Minimum Wage Rates and Employment of Individuals with Disabilities

The minimum wage touches upon economic, political, sociological, psychological, and legal issues. The inherent interest of economists in the minimum wage is centered upon the classic query of cost-benefit; that is, does the benefit derived from the production of a particular employee justify the additional cost to the employer of the higher wage that an employee will be paid after an increase in the minimum wage (Brown, Gilroy, & Kohen, 1982)? Politically, fiscal liberals have historically been in favor of larger increases to the minimum wage while fiscal conservatives have opposed them (Levin-Waldman, 2001). Sociologically, the minimum wage has been considered a welfare program with the goal of improving the income of the lowest paid workers, workers who tend to be from disadvantaged groups such as minorities (Chaplin, 2003). Social psychologists have pointed to motivation theories when studying the effects of the minimum wage on welfare recipients (Page, Spetz, & Millar, 2002). The legal issues in minimum wage laws range from the power of the state to enact a minimum wage law and to the question of constitutionality of the federal minimum wage laws (Levin-Walden, 2001). The emphasis on increases to the minimum wage as a means of social welfare rests on the assumption that minimum wage employees are dependent on such government policies in order to obtain a wage increase (Even & Macpherson, 2004). The apparent paradox in wage mandates is that the government tells employers what to pay, but not who to hire. If an increase in the minimum wage results in fewer opportunities for employment for a particular group of people, the increase leads to application of the law of unintended consequences. The term unintended consequences refers to the "detrimental, unintended consequences of actions undertaken for what are intended to be noble purposes" (Shaffer, 2003, 5). The ability to predict outcomes is dependent upon awareness of all variables that could influence an event. With complex systems, however, complete knowledge of all such variables is always unobtainable. This means there will always be a discrepancy between that which is planned for and that which actually results. Three of the most significant pieces of legislation affecting individuals with disabilities are thought to have succumbed to the law of unintended consequences: First, studies have suggested that the "consequences of the employment provision of the ADA [Americans with Disabilities Act] has led to less employment of disabled workers" (DeLeire, 2000, p.21). Second, according to Oyer and Schaefer (2003), rather than increasing the hiring of women, minorities, and people with disabilities, the Civil Rights Act of 1991, has, in fact, had no effect on the hiring of women and people with disabilities, and has had "a mild negative effect on average black employment" (p. 44). Third, the Ticket to Work and Work Incentives Improvement Act of 1999 was touted as a means of rescuing the Social Security Administration from bankruptcy by providing a program that would return its beneficiaries to the workforce (Growick & Drew, 2003). According to Growick and Drew, the initial dismal results of the Ticket to Work program are related to three unintended consequences that diverted attention from the primary objectives of this program. The purpose of this examination of the employment of individuals with disabilities and minimum wage rates is not limited to increases in minimum wages as isolated events, but also to examine the employment of individuals with disabilities over time. Rehabilitation professionals should not only understand how disability affects employment opportunities; they must likewise understand the interaction between public policies, including the minimum wage and other laws that may unintentionally limit the employment opportunities for the very people whom the policies are meant to assist. …