by Michelle Diament
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| Charlie McGrory, left, who has Down syndrome, and his brother Andy, who is also his job coach, bag groceries at Hy-Vee in Winona, Minn. in 2018. Charlie McGrory previously worked at a sheltered workshop, but transitioned to integrated employment as a result of a 2014 federal law that prioritizes helping people with disabilities find jobs in the community. (David Joles/Star Tribune/TNS) |
More than a dozen states have moved in
recent years to stop employers from paying workers with disabilities
less than minimum wage. Now, it’s starting to become clear how that
decision is playing out on the ground.
A first-of-its-kind analysis finds that
eliminating what’s known as subminimum wage employment does not lead to a
significant drop in the number of people with disabilities who are
employed, the hours they work or their wages.
Within two years, subminimum wage employment fell by about 2,000 workers per state, according to findings
published in the June issue of the journal Labour Economics. At the
same time, income from government welfare programs declined by more than
12%.
“The biggest takeaway from our study is
that the employment fears that have kept section 14(c) in place at the
federal level are not supported by the national data,” said Michelle
Yin, an economist at Northwestern University who led the study. “The
policy does exactly what it is designed to do, that is sheltered
workshop employment falls, … but workers do not disappear from the labor
force. They remain employed, and by different measures, they become
more economically self-sufficient.”
The study offers a new look at a practice
that has persisted for nearly a century. Under a federal law dating back
to 1938, employers can obtain special 14(c) certificates from the U.S.
Department of Labor allowing them to pay workers with disabilities less
than the federal minimum of $7.25 per hour.
Since 2015, however, 17 states have
enacted legislation eliminating 14(c) certificates, according to the
Association of People Supporting Employment First. The Biden
administration sought to take things a step further by ending the
program nationally. In 2024, the Labor Department proposed plans to stop issuing new certificates and phase out 14(c) over three years.
Now, the winds appear to be shifting. The Trump administration withdrew the Labor Department plan last year and the House Committee on Education and Workforce advanced a bill in May designed to make it easier for young adults with disabilities to enter 14(c) employment.
For the study, Yin and her colleagues
looked at administrative data from the Department of Labor and the
Census Bureau’s Current Population Survey from 2009 to 2024 on 15 states
that eliminated subminimum wage employment. Each state ended subminimum
wage on a different timetable, but notably, the patterns the
researchers observed were remarkably similar across states no matter
their size or political leanings.
However, Yin admits that the outcomes aren’t entirely rosy for everyone.
“The aggregate results likely reflect two
groups moving in different directions,” she said. “Workers with higher
productivity and more labor market experience appear to find competitive
employment. Workers with the most significant disabilities and the
least experience outside sheltered settings may exit employment rather
than transition. The averages look encouraging, but averages can mask
who gets left behind.”
That’s where the approach a particular
state took matters, Yin said. In states that prioritized supported
employment, job coaching and vocational rehabilitation alongside
eliminating subminimum wage, individuals were more like to transition to
new employment, while states that neglected to build such
infrastructure left some workers without appropriate options.
Still, Yin says the findings broadly support moving away from subminimum wage.
“The feared employment collapse has not
materialized in any of the 15 states we studied,” she said. “The
transition from subminimum wage to competitive employment pays for
itself when the investment is in place.”
But Hugo Dwyer, executive director of VOR,
which supports the availability of subminimum wage employment, said the
numbers don’t tell the whole story.
“We need to somehow look at the human
side, and measure satisfaction and the opportunity for personal growth,”
he said, adding that it’s important for individuals with disabilities
to have choices.
“No one has to work in a sheltered
workshop if they don’t want to,” Dwyer noted. “But they are right for a
certain cohort of individuals who have a combination of skills that
exceed those exercised in day programs and challenges that make it
difficult for even the most patient employer to accommodate them.”
Full Article & Source:
These Places Banned Subminimum Wage. Here’s What Happened To Workers With Disabilities