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Bark’s Bytes #18 | Client Wages

Written by John Wayne Barker on . Posted in Barks Bytes.

Over the past year, Merrick, Inc., has focused our messaging to show why clients and our community are better for our services having been delivered. One of the key messages is that between 2004 and 2011 annual client wages increased from $331,775 to $542,970; an increase of 64%. This would be impressive anytime but even more so given the last three years of economic recession. Yet all statistics can be skewed to tell a more effective story… so, what is the data behind our numbers?

In 2004, we reported wages for 230 clients to the IRS and 289 clients in 2011 for a net increase of 26% client workers. Whereas, the average annual wage in 2004 was $1,442, it was $1,879 in 2011 – an increase of 30% (the average is $2,260 if you only count the 80% most productive clients an increase of 57%). In addition, according to a Ramsey County report, in 2011 we had 42 clients hired directly by a business averaging 17.8 hours a week at $7.71 an hour. You might think that a 30% increase sounds good and $7,136 in annual wages for clients hired directly by employers is nice – but isn’t $1,879 a year in average wages for 289 clients working on crews or in our facility rather low? If you consider that we only serve clients six hours a day and about one hour of that time is for transportation, one hour for breaks or other program elements, and perhaps a half-hour due to downtime, the average client is working approximately 3.5 hours a day or 787 hours a year.

Wait – how can Merrickpay clients $2.40 an hour ($1,879/787 hours) when the minimum wage is $7.25? We have what is called a commensurate wage certificate that is monitored and enforced by the Fair Labor Standards Act permitting us to pay a special minimum wage. The process to obtain a commensurate wage certificate is rigorous, reported on annually, subject to renewal procedures, and enforced by the U.S. Department of Labor. Calculating a special minimum wage requires us to establish the local market wage ($8.70 in 2011), and the output of a worker who is non-disabled to determine the “unit rate” for the work to be completed. We must then track the number of units each client produces and multiple this by the rate to determine each person’s earnings. For example, if a non-disabled worker can assemble 87 widgets an hour, then the unit rate is 0.10 cents a widget ($8.70/87 = 0.10) and that is what clients get paid for every widget they assemble. Everyday we have clients that are paid more than $7.25 an hour because they produce units at a rate exceeding the standard and we support one client that is working full-time and making more than $10.00 an hour with benefits. For more information on the benefits of the commensurate wage certificate, please read my editorial entitled “Commensurate Wage Is Not a Turkey”.

Okay – I understand this concept but how can clients live on $2.40 an hour? They can’t and you have to also consider the value of other support they receive. For example, the Jobs Now Coalition estimates that in 2009 a single adult in Ramsey Countyhad to earn $20,832 annually to pay for food, housing, healthcare, transportation, and other necessities. For most of our clients theses expenses are paid for by government funding along with as much as $8,376 annually in Supplemental Security Income (SSI) benefits of which I will only consider 25% or $2,100 annually, for personal expenses. When you add these three items together, clients are receiving the equivalent of $11.93 (20,832 + 1,879 + 2,100/2,080) an hour or $24,810 annually. Now some may say that if clients were paid more they could pay for more of their living expenses and reduce government spending. That sounds nice, and the state does have a program called MA-EPD which essentially does this when appropriate; however, in most cases these 289 clients have significant disabilities that limit their activities of daily living (ADLS) and independent activities of daily living (IADLs) that qualified them for services in the first place.

In closing, client wages have increased more over the past eight years than at any other time in our history which is indeed an accomplishment during these difficult economic times. This appears to be validated by 90% of the 243 respondents to the 2011 client satisfaction survey agreeing, “They were generally satisfied with the amount of money Merrickhelps me earn”. While others state that “they [sic clients] can do something – I am not sure what it is” we listen to client preferences and do our best to find their desired work. While others only focus on clients with the most capabilities and suggest that others be given the option of “staying at home”, we celebrate with clients that make less because of the effort involved and the pride in their paycheck. If the people we serve are doing work they enjoy, mostly on their own, in a setting of their choice, for the hours desired, at satisfactory wages – then we are living up to our mission to provide meaningful work that will guide them towards realizing their goals and dreams. To promote this message we have added two new tools to our communication toolbox:

I urge you to take a few minutes to educate yourself on this issue through our new tools and join with us in showing others why our communities are better off for having DT&H programs around.