President Biden’s $1.9 trillion relief package proposes striking the sub-minimum wage allowance for people with disabilities, which, if enacted would require employers to pay disabled workers the federal minimum wage. Who could be against mandating higher wages for the disabled? As with most policy questions, the answer is complex and getting it wrong can have profoundly negative impact on these vulnerable workers.
Under current law, employers are authorized to compensate disabled workers at a rate below the minimum wage if they can demonstrate that the employee’s disability reduces their productivity. As of October, there are over 1,200 employers that compensate over 300,000 disabled workers at rates below-minimum-wage. The advantage of such a policy is that it enables individuals to join the workforce who might otherwise not be competitive in the labor market.
The problem with U.S. policy on this question is that it doesn’t seem to be working. In 2019, just 19.3 percent of persons with disabilities were employed compared to 66.3 percent of persons without disabilities. Among prime age workers 16 to 64, 30.9 percent of persons with disabilities are employed compared to 74.6 percent of persons without disabilities. The over-40-percent U.S. gap between disabled workers and their non-disabled counterparts is striking and concerning, especially when compared to other countries. In France, Germany, and Italy, the comparable gap between disabled and non-disabled employment is between 10 and 20 percent.
Read Full Article »