Skip to content

Are Differential Wages for the Disabled Discriminatory?

03/29/2016

Today, The Atlantic ran an article on workers with disabilities and the sub-minimum wage.

Honestly, before reading it I didn’t even know this was an issue. In a nutshell:

The Fair Labor Standards Act (FLSA), section 14(c) allows employers who hire individuals with disabilities to pay them less than the minimum wage. According to the article, 14(c) was originally designed to provide an incentive for companies in industrial sectors to hire disabled veterans after the First World War. Today, the program is used to employ individuals with a range of disabilities who might not otherwise be able to hold down a traditional job.

However, organizations such as the Disability Rights Network and the Autistic Self-Advocacy Network argue that paying these workers less than minimum wage is an antiquated idea which demeans people with disabilities and creates perverse incentives to exploit their labor.

Hillary Clinton recently called attention to the issue on the campaign trail:

When it comes to jobs, we’ve got to figure out how we get the minimum wage up and include people with disabilities in the minimum wage. There should not be a tiered wage, and right now there is a tiered wage when it comes to facilities that do provide opportunities but not at a self-sufficient wage that enables people to gain a degree of independence as far as they can go. So I want us to take a hard look at raising the minimum wage and ending the tiered minimum wages, whether it’s for people with disabilities or the tipped wage….When people talk about raising the minimum wage, they don’t always talk about the legal loopholes that we have in it and I want to get rid of those and I want to get rid of that for people with disabilities too.
At first, I reacted to this article in roughly the way I think its author and the advocates quoted within it wanted me to – with outrage and empathy. However, once I did a few minutes’ research on the regulations surrounding the sub-minimum wage and talked to a few friends with experience on the issue, a more complicated picture emerged.
In my opinion, this article is misleading, and it and Secretary Clinton are advocating for the wrong solution to a real problem.

As referenced above, the article describes unscrupulous employers who entice care providers to send them workers with disabilities, and then play a ball-and-cups game with their responsibilities so that they never “graduate”, guaranteeing cheap labor and exploiting the program.
It further argues that paying these workers less than a minimum wage undermines a growing movement toward independence and away from institutionalization for people with disabilities.
As such the article advocates raising the 14(c) minimum wage to that of other minimum wage workers to provide equality and dignity. Emotionally, it’s a resonant appeal – work is work, and just because someone is disabled doesn’t mean they should be be paid less than a non-disabled person for the same job.

The problem is that this argument is a pretty egregious straw man.
In reality, the 14(c) program involves a host of regulation and program requirements that are actually structured pretty intelligently, at least on paper. In order to hire persons with disabilities and pay them a sub-minimum wage, an employer must:
  • Obtain an authorizing certificate from the Wage and Hour Division. This certificate requires the submission of a host of data about the worker’s disability and the type of work being done. This data is important, because the employer must also…
  • Pay a commensurate wage rate. This means that the sub-minimum wage the employer pays must be a based from the prevailing wage for that type of work, and proportional to the quality and quantity of that individual worker’s productivity.
  • Be paid overtime for work in excess of 40 hours/week, and be given full fringe benefits, depending on their wage determination. In addition…
  • A sub-minimum wage may only be paid when a person’s disability is severe enough  to affect their work performance.

These are smart regulations that make sense. If you are employing a person whose disability allows them to do the job at a fraction of a non-disabled worker’s capacity, paying them a full wage would quickly make employing them an untenable financial liability. It should also be noted that the wage determination is being made based on the prevailing wage in that sector – a calculation which traditionally skews higher than the average if the employment sector has many workers represented by a labor union.

Thus, as it is designed, the program does not seem to be creating an opportunity to exploit labor, but rather an opportunity for disabled workers to participate despite substandard performance. According to a friend and former colleague:

These truly are, in the vast majority of cases, people who will not be employed if they must be paid minimum wage.

The Costco I worked at participated in a program where high functioning teens and adults with Downs Syndrome could come and sweep the food court, and clean the condiments section.

They were, by comparison to regular workers, completely unqualified for their work – they were slow and generally did a poor job. But it’s a good experience and a stab at normalcy for them. Those guys (and gals) were also stoked to come and do similar work that i dreaded every day. They were usually happy as hell be be at work, and to chat with whom ever wanted to talk.

But there’s no way any company (at least one with shareholders) can justify participating in such a project if they must be paid like every one else. They didn’t make much money, but they also didn’t work much (like, 2 hours per shift, maybe). It was far from exploitation.

Additionally, according to a 2001 GAO report on the subject:

70 percent of the Results in Brief Page 4 GAO-01-886 Special Minimum Wage Program workers are less than half as productive as workers without disabilities performing the same jobs. Because their productivity rates are so low, these workers receive a very low hourly wage rate; more than half of all 14(c) workers earns $2.50 an hour or less. Eighty-six percent of 14(c) workers work part-time.

This sort of situation is why FLSA Section 14(c) creates a scaled wage system which is proportional to the productivity of the worker (and by extension, the extent of their disability). Some people might have a disability which does not meaningfully interfere with their performance of that job’s responsibilities. In that case, their wage would be required, by law, to be equal to that of a standard, non-disabled employee. If a worker, due to their disability, is doing their best but cannot perform at a standard level and requires additional supervision (and perhaps more work from other employees to compensate), it is fair that that person should not be compensated at the same level as others.

I believe every worker has the right to make enough money to support themselves, but that wage is predicated on the worker being able to, well, do their job. It seems to me that in many cases, these jobs are largely charitable facsimiles that allow persons with potentially severe disabilities to participate in society. To be clear, this is indisputably a good thing. As study after study has shown, societies become more tolerant and harmonious when people intermingle with diverse groups – this can and should include individuals with disabilities. For centuries, people with disabilities have been institutionalized or otherwise shunted to the outskirts of society, segregating them into isolated, often abusive situations. But inclusion of the severely disabled in society, while a laudable goal, does not mean that we should all but sever the connection between work and wage by rewarding normally termination-worthy productivity with full compensation.

Receiving a higher wage also has the potential to jeopardize a disabled person’s qualification for other supportive services, including SSI disability benefits, as well as eligibility for services at many non-profits. There are good arguments to be made that a higher minimum wage (or a minimum income) should be used to reduce dependence on non-profit services and government benefits, but the Atlantic article doesn’t even seem to apprehend these consequences. Any attempt to so drastically change the source and type of income for disabled persons should at least be conversant with these unintended consequences.

In addition, many of these workers are not, legally speaking, independent adults. Many have legal guardians or are subject to a conservatorship. In both cases, that person is generally not in control of their personal finances. Where will this money go? If they are not in charge of their own spending and saving, how much will an increased wage really benefit a person with a severe disability, or contribute toward their feeling of reward and self-worth from their work? Couldn’t such wage increases also increase the potential for abuse by guardians and conservators? These are all important questions the article doesn’t even mention.

Ari Ne’eman, a co-founder of the Autistic Self Advocacy Network and member of a Labor Department advisory board on the sub-minimum wage, is quoted in the article as saying “We believe people with disabilities deserve the same labor law protections as people without disabilities.” Judging by the regulations, people with disabilities are being protected by the law. And it seems to me like 14(c), if implemented and regulated well, is providing opportunity where none would ordinarily exist, not exploiting workers with disabilities.

If some employers are taking advantage of the program in the unscrupulous ways described above, that’s a regulation and oversight problem, not a wage issue. There are a myriad of more targeted, more effective ways to tackle this issue:

  • Pass legislation to tighten reporting requirements, or increase the frequency of Department of Labor inspections.
  • Make it easier for workers with disabilities or their legal guardians to file complaints or sue for damages.
  • Maybe give an agency adequate funding for once. According to the previously-mentioned 2001 GAO report, the Department of Labor has historically made enforcement of sub-minimum wage laws a low priority:

Labor has not effectively managed the special minimum wage program to ensure that 14(c) workers receive the correct wages because, according to WHD officials, the agency placed a low priority on the program in past years. Instead, Labor devoted attention to other enforcement programs such as child labor and the garment industry. In fiscal year 2000, Labor began assigning additional resources to the program, increasing its enforcement efforts, and providing more training and guidance to its own staff and 14(c) employers. However, Labor lacks the data it needs to manage the program and determine what resources are needed to ensure compliance by employers.

Raising the minimum wage for disabled workers under Section 14(c) of FLSA will not solve the issue of exploitation, nor is it clear that doing so will meaningfully accomplish just outcomes for these workers – if anything, the prohibitive cost of such action will lead to the elimination of these opportunities for some of our most disabled citizens. 


 

There’s a weird sense in which some of these advocacy organizations are pushing for a sort of Randian concept of self-fulfillment with this wage hike – the belief that with the right level of economic power, any individual can, a la John Galt, Fulfill Their Potential and free themselves from society’s paternalistic shackles. This sort of analysis makes two fundamental errors.

First, it ignores the reality that many of these workers are disabled to the extent that they cannot safely function as legally responsible adults. Like any person, disabled or not, they require the support of friends, family, neighbors, co-workers, and other people who care about their well-being to lead happy, fulfilling lives. Creating policies which create and strengthen these communities is the best way to ensure the success and well-being of these workers. And if disabled workers are falling into poverty, we should strengthen the safety net to stop it.

Second, it draws a repulsively direct comparison between the worth of a person and their economic compensation. People with disabilities have value because they are human beings, full stop – at least according to my religious tradition, because God loves all of us with the same fierce unconditionality. We can value hard work – we can admire those who have the capacity to succeed in our economy. But ultimately, a society which teaches its citizens to measure themselves and each other primarily by their economic output has fallen to evil – it is one which has forgotten the implicit and irreducible value of human life.


 

To sum up, I am sure that disability advocates and Secretary Clinton seek to address a real problem – the exploitation of the labor of people with disabilities. But a wage hike is the wrong way to do it.

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: