Updated

Updated · The Washington Post · Jun 12

Congress Weighs 6-Year Bill to End Disabled Workers' Subminimum Wages as 15 States Show No Job Losses

Updated

Updated · The Washington Post · Jun 12

Congress Weighs 6-Year Bill to End Disabled Workers' Subminimum Wages as 15 States Show No Job Losses

Q: After 88 years, what new evidence is challenging the practice of paying disabled workers below minimum wage?

The new evidence is peer-reviewed research showing that ending subminimum wages for disabled workers does not cause the widespread job losses opponents long predicted. A recent study in *Labour Economics* examined the 15 states that have already abolished subminimum wages under Section 14(c) of the 1938 Fair Labor Standards Act. It found that while sheltered workshop jobs declined, overall employment for workers with disabilities did not fall. Employment rates, hours worked, and placement in competitive jobs remained broadly stable in the years after the policy change. The study also found a 12.4 percent drop in welfare dependence after states ended the practice, suggesting that more workers moved toward regular paid employment rather than out of the labor force. That directly weakens the central argument used for decades to defend paying disabled workers less than the federal minimum wage. Other recent evidence adds to the challenge. A 2023 Government Accountability Office report found workers under 14(c) earned an average of $4.15 an hour, with many paid under $3.50. The U.S. Commission on Civil Rights has said the practice violates the civil rights of people with disabilities, and Justice Department actions in states such as Oregon and Rhode Island have pushed employment toward more integrated settings. Taken together, the new evidence suggests disabled workers can be paid fair wages without sacrificing employment opportunities.

3 articles · Updated · The Washington Post · Jun 12

A bipartisan bill before Congress would phase out subminimum wages for workers with disabilities over six years, backed by new peer-reviewed evidence from 15 states.
Fifteen states that ended the practice saw sheltered workshop employment drop by about 2,000 workers per state within two years, but overall disability employment, hours worked and competitive placements stayed at pre-policy levels.
Welfare dependence among workers with disabilities fell 12.4% after the state bans, with the effect strengthening in the second and third years as workers moved off benefits and into the tax base.
Federal transition support is central to the proposal: prior research cited by the authors found vocational rehabilitation returns of $2.55 to $21.54 per dollar invested and quarterly earnings gains of $1,442.
The push comes as national enrollment under subminimum-wage certificates has fallen to about 40,000 in 2024 from roughly 220,000 in 2016, while a 2023 GAO report found nearly half of remaining workers earn under $3.50 an hour.