The “Sub-Minimum Wage” Debate

I confess, I was completely unaware of this issue, or the fact that we even have a so-called “sub-minimum wage.” Section 14(c) of the Fair Labor Standards Act allows individuals with Down Syndrome or other intellectual or developmental disabilities to take certain specially regulated jobs at less than the minimum wage. The usual “raise the minimum wage” crowd wants the exception eliminated, and many states are preparing to do so. Advocates for the disabled and Down Syndrome individuals argue that it is important to keep the sub-minimum wage.

I don’t understand this controversy at all.

Opponents of eliminating the sub-minimum wage argue that it will cause many Down Syndrome individuals to lose their jobs. Of course it will, but how is this different from the fate of all the minimally skilled workers without technical disabilities who lose their jobs when the regular minimum wage is raised? Why is their plight less urgent than that of the disabled? If it is acknowledged that a sub-minimum wage keeps those who cannot perform at a level worth the minimum wage in the work force, why limit that rationale to the genetically disadvantaged?

But the opponents of killing the sub-minimum wage rely on the worst possible arguments to support keeping it. Here’s the “Dissenting Statement and Rebuttal of Commissioner Gail L. Heriot in Report of the U.S. Commission on Civil Rights: Subminimum Wages: Impact on the Civil Rights of People with Disabilities. (September 17, 2020).” Heriot, one of the few conservatives on the Commission, writes,

Section 14(c) was adopted in 1938 at the same time as the first federal
minimum wage. Back then it was believedno doubt correctlythat a federal  minimum wage would cause many disabled persons to become unemployable. An exception was thus created.

(There is also a time-limited exception for youth employment.)

Why wasn’t it also believed that the same principle would apply to every other individual, handicapped or not, who was unable to perform a job worth the minimum wage? Isn’t the assumption that Down Syndrome sufferers are less employable than than the ordinary lazy, poorly educated, unmotivated and none-too-bright American low-skilled worker simple bigotry? My experience with Down Syndrome workers is that they are often better at their jobs than their non-Down peers—harder working, more polite, more reliable. If a sub-minimum wage makes sense, then a minimum wage makes no sense.Heriot later defaults to a “mothers know best” argument, which distorts the issue. She writes,

[I]t is shocking to me that the report waits till page 99 (by which time
nearly all Members of Congress have stopped reading) to mention that 98 per  cent of the members of the public who submitted comments to the
Commission support the continuation of Section 14(c).  In my thirteen years on the Commission we’ve never received anything like  the number of comments we got with this report9,700. Indeed, the report admits
that this is the highest number the Commission has ever received. Of them, the  overwhelming majority were from parents or other close family members. Almost  all of them disagreedoften vehementlywith the Commission’s conclusion on  what is best for their child.

If it’s best for their child, why isn’t a lower minimum wage also best for all other virtually unