Management & Labor

Hidden or Unemployed: America's Failure to Get Disabled People Jobs

A generation after the Americans with Disabilities Act, states are facing federal demands to rethink their approach to helping disabled people find work. But could the policy shift worsen their prospects?
by | June 2015
Amanda Andreavich and many of the other people at the Elwyn center in Wilmington, Del., work both in integrated jobs and at sheltered workshops.
Amanda Andreavich and many of the other people at the Elwyn center in Wilmington, Del., work both in integrated jobs and at sheltered workshops. (Photos by David Kidd)

When Rita Landgraf ran Delaware’s main disability rights organization in the mid-1980s, there was an effort to get clients into the workplace, but that rarely meant an ordinary workplace. It typically was an out-of-the-way facility where they’d be grouped together performing menial tasks -- putting arms into the plastic torsos of toy soldiers, placing bows on boxes or performing other repetitive work, all at a pay well below the minimum wage. It was an improvement on the sterile residential facilities to which these people had once been confined. But in Landgraf’s view, it was nowhere near enough. She believed that, with some help, even those with severe disabilities could work right alongside the rest of the labor force. She wasn’t the first in the country to focus on placing clients in integrated workplaces instead of what are commonly known as “sheltered workshops,” but she was out in front of the landmark Americans with Disabilities Act of 1990 (ADA), which banned discrimination and promised better access to public and private places.

This year, as the Disabilities Act marks its 25th anniversary, proponents such as Landgraf point to all it has accomplished in the way of access, opportunity and inclusion. But in one respect, the law has mostly failed: It has not led to more jobs. The employment rate for the disabled remains basically unchanged after a quarter-century, and many of the 34 percent of Americans with disabilities who do have jobs are in sheltered workshops earning around $2 an hour.

That’s about to change. The federal agencies that oversee Medicaid and labor laws are demanding that states do more to offer employment opportunities to people with disabilities. The Justice Department is also threatening to sue states to open up the work system. These moves amount to a dramatic shift in disability policy and could spell the end for sheltered workshops that don’t adapt. “From my lens, not much has changed since the ADA with employment,” says Landgraf, now Delaware’s secretary of health and social services. On the other hand, she says, “not only are those federal programs starting to align themselves across the board, but stateside there’s so much interest. I’m starting to feel that for the first time.”

The push for integrated employment isn’t without critics. Some parents of the disabled and the nonprofits that run sheltered workshops and other services fear the shift will neglect people who depend on the workshops as a social outlet and for employment as they try to find suitable outside jobs. But advocates of change, including some parents, insist that integrated employment is essential for people with disabilities to realize their full potential and that the benefits range from reduced reliance on social welfare to increased workplace diversity. Regardless of the controversy, change is coming. And states will be at the center of this next phase in a civil rights movement that has at its end a vision of greater community inclusion. As the situation stands now, they still have a long way to go.

A defining moment for the integrated workforce movement goes back to a U.S. Supreme Court decision in 1999. In Olmstead v. L.C., the high court ruled in favor of two Georgia women who wanted to be released from institutional care to a community setting after clinical assessments found that to be the best fit for them. The court held that people with disabilities must be provided services in the most integrated setting possible if that’s what they want. There was some question whether the decision applied to employment services as well as residential facilities, but federal programs and initiatives that followed Olmstead stressed integrated employment as the preferred national policy, though they didn’t do much to enforce it.

A 2012 Oregon case called Lane v. Kitzhaber helped erase doubt that the federal government would strictly enforce Olmstead in employment. And during the past year, the federal government has signaled that states must do more in exchange for federal funding. In April 2014, the Department of Justice announced a settlement with Rhode Island that forced the state to help find work for 3,250 people with disabilities. The department had found that nearly half of the people in Rhode Island’s sheltered workshops -- funded largely through Medicaid as “prevocational training” -- had been there for at least a decade, earning an average of $2.21 an hour.

Rita Landgraf, Delaware secretary of health and social services, with a young integrated Walgreens employee.

Working for years, even decades, in a setting that was meant to be transitional is fairly common in most states. But now the Centers for Medicare and Medicaid Services (CMS), which funds long-term support for people with disabilities, is telling states that transitional programs can’t last forever. CMS is giving states five years to move away from shelter-based systems, and warning them that facilities filled almost entirely with disabled people or designed specifically for them shouldn’t get funding. This means states will have to reserve Medicaid payments for service providers who are focused on what’s called “supported employment,” which includes help finding a job and maintaining it through coaching and other assistance. States will also have to defund facility-based “day habilitation” services, which are essentially recreational activities for groups of disabled people. That could signal a greater shift toward activities within public spaces like libraries and museums, tailored to individual interests for people with disabilities who aren’t working.

Another big policy change last year was the enactment of the federal Workforce Innovation and Opportunity Act. It requires state workforce agencies to spend 15 percent of their federal funding to help young people with disabilities transition into the workforce with job placement services and on-the-job experiences such as internships. The new law also makes it harder for vocational rehabilitation agencies, which serve people with disabilities on a shorter-term basis than Medicaid, to place any clients under the age of 24 in a sheltered workshop without first exposing them to integrated jobs. Delaware, for one, is opening up Medicaid funding to support work experiences for youth as young as 14. “The intent of Congress is to say, if we want to raise the outcomes and the number of people with disabilities who get employed, we need to start making sure that students with disabilities are better able to enter the workforce,” says Andrea Guest, Delaware’s director of vocational rehabilitation.

That will mean forging deeper partnerships among state agencies, public schools and private businesses.

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A number of governors, both Democrats and Republicans, are pushing especially hard to spur action in the private sector. Among them is Delaware’s Jack Markell, who focused his 2012 chairmanship of the National Governors Association on the issue of jobs for disabled persons. Between 2011 and 2013, employment in Delaware among people with disabilities increased 8.6 percent.

The state has held meetings of business leaders and disability advocates that have led to high-profile commitments from technology firms and the health-care industry. Among private employers, Walgreens has earned high marks from advocates for promoting jobs for people with disabilities in distribution centers and stores. “The only way this is going to be sustainable is if businesses take the lead,” Markell says. “But a better approach is having vocational rehabilitation agencies approach them and say, ‘I want to understand your needs, and I’ll bring you a bunch of candidates, some of whom have disabilities and some who don’t.’”

Delaware may be attracting the most attention at the moment, but other states have been working toward the same goal for years. Minnesota, for example, was among several states that received grant money in 1999 to establish statewide call centers to help maintain independence for people with disabilities. Today, Minnesota has one of the highest disability employment rates in the country at 46 percent, and one of the lowest gaps in employment between disabled people and the general population at 36 percent. The national gap is 40 percent.

But as in other states, Minnesota’s overall employment numbers mask a reliance on segregated, facility-based services. About 72 percent of those served by the state’s disability agencies -- some 12,000 people -- are employed in sheltered workshops. In nearby Iowa, where disability employment stands at about 45 percent, nearly 80 percent of those served by state disability agencies spend their time in sheltered workshops or segregated day centers.

But Iowa is actively moving toward a more integrated workforce model. Using federal grants, the state has started a program helping disability service providers learn how to better analyze the needs of local businesses, maximize state and federal funding, and train staff. It launched with six providers in 2013, then expanded by another 14 last year and another 16 this year. The state says providers placed 427 clients in integrated employment last year. That’s a step toward Iowa’s goal, but it only represents a sliver of a system that serves about 13,000 Iowans altogether.

For now, the Iowa system remains heavily tilted toward institutional facilities, says Emmanuel Smith, an investigator with Disability Rights Iowa. “Attitudes have been changing in the past two years, and I don’t want to minimize their importance in this whole process,” he says, “but overall funding for employment services is one of the ways we can transform things quickly.” According to Smith’s group, 88 percent of the state’s spending on day and work services still goes to mostly segregated places.

Segregated workshops may sound like an insensitive or antiquated approach. But many advocates for the disabled still view that model as a key part of helping their clients find meaningful work. Elwyn, a national provider that operates a work center based in Wilmington, Del., is typical of sheltered workshops in most of the country. Many of the approximately 145 disabled people that it serves work both in integrated jobs and in Elwyn’s sheltered workshop -- say, one or two days at a hospital or a retail job, then a couple of days at the workshop socializing with friends and sorting discarded X-rays for recycling or manufacturing military medals. Kendra Johnson, Elwyn’s director, has an individual plan for every client and views the workshop as a bridge for many of them. “We support you where you are, to get you where you want to be,” she says. “A work center isn’t for everyone, day habilitation isn’t for everyone, integrated employment isn’t for everyone. I’m concerned about the people who will fall between the cracks.”

Even some parents of people with disabilities think integration isn’t a good idea for everyone. Craig Harwood lives in Cedar Rapids, Iowa, with his wife and son Dan, a 34-year-old with Down syndrome and a seizure disorder. Dan works in a sheltered environment for 25 to 30 hours a week doing the kind of rote manufacturing jobs typical of workshops. His father says he’d love for Dan to work in an integrated environment but “it’s just not in the cards.” Although Dan is mostly nonverbal, he has friends at his facility and a job he likes. The facility, called Options, has already decided to close down rather than try to adapt to the new federal rules, and Craig fears Dan will be relegated to a day center “doing a puzzle or watching TV,” or else be stuck at home because he can’t find work hours comparable to the ones he had before. “The pendulum is swinging too far,” Craig Harwood says. “Don’t get me wrong -- offering integrated settings to people is critical. But we’re throwing away facility choices in doing so, and I think that’s going to be bad for my son.”

People like Harwood and Johnson worry that the shift to integrated workplaces will ultimately result in less productive lives for many disabled individuals. That’s likely a valid concern, given the experiences of early adopter states. Vermont, for example, closed most of its sheltered workshops in the 1980s and 1990s, and shuttered its last facility in 2002. Since then, integrated employment has shot up 50 percent, placing Vermont among the nation's leaders in that area. But the numbers don’t tell the whole story: By the most recent count, disabled employees in integrated workplaces in Vermont work an average of only nine hours a week. When they’re not working, they’re spending time doing recreational activities in the community or occasionally together in supervised spaces. But the low working hours alarm critics.

The District of Columbia, which stopped funding sheltered workshops more than a decade ago, has struggled to place disabled residents in integrated jobs. The percentage of people in integrated employment has actually fallen since 2009, placing D.C. near the bottom nationally, and the number in segregated day programs has climbed in recent years. District officials blame systematic weaknesses in public education and poor coordination among those responsible for transition employment for people with disabilities -- issues that will now become even more prevalent thanks to the federal policy changes.

Kendra Johnson, director of the Elwyn center: “I’m concerned about the people who will fall between the cracks.”

Some places are much further along in the shift to integration, and their achievements have come without formally closing sheltered workshops. But they demonstrate that lasting change takes time -- sometimes decades -- and strong parent advocacy in particular. Washington state was the first, in the 1970s, to set strong protections for people with disabilities to be educated in public schools. In the 1980s, the state set standards for disability agencies, with the pursuit of individual employment as the primary objective. “The whole discussion changed, and it was no longer, ‘What do we do with these people’ but ‘How do we get them jobs?’” says Margaret-Lee Thompson, a parent advocate who was active in the state in the 1980s and remains a prominent national voice.

Today Washington’s trove of publicly and easily accessible disability data has no equal in the country. The new federal labor rules making it harder to place youth directly into sheltered workshops in some ways mirror an existing Washington policy that’s about a decade old. By the most recent count, 86 percent of the people served by Washington disability agencies work in integrated settings, ranking the state first in the country.

Wisconsin’s Dane County, home to the University of Wisconsin and the city of Madison, has a similar story and today has one of the highest overall disability employment rates in the country. There were disability champions at the university who expanded their influence to the local school system, and parental champions who took it from there. The county struck a deal with its schools about 25 years ago, promising to continue providing employment supports for recent graduates who had been getting their services from the education system, without placing them on a waiting list. Every year, 85 to 90 percent of the disabled people who leave Dane County schools move into a job, and 82 percent of those in Medicaid-funded employment services are in integrated settings.

“It’s become the culture,” says Doug Hunt, a developmental disabilities official. “It’s the expectation that parents have, that schools have. It took time to build that momentum, but that culture of creating higher expectations of employment for people with disabilities, the cumulative impact of that is what we’re seeing now.”

Neither Washington state nor Dane County is perfect. Both are struggling to increase the number of working hours for disabled people, a problem with no easy solutions. It will require attitude adjustments among employers, and greater spending on employment supports so people can keep their jobs and work more hours. It means working harder to place people in jobs that are the best fit for them. (Numerous studies suggest that actually will save governments money in the long run, since they’ll spend less on job coaches and work support for their clients.)

Still, agencies feel enormous pressure to get it right. “The fear is if the tools aren’t there, people will be sent home, sitting on a couch with their parents, and having no opportunities,” says Landgraf, the Delaware secretary. “How do we take our existing system and possibly redefine it and redesign it?”

The states have a lot of work to do to answer that question.

State Employment Data for Disabled, Nondisabled

Nondisabled workers are employed at greater rates, but the disparity varies from state to state. The following table shows the share of the age 18-to-64 civilian noninstitutionalized population who are employed:

SOURCE: Governing calculations of 2013 American Community Survey 1-Year Estimates
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