As federal officials consider ending a program that allows employers to pay people with disabilities less than minimum wage, a new study suggests there are few downsides to doing so.
In what is believed to be the first of its kind studyResearchers examined the consequences in two states that eliminated what is known as subminimum wage employment.
Under an 86-year-old law, employers can obtain so-called Section 14(c) certificates from the U.S. Department of Labor that allow them to pay people with disabilities less than the federal minimum of $7.25 an hour. . As a result, some workers earn only a few cents an hour.
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The practice has been criticized in recent years, with disability advocates arguing that it opens the door to exploitation and limits community participation. As a result, at least 15 states have passed laws to phase out the subminimum wage, and the Labor Department this month proposed ending the program nationwide.
For the new study published in the journal JAMA Health Forum, researchers looked at what happened in New Hampshire, which passed legislation in 2015 to eliminate subminimum wage employment, and Maryland, which passed a phaseout of the program in 2016. .
Using data collected through the U.S. Census Bureau’s American Community Survey between 2010 and 2019, the study assessed how the experiences of people with cognitive disabilities ages 18 to 45 changed once it ended. the subminimum wage in your state.
Both states experienced increases in employment and labor force participation (or the portion of the population that is employed or looking for work) after the repeal of Section 14(c), but to different degrees. The researchers said the findings may have been more pronounced in New Hampshire due to greater investment in integrated job training for people with developmental disabilities after the repeal, different industries that employ these workers, or other state-specific factors.
Additionally, the study notes that Maryland’s 2016 law triggered a four-year phase-out of subminimum wage employment, while New Hampshire had no workers with disabilities earning less than the minimum wage in 2015, when that state banned practice. The fact that New Hampshire has seen jumps in labor force participation and employment suggests, however, that the policy change alone may be significant, the researchers said, and media coverage and debate over Section 14(c) are likely to prompt individuals with developmental disabilities to seek job training opportunities. .
The findings show the “inclusive nature of the repeal, as it brings people with cognitive disabilities who were previously unrelated to job resources into the workforce,” said Mihir Kakara, lead author of the study and assistant professor of neurology at the School of Medicine at New York University. Medicine. “This points to the fact that these people can work in fully integrated jobs with the same pay as their peers who do not have a disability, if they have adequate resources, something that was perceived not to be the case when this law was drafted. for the first time. .”
Even with the variation observed between states, the researchers said it was notable that they found no negative effects on people with developmental disabilities, although they acknowledged that such impacts could not be ruled out for certain subpopulations.
“These findings suggest the importance of state-level factors in shaping program effects, especially as the repeal of Section 14(c) is being debated at the national level,” the authors concluded.
