RE: Reform of the Javits-Wagner-O'Day Act

Year: 
2006
Resolution Number: 
2006-03

RESOLUTION 2006-03
RE: Reform of the Javits-Wagner-O'Day Act

WHEREAS, the program now known as the Javits-Wagner-O'Day (JWOD) program was established during the Depression to create jobs for blind people by allowing nonprofit agencies employing the blind to have priority in sales of products to the federal government as long as 75 percent of the labor hours worked directly on production of products at the agency were performed by blind persons; and

WHEREAS, JWOD was amended in 1971 to add those with other severe disabilities to the pool of workers and to add services in addition to products bought by the federal government as items eligible for priority, essentially the sole amendment in this nearly seventy-year-old law; and

WHEREAS, the priority and placement of contracts are administered by two central nonprofits, National Industries for the Blind (NIB) and NISH (formerly known as National Industries for the Severely Handicapped), mirroring the two separate systems of sheltered workshops employing the disabled, one for the blind and the other for those with other severe disabilities; and

WHEREAS, the two central nonprofits routinely decline to provide information about their programs and the agencies to which they allocate federal contracts on the ground that the central nonprofits are not arms of the federal government but are autonomous, making assessment of the program and accountability for the billions being spent almost impossible to perform; and

WHEREAS, the JWOD program did for a time provide somewhat better employment opportunities to blind and otherwise severely disabled workers, but the law and practices under JWOD have not been fundamentally changed in nearly seventy years and have become outdated, not reflecting the growing complexity of federal procurement or vastly changed national policies on disability programming, which makes JWOD essentially a program from another era that urgently needs overhaul and oversight to eliminate abuses of the system; and

WHEREAS, some of these abuses include:
1. to meet the 75 percent-hours-of-direct labor requirement, jobs may be split into three or four smaller jobs, generating more hours spent by blind or disabled workers, whose productivity is thus artificially capped;
2. the resulting jobs are often paid as piece rate with the rates set so high that minimum wage can rarely be achieved;
3. blind and disabled workers are kept on the shop floor and rarely advanced into management because they are more valuable in direct-labor jobs to qualify for the priority than they are as managers;
4. the resulting jobs come and go, making employment of blind and disabled workers intermittent and present only to qualify for the federal priority; and
5. the definition of people with other severe disabilities has been interpreted to be ridiculously elastic to qualify for the priority; and

WHEREAS, these practices have long been hidden behind a blizzard of paperwork through which it is almost impossible to learn the fundamental facts while program proponents routinely proclaim that they and their programs are dedicated to helping the disabled, all of which practices mean good jobs for some, but not for the blind and disabled workers; and

WHEREAS, the United States Senate's Committee on Health, Education, Labor and Pensions (HELP Committee) has recently uncovered a whole second set of program abuses the Committee describes as "numerous examples of excessive executive compensation, lavish perquisites, conflicts of interest, and self-dealing" while media reports have fleshed out these findings as shockingly high salaries, manipulation of corporate shells for the personal benefit of able-bodied managers, and other financial shenanigans with the money intended to benefit disabled workers; and

WHEREAS, JWOD is now a program seriously out of control, blending antiquated language with no accountability, resulting in a situation in which $2 billion in sales to the federal government yields annual average wages to the blind and disabled employees of $8,000, a scandal recently exposed by the Senate HELP Committee, which demonstrates that the current JWOD program is both financially and morally bankrupt, allowing some of its managers to grab millions of dollars while they pretend to care about the disabled and receive the plaudits of their communities for being so big-hearted; and

WHEREAS, it is time to end these abuses of worker opportunities and abuse of the American people's trust by amending JWOD in the following ways:
1. remove the requirement that entities eligible for the priority in sales to the federal government be nonprofits, allowing both nonprofit and for-profit companies to establish eligibility;
2. require that all entities seeking the priority agree specifically to the jurisdiction of the National Labor Relations Act and the Fair Labor Standards Act, both of which have been disputed in the past;
3. replace the 75 percent-direct-labor requirement with a requirement that the entity qualify for priority sales only if at least 51 percent of all compensation and benefits throughout the entire entity is paid to blind or disabled workers, if at least 51 percent of all full-and part-time jobs are held by blind or disabled workers, and if blind and disabled workers receive actual preference for promotion within the entity as a stated and implemented policy;
4. provide that the entire entity must meet the 51-percent rules, including all divisions, wholly-owned subsidiaries, and any other corporate shell created to avoid application of the 51-percent rules;
5. prohibit buying products and services from nonqualified companies and then selling exactly those same products or services which have not been made or packaged by blind or disabled workers to the federal government along with prohibiting qualifying entities from dealing with other companies owned by officers, directors, top managers, or families of these individuals;
6. eliminate the temptation to be creative with the definition of "blindness" or "other disability," by defining as blind or disabled solely those individuals who are currently receiving or are currently eligible (except for resource tests) to receive Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) as a blind or otherwise disabled individual, placing the determination of disability outside JWOD and within a system that routinely makes such determinations for other unrelated and compelling interests, the Social Security Administration;
7. eliminate the central nonprofits (NIB and NISH) from JWOD and replace them with administration of the JWOD program by the Employment and Training Administration or another appropriate unit within the United States Department of Labor, achieving coordination with other employment programs and also vital public accountability;
8. reconstitute the Committee for Purchase from People Who Are Blind or Severely Disabled, a small federal agency with current JWOD oversight and administrative responsibilities, as a program oversight and policy committee having a majority of public members, a majority of whom are blind or otherwise severely disabled; and

WHEREAS, these sweeping proposals are needed to end the abuses of JWOD that have arisen within the program, including those abuses recently brought to light by the HELP Committee, and also to synchronize the original intent of JWOD with its daily effect on the lives of blind and disabled people: NOW, THEREFORE,

BE IT RESOLVED by the National Federation of the Blind of Arizona in Convention assembled this sixteenth day of September, 2006, in the City of Tucson, Arizona, that this organization energetically seek congressional amendment of the Javits-Wagner-O'Day Act to restore the original intent and mission of the Act and to make real the original promise of good work, good-paying work, respectable work for blind and disabled Americans by ending abuses that have arisen in this seventy-year-old program, which can once again be progressive.

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