A Big Success, Small Step

Back in February I was on a wild goose chase searching for where our clients would work when I stumbled upon the state contract the city of Charleston abides by. The state contract mandates that all blue collar temporary workers should be paid $9.10 an hour. I shared this information with Pete, who didn’t believe me when I expressed in a frenzied flurry that I was certain blue collar temp workers working for the city—who are homeless and near-homeless—get paid the same as all other blue collar temp workers, $7.25.

Later that afternoon we talked with several of the guys from the Star Gospel Mission, who had worked for the city before, through Trojan Labor, a local labor agency. All of them confirmed our suspicions, that blue collar temp workers were being paid $7.25 even though the state contract mandates that these workers be paid $9.10. Within a week or two we had taken pictures of one of our friends who was working for the city and even had his pay stubs dating back to February 25th, each showing $7.25 an hour.

In the meantime we had also contracted the state procurement officer in Columbia, who said the state had the right to investigate if they suspected any fraud, and another state procurement officer who said we should solve things at the city level. We had begun that process too. We had started with a very kind lady at human resources, Susan, who had been calling and checking on the pay rates, and even eventually spoke with Mayor Riley.

On March 9th, when we were sure that Trojan Labor was in fact violating the state contract, we approached them with the document. They said they would look into it. When we approached Trojan Labor again on the March 31st, they said they were checking with corporate.

Then today, April 8th, one of our friends who works for the city through Trojan Labor (and also volunteers at and attends Seacoast Church with me) called us to say thank you, that his wage had been raised.

He said thank you, that this would make a difference in his life.

He said one of the other 12 coworkers who work for the city through Trojan Labor came up to tell him thank you as well, that he would be getting paid $9.10 an hour now.

So for IES, this is a huge success. We’re excited to see our friend and these other laborers make a higher wage.

But it’s a small step:

It’s a demonstration of some of the larger issues with for profit day labor. Both Susan and Damon claimed that they never would have known—in Susan’s case—that the state contract was being violated, and—in Damon’s case—that there was a state contract at all. There is no accountability. No transparency. There will also be no repay. By my calculations $11,544 since January should be in the pockets of the homeless and the near-homeless instead of a for profit labor agency. The problem of for profit day labor, when it comes to dealing with the homeless and near-homeless, is the problem of an entire system and not just one violation of a state contract.

For the homeless and near-homeless day laborer, this is a huge success too. It means hope. It means courage. On April 2nd, our friend who works through Trojan Labor for the city went and spoke with the manager of Trojan Labor, telling him that he knew about the state contract. He told him there was an organization that could prove he wasn’t being paid the right amount, and audaciously claimed that a state representative was planning to shake the tree.

But it too is a small step:

At a presentation at Charleston Southern University today, near the end I told them that In Every Story is about the conflict that is in every story, and then I began to cry. I tried to tell them that in every story there are examples of God’s love, hope, and redemption, but I couldn’t. Instead I cried. Pete had to finish. Because I realized that fairly paid temporary labor is still a small step for the homeless and near-homeless in the grandest scheme of things.

Thanks for your support.

And thank you God, for moving in a bigger way than we could have on our own.

IES on the front page of Charleston Mercury

Fellow tour guide and friend Paul Meeks writes a financial column for the Charleston Mercury, a paper with a distribution of 50,000. He just penned a great article about IES that appeared on the front page of the Mercury. The text of the article is below. Paul's also provided the venue and food and drinks for an IES fund raiser on April 29. It's at the Old South Barber Spa on 10 State Street in Charleston at 6PM. More info to follow.



The Best Investment That You’ll Ever Make!
By Paul Meeks
Special Financial Correspondent

In this column, I discuss ways to save or make money most often by investing in the publicly-traded shares of companies. In this essay, however, I propose joining an endeavor that’s much more admirable and enlightened than accumulating material wealth. I’ll make the case as to how the following local organization is revolutionizing a niche in community service and why it deserves your support particularly in these dire economic times.

First, let’s set the stage. According to the National Coalition for the Homeless, 3.5 million Americans meet their sad criteria. Our local Crisis Ministries estimate that 3,000 folks are homeless on any given night in the tri-counties. That figure increased 19 percent in 2008; and that year was only the beginning of the global financial meltdown. Obviously, the numbers of local destitute have significantly increased since then with few, if any, signs of relief.

I know, you picture a dirty, homeless man wandering the streets talking to himself. He’s a burden to society. There’s no way that he could ever become a productive, self-sufficient person. Of course, there’s no way that this fellow could be a dependable, constructive worker; but that’s not true. According to the U.S. Conference of Mayors, 13 percent of American homeless single (and 17 percent in families) adults are employed. They mostly serve the day labor market. Unfortunately, they’re often abused by the for-profit temporary labor agencies that are supposed to be their advocates.

I’m supporting with my donation, by writing this article, by shepherding their business plan and, generally, with a long-term commitment to do anything that my boundless energy but meager talent allow, Charleston’s sole non-profit temporary labor agency geared to helping homeless work immediately, and, more important, to take them down a dignified and quick path to self-sufficiency.

