen, Bussone, Dakunchak, & Cramp, 1993)

10. Criticisms from the research • Economic burden on society • Taxes paid by clients are minimal. • With few exceptions, sheltered workshops do not pay for unemployment compensation, worker compensation, or Social Security (National Federation for the Blind) • Cost of placement in sheltered workshop: Average of $7,400 annually. (American Association of Mental Retardation [AAMR])

11. The End of Subminimum Wage? • “Even so, some xxxxxxx employees earn pennies on the hour while the company spends millions of dollars per year on executive compensation. Those who utilize the subminimum wage generally enjoy nonprofit, tax-free status, and have guaranteed access to government contracts. This model may have provided opportunities to disabled workers in 1938. But in 2014, it is simply not the most appropriate strategy for creating real training and employment scenarios.” Editorial, thehill.com

12. Future Directions • Supported Employment: • Over 105,000 individuals with multiple and profound disabilities participating in SE earn “nearly $600 million” annually and pay over $100 million in federal, state, and local taxes (AAMR, 2000) • Individuals participating in SE increased their annual earnings by 490%, with average hourly wages increasing from $.84 to $4.13 • For 52% of SE participants, the primary income is their paycheck instead of public assistance or disability benefits (AAMR).

13. Future Directions • Supported Employment • “Supported employment is a way to move people from dependence on a service delivery system to independent competitive employment” (Department of Labor, 2004). • Cost-benefit analysis: Average cost of a placement is estimated at $4,000, with half of all placements costing less than $3,000. • The average annual cost of maintaining an individual in competitive employment with supports is estimated at $4,200, compared to the $7,400 annual cost of placement in a day program

14. Future Directions • Supported Employment—The down side: • In a seven-year study, SE participants’ earnings were documented as being 250% greater than the sheltered workshop clients • These earnings, while twice that of sheltered workshop participants, was still quite low. • The study also noted a decline in the rate of employment for supported employees over the seven year period.

15. Future Directions • Supported Employment—The down side: • A disproportionate inclusion of females with mild cognitive disabilities in sheltered employment continues • Disincentives to increased earnings that exist in the SSI and SSDI programs are cited as reasons for the apparently intentional restriction in earnings (Kregel & Dean (2003). • States have not historically funded the cost of on-going supports.

16. Future Directions • Other options: • Entrepreneurship/business ownership (self-employment) • “Semi-integrated employment” (work crews) • Workshop “Co-ops” • Development of agency owned/sponsored business ventures

17. Conclusion • This is not a case of “if it’s not broke, don’t fix it.” The current system doesn’t work for a majority of those individuals who are leaving special education programs in our public schools each year.