Debate continues to swirl nationally on the fate of a practice born of an 86-year-old federal statute allowing companies to pay workers with disabilities subminimum wages: anything below the federal minimum wage of $7.25 an hour, but for some roles as little as 25 cents per hour. Those in favor of repealing this statute highlight assumptions about reduced productivity along with the unfairness of this wage level—often used elsewhere to pay, for example, food service workers who typically make additional wages in tips. Those against repeal have voiced concerns that, without subminimum wage laws, employment opportunities for workers with disabilities may dwindle.
However, one new study has found no significant negative impacts in states that have already ended the practice, according to researchers at the University of Pennsylvania Perelman School of Medicine. The findings, published in JAMA Health Forum, include important policy considerations for lawmakers to consider as a new Congress takes shape.
Researchers studied two states—Maryland and New Hampshire—that had phased-out the practice, created in 1938 as part of the Fair Labor Standards Act (FLSA) to incentivize businesses to hire disabled soldiers, who were thought to be less productive in mainstream workforce. Currently, employers paying subminimum wages to people with disabilities must receive a 14c certificate that is approved by the Department of Labor. Many do so in what are known as sheltered workshops, often separating these employees—a majority of whom have intellectual and psychiatric disabilities—from their co-workers who do not have disabilities.
In the study, there was increased labor force participation of people with cognitive disabilities in these states after repeal of this law, with varying effects at the individual state level.
“We know that employment and wages are important determinants of health,” says Atheendar Venkataramani, associate professor of health policy at the Perelman School of Medicine and medicine and senior author. “This builds on previous studies that have shown employment and financial stability to be key drivers of health disparities among people with disabilities. Among people with intellectual disabilities, studies have found integrated employment to be associated with better psychological well-being and self-esteem and job satisfaction.”
Read more at Penn Medicine News.
