Disabled Workers Concerned That Proposed Wage Hike May Leave Them Unemployed

Legislation may eliminate sub-minimum wage that helps intellectually disabled find jobs

Matt Thibodeau / Courtesy of Gail Thibodeau
August 14, 2021

Matt Thibodeau is a professional packager whose work includes shrink-wrapping, glueing, labeling, bagging, and package assembling. He eats lunch with his coworkers, and he typically gets home before 5:00 p.m. When he gets his check every two weeks his colleagues cheer for him, even though the average take-home pay at his Pennsylvania plant is $3.40 per hour, less than half the federal minimum of $7.25.

Matt, like many of his coworkers at Associated Production Services, Inc. (APS), has intellectual and and physical disabilities. Matt's disabilities have not stopped him from enjoying a 14-year career in shipping, but a bipartisan legislative push to eliminate a 1938 provision—known as Section 14(c)—that allows people with severe disabilities to collect sub-minimum wages could. Gail Thibodeau, Matt's mother, sees the law as a safety net for people with severe mental disabilities that helps them find meaningful work and companionship outside the home. Thibodeau is concerned that people with disabilities like her son will not be able to find work if employers are forced to pay them as much as their coworkers.

"I felt like they were being targeted because they couldn't speak for themselves, and so that made us parents even more determined to speak for them," Thibodeau said. "Not good," her son added.

Six states have eliminated sub-minimum wages in recent years. President Biden's stimulus bill, the "American Rescue Plan," originally sought to end the sub-minimum wage as well. But Rep. Bobby Scott (D., Va.) and Rep. Cathy McMorris Rodgers (R., Wash.) introduced standalone legislation to phase out 14(c) certificates. The proposal would create a grant program for states that is designed to phase out the sub-minimum wage over five years. States would be eligible for between $2 million and $10 million grants over the five-year period, while employers could apply for grants of up to $500,000 over the first three years. Rep. Gwen Moore (D., Wis.), one of the bill's 19 Democratic cosponsors, told the Washington Free Beacon that sub-minimum wage laws are "outdated."

"People with disabilities deserve the same treatment and respect as other active participants in the workforce," Moore said. "I understand that the sub-minimum wage has been ingrained in our system, but we can dedicate the resources and provide technical assistance to advance as a society beyond this practice."

Only 15 percent of people with intellectual disabilities have jobs, and half of those workers are paid below the minimum wage, according to disability rights group Creative Spirit. Some economic experts expressed concern that eliminating 14(c) certificates would lead to a surge in unemployment. Companies may be unwilling to take a chance on an intellectually disabled cashier if they can find another worker who would not require as much training or attention, according to Bill Shughart, research director at the Independent Institute.

"The primary effect will be to make it harder for disabled people to find jobs, especially in small businesses," Shughart said.

Ryan Bourne, a policy scholar of economics at the Cato Institute, also remarked on the potential for people with disabilities to lose their jobs. Even if the disabled manage to keep those jobs, they could see their workload severely hampered. One reason sub-minimum wage laws have remained in place is to ensure that families can qualify for federal disability benefits to care for their children. Bourne said reform advocates have taken a narrow view of the role that work plays in the lives of those with severe disabilities. For many, the paycheck is the least of their concerns; they enjoy "being able to engage as part of a team, being able to feel the reward of serving customers is something that adds immense value."

Barry Bluestone, a professor at Northeastern University, disagreed with the need for a sub-minimum wage in a strong labor market, though he also called for companion legislation to "protect [disabled people] against the loss of their benefits." He acknowledged that there may have been a purpose for the sub-minimum wage in the past but said circumstances have changed.

"In this tight labor market, there is less need for the sub-minimum wage to assure those who are disabled can find work. So that at this point, while I think many employers are paying above the sub-minimum wage, even to disabled workers, eliminating that provision would not harm most disabled workers, and would assist them to have a somewhat better standard of living than they otherwise would have," Bluestone said.

Jay Belding disagrees. He founded APS, the work center that employs Matt Thibodeau, in 1977. APS employs more than 500 people, most of whom have severe disabilities, which makes it the largest not-for-profit work center for people with severe mental disabilities in Pennsylvania. APS adheres to significant regulations, including time studies to make sure people are being accurately compensated based on their productivity compared to an average person. The company also keeps records on its success rate at putting people into competitive employment. According to Belding, APS has been able to find employment for less than 2 percent of its people based on challenges that include transportation to work. Belding worries that if Congress passes the proposed legislation, people could be forced to wait for decades for meaningful employment while the skills they learned at APS erode.

"What annoys me about this legislation: There has been no notice discussion about how they're going to achieve any better result," Belding said.

Dozens of disability advocacy groups have signed on to support a repeal of Section 14(c). The National Down Syndrome Society (NDSS) is among the most prominent of the groups. The group is confident that raising wages will not price people with disabilities out of Social Security Disability benefits. Ashley Helsing, who runs grassroots advocacy at NDSS, noted that the proposed legislation has provisions with information about tax-advantaged savings account and benefits counseling. She also noted that NDSS is very supportive of raising income limitations on federal benefits.

"It's a hard thing, right, but we know that this legislation has these different aspects to it, that will allow people to be paid a fair wage for the work that they are doing, while being able to maintain their benefits as well," Helsing told the Free Beacon. NDSS president Kandi Pickard said the policy should be approached from a "civil rights perspective," rather than an economics standpoint.

The sub-minimum wage has already sparked controversy, at least among federal regulators. In September 2020, the Commission on Civil Rights issued a report on sub-minimum wages that recommended that 14(c) be phased out. More than 9,700 comments were received from the public by the commission; 98 percent of those comments were in favor of keeping Section 14(c) in place, while only 1 percent of commenters were in favor of repealing or phasing out Section 14(c). The commission's four Democratic members voted to publish the recommendations over the objections of Republican and Independent commissioners.

GOP commissioner Peter Kirsanow dissented, saying the "one-size-fits-all" approach to wages ignores the real needs of the disabled.

"There's some type of movement afoot to appeal similar in ways that's consistent with what the left does with everything," Kirsanow told the Free Beacon. "Everything must be standardized, regularized one-size-fits-all, and they like to deem what the appropriate wages are is a part of leftism. And I don't mean to be political about it, but that's just the fact that they don't like the fact that people have alternatives, and can be flexible. And, look, many of them think it's the right thing to do."

Commissioner Gail Heriot, an independent who also dissented from the report, told the Free Beacon that if Congress's proposed legislation does away with 14(c) certificates, "the result will almost certainly be to throw Down syndrome workers out of their jobs."

Democratic commissioner Michael Yaki declined to speak on the matter, and the other Democratic commissioners did not respond to requests for comment.

While the sub-minimum wage may be losing support in the political, regulatory, nonprofit class, some parents remain skeptical. Eric Wilson is a member of the A Team, an advocacy group for people with disabilities that seeks to maintain Section 14(c). Wilson said that there are a number of people in the work programs that would not be able to get into competitive employment even with support. His son Christopher has been employed at work centers for the past 18 years. Wilson and other parents fear that the elimination of Section 14(c) would force people with disabilities into adult day care centers, robbing them of any sense of accomplishment.

"He feels like he's a contributing person. He's got a job. He feels proud of us. And another thing is, he has all of his friends there he knows from the Special Olympics. He feels very comfortable and safe there," Wilson said. "These are things that are important to him. We certainly don't feel like our loved ones are being exploited."

When asked how he would feel if he could no longer work at the center, Christopher Wilson said, "Frustrated."

Update Aug. 14, 10:20 am: This post has been updated to note that Matt Thibodeau has intellectual and physical disabilities but not Down syndrome.