Employers can legally pay some workers — many of them disabled — less than the minimum wage, but the rules about the subminimum wage may be changing.
The subminimum wage was part of the Fair Labor Standards Act, passed during the depression. The idea was to make disabled workers more appealing.
“So that they would have opportunities while employers would not have to pay a rate of pay that they could not justify based on the productivity of those employees,” said Brad Hershbein, an economist at the W.E. Upjohn Institute for Employment Research.
So, how’s that worked out? Depends who you ask. Talk to Curtis Decker and he’ll tell you the subminimum wage leads to exploitation of disabled workers, and we should get rid of it, eventually.
“This is an example, I think, of a disability policy that was well-intentioned 80 years ago, and has kind of lost its effectiveness and its purpose,” said Decker, who heads the National Disability Rights Network.
Congress agreed, and passed the Workforce Innovation and Opportunity Act. President Obama signed it about 18 months ago.
The government is still figuring out the rules. But Decker says the idea is to put disabled teens in regular jobs and not shunt them into subminimum wage jobs. But nonprofits who employ them at the lower wage say, not so fast.
“Don’t throw out the baby with the bathwater,” said Leann Fox, a lobbyist for ACCSES, a trade group for nonprofits employing the disabled. She says proposed rules requiring them to employ non-disabled workers could put them out of business — and deprive disabled workers of a job.
“It gives them something that they can have as their own, where they’re earning a paycheck,” she said. “There’s a pride and a sense of self-worth.”
Economist Hershbein says it’s worth tinkering with the subminimum wage, but it’s not clear that getting rid of it entirely is the answer.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.