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Eliminating subminimum wage waivers will harm hundreds of thousands of people with disabilities

Eliminating subminimum wage waivers will harm hundreds of thousands of people with disabilities
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The road to hell is paved with good intentions. That is perhaps the most generous statement that can be said about efforts to eliminate subminimum wage waivers that benefit — yes benefit — hundreds of thousands of people with disabilities across the U.S.

The legal precedent for paying disabled workers less than minimum wage dates back to the 1938 Fair Labors and Standards Act. Under a provision known as 14(c), employers were permitted to pay less than minimum wage to disabled workers — in order to help them gain entry to the workforce.

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As such, it is a myth to say that paying subminimum wages to workers with disabilities leaves them vulnerable to exploitation and keeps them out of the general employment market, as claimed by Sen. Elizabeth Warren (D-Mass.) at a Senate Health Committee Hearing in Oct. 2017. She continues to argue this point to this day.

 

Furthermore, it is not true that employers across the country are using this waiver to acquire cheap labor instead of paying minimum wage for the same work and performance as able-bodied workers.

The truth is that the vast majority of “employers” making use of this waiver are in fact, sheltered workshops, rather than private employers. Based on April, 2015 data from Wages and Hours Division of the Department of Labor, 2,820 entities in the United States hold Section 14(c) subminimum wage certificates. Almost all — 89 percent— are sheltered workshops.

In 2014, 75 percent of individuals with I/DD receiving day or employment services through a state I/DD system were attending a sheltered or facility-based environment.

This means that efforts to remove 14 (c) subminimum wage certificates are essentially targeting one group, and one group alone: people with disabilities who choose to attend sheltered workshops. Few if any employers in the wider community are making use of this waiver.

Rather than creating a culture of isolation, the fact that 75 percent of individuals with I/DD are in a sheltered environment confirms the need for such programs.

Furthermore, subminimum wages are paid only one certain, piece-work jobs, and the rate of pay is monitored by the Department of Labor. Workers with disabilities are paid according to their productivity as compared to a well-trained able-bodied worker.

By way of illustration: If an able-bodied person can produce 100 widgets and hour, while a worker with disabilities can only produce 10 or 15 (and that is often the case), it would be economically impossible to pay them the same wages. Rather, there is a base rate of pay for all. Actual paychecks depend on actual productivity.

Another common idea used by the anti-workshop crowd is that sheltered workshops unnecessarily isolate and segregate people with disabilities from seeking employment in the community, by creating a culture of low expectations.

The truth is that attending a sheltered workshop is voluntary. People must apply for admission and are free to discontinue their participation whenever they see fit. In addition, those seeking work in the community have ample resources via various vocational rehabilitation departments to work toward this goal.

This means that the people attending workshops are there because they either cannot or do not wish to work in a community setting. It is an expression of their free choice as American citizens. Eliminating this option essentially declares this group of people unfit to determine what is in their own best interests.

Finally, several states have actually closed sheltered workshops, and the result is not pretty. Rather than increasing employment, the exact opposite has occurred.

To cite one example, Maine ordered a phase-out of disabled workshops starting in 2008. Two-thirds of those onetime employees were unable to find other paid positions, according to a June 2015 study by George Washington University, and enrollment in daycare and other programs soared to 3,178, from 550.

The study found that people with intellectual disabilities in Maine show an average of 12 hours worked per week in 2011, the lowest in the nation. According to the 2012 American Community Survey approximately 34 percent of people with disabilities in Maine were working, compared with nearly 80 percent of people without disabilities.6

Furthermore, efforts to create integrated employment in that state are going in the opposite direction, as the percentage of people served in integrated employment settings decreased from 31 percent in 2001 to 23 percent in 2010.

In Vermont, the percentage of working age people in supported employment dropped from 39 percent in 2007 to 36 percent in 2010. The average hours worked per week had dropped in 2010 to 9, down from 15 hours in 1999.

There is little evidence to suggest that other states will fare any better. In the end, eliminating 14c will do irreparable harm to hundreds of thousands of people with disabilities across the country.

David Ordan is a member of the board of directors of Disability Service Provider Network, a Wisconsin-based advocacy group on behalf of people with disabilities.