Lawmakers Want to Close the Loophole That Pays Disabled Workers Pennies An Hour

Recently released Census data reveal that, in 2015, the poverty rate dropped significantly for most demographic groups. One of the only groups who didn’t see an improvement were people with disabilities: the percentage of disabled Americans (age 18-64) living in poverty increased from 25.9% to 26.5%. For Americans without disabilities, the poverty rate decreased from 14.1% to 12.8%.

The data suggest the challenge disabled people face in trying to escape poverty.  But there is hope that an emerging bipartisan consensus on disability employment may mark an important step in the right direction.

Currently, under the Fair Labor Standards Act, a certified “sheltered workshop” can pay disabled Americans less than the minimum wage—sometimes as little as pennies per hour. As a result, approximately 400,000 disabled Americans are paid a subminimum wage, which makes it more difficult for them to work their way out of poverty.

"It’s a relic from a time when our politicians embraced other draconian ideas like eugenics."

For decades, activists were unable to get even top labor Democrats like former Senator Tom Harkin—a key sponsor of the Americans with Disabilities Act—to challenge this labor law. Harkin, like many Democrats, argued that it was a key policy that helped people with disabilities get needed training for better jobs.  However, studies showthat rather than finding higher-quality jobs, the overwhelming majority of these disabled workers spend their careers continuing to earn the subminimum wage.

Ari Ne’eman, who was appointed by President Obama to the National Council on Disability, says the subminimum wage is an outdated idea. “It’s a relic from a time when our politicians embraced other draconian ideas like eugenics,” says Ne’eman. “This is 1930’s thinking.”

Fortunately, a movement to extend the minimum wage to disabled workers has now spread to four states and has reached the federal level as well.

In 2003, Vermont was the first state to eliminate the subminimum wage for persons with disabilities. Instead of paying nonprofits to employ these workers at a subminimum wage, the state invested those funds in wraparound services to help employers accommodate workers with disabilities. Rather than reducing the number of jobs for disabled workers, as critics of the policy had predicted, the employment rate for disabled workers rose—it is now double the national rate.  In the last five years New Hampshire, Oregon, and Maryland have followed Vermont’s lead.

At the federal level, President Obama raised the minimum wage for tens of thousands of disabled federal contractors working in “concessions and concession industries;” and Labor Secretary Tom Perez has said  that he wants all states to eliminate the usage of the subminimum wage to employ persons with disabilities.

Now there is also bipartisan support in both the House and the Senate for the TIME Act, which would ban the subminimum wage and provide funding to help transition disabled workers into mainstream employment.

Republican Congressman Gregg Harper, whose son has Fragile X syndrome, is a cosponsor of the legislation. Congressman Jim Langevin (D-RI), who is paralyzed, and House Republican Conference Chairwoman Cathy McMorris-Rodgers (R-WA), whose son has Down syndrome, are also supporting the push to pass the bill.

“For many of these people, it’s because they have family members with disabilities,” says Allison Wohl, Executive Director of the Association of People Supporting Employment First.  But she says education also plays a role.  “It’s universal—the reaction you get when you tell a hill staffer about the subminimum wage. Their face drops and it’s clear they don’t know what to say.”

Ne’eman hopes that the space created on both sides of the aisle to tackle low wages among disabled workers will lead to more creative thinking about how to raise wages for all workers.

“We call it the curb effect,” he says.  “Just like the [ramp at the] curb also makes it easier for [pedestrians with] a piece of luggage or a stroller.  It ends up helping everyone.” 

So far it’s unclear if the legislation is going to move in this Congress, but advocates remain hopeful. These days, even the possibility of Republicans and Democrats coming together to support pro-worker legislation is a rare thing. And many in the disability and labor communities hold out hope that passing this bill will be the first of more victories that lie ahead.