This group is In Every Story (IES). It was founded by two 2008 Furman graduates with business acumen and hearts of gold, President Derek Snook and Vice President Peter DeMarco. “President” and “Vice President” are exaggerated titles, and not their idea, for this humble, two-person team. I met Derek at Palmetto Carriage where we are both tour guides. Derek and Peter have immersed themselves into assisting Charleston’s homeless who wish to work. These leaders even live in the Star Gospel Mission on Meeting Street with homeless people. Thus, they aren’t limousine liberals. No one walks the walk and talks the talk like these guys. Derek has even done weeks of covert temporary labor with his homeless friends to experience first hand how the for-profit agencies take advantage of the homeless to pad their pockets.

IES will go toe-to-toe with the for-profit day labor agencies to offer a better product for the homeless and for the groups for whom they work. Oh, I almost forgot to mention, they’ll do it at a competitive price for the employer and direct a higher proportion of the proceeds to the homeless.

Allow me to describe the day labor market, so you better understand its dynamics and severe flaws. Nationally, about 80 percent of these workers are hired on street corners and in the parking lots of home improvement stores. The balance use -- or are often used by -- for-profit temporary help agencies. Businesses pay the sponsors an hourly wage for workers a portion of which is forwarded to the employees. The sum to and from the agencies is supposed to increase with job complexity. As you might expect, construction employs almost half of these laborers who are mostly urban men of all races.

How are the homeless mistreated by the day labor staffers? Of course, the latter don’t attempt to groom them for steady work. They often pay out less to the workers than promised.
Believe it or not, they may even forward less of the proceeds than their contracts with companies and government organizations stipulate. For example, we’ve found a day labor agency that appears to be ripping off not only the homeless but also the City of Charleston. (Rest assured if you lead that agency and are reading this, you can expect me to expose you when I’ve all the evidence.) Often, the laborers have no insurance despite doing dangerous work. They face gender and racial discrimination. There are no benefits. Overall, agencies may target the homeless with their predatory employment practices because they know that this segment of the workforce is vulnerable, desperate and uninformed.

What IES offers is a better product for the laborers and their employers. Why is it great for the homeless workers? The group connects its clients -- it sees them as “clients” and not as subservient laborers -- with steadier (i.e., 40 hours per week), more visible employment. IES makes sure that its clients get paid at least the minimum promised under regulations. Furthermore, under its Hope Fund program, a portion of the income is segregated for forced saving. Remember, the organization’s goal is to help these folks become self-sufficient, which means at least the ability to care for oneself in his apartment and often with his transportation. The group will also purchase workers’ compensation and general liability insurance for its clients. Furthermore, clients will be provided with safety gear when necessary and rides to and from work.

The Hope Fund is a particularly interesting and powerful concept. Here’s how it works. The typical wage for a day laborer in Charleston is $12 per hour of which $9.75 is to go to the employee. Of course, as I wrote above, some for-profit agencies unethically and perhaps illegally discount the payout to boost their profits. IES will be sure to forward the $9.75 but set aside $2.50 of it for The Hope Fund for that client so that he has a forced savings program in order to accumulate assets more quickly so that he can rent an apartment and buy a used car.

How does the hiring organization benefit? Workers that have steady employment are more motivated. Beyond that, when they’re motivated they show up for work promptly and arrive sober. With feedback from the employer, IES grades its clients on their job performance. The data is shared with prospective employers. Also, the group randomly tests for drugs and alcohol. The for-profit day labor agencies don’t vet employees because they don’t care if they show up tomorrow. For the same price, IES provides higher quality, more dependable, longer tenured clients who do better work and who -- for the first time in too long -- respect themselves.

As you can see, this is a better and more cost effective way to help Charleston’s homeless work and attain self-sufficiency. Leaders Derek Snook and Peter DeMarco are raising $100,000 to launch their program to help 20 clients in the first year and then 40 in each of the next two years. Clients are expected to be self-sufficient and out of the program by the end of their first year. To manage the organization, Derek and Peter will pay themselves no more than what their clients get paid net, or $9.75 an hour. These two also live in the Start Gospel Mission with their homeless clients and friends. The Mission will serve as their “office” for at least three years.

Bottom line: Essentially every penny of one’s “investment” goes to putting Charleston’s homeless to work and to self-sufficiency within twelve months. Please ask me, Derek or Peter -- both at ineverystory@gmail.com -- for a copy of their business plan, which I endorse, and their introductory PowerPoint presentation.

Here’s how I’m helping in the near term in addition to sharing this story with you. I’m making a tax-deductible donation to this registered entity. I’m also hosting an event on Thursday, April 29 for IES at The Old South Barber Spa at 10 State Street beginning at 6PM. If you’ve never been to the Spa, which was just voted 2010 “Best Barber” by the Charleston City Paper, you must check it out. It’s a cool, tastefully redone downtown historical building. I’m buying the food and drinks. Derek and Peter and other supporters will be there to share their vision. Please RSVP to me or to ineverystory@gmail.com. You’ll have a great time at a terrific venue and while you’re there you may decide to support IES as it gets its first 100 homeless men self-sufficient within three years with essentially every penny going to their benefit.

Paul has been an equity analyst, portfolio manager or strategist since 1987. He’s at 843-693-5845 or at paul@winsorsouth.com

Derek Snook is IES’s contact. He’s at 843-327-8456. The organization’s e-mail address and blog link are ineverystory@gmail.com and http://ineverystory.blogspot.com, respectively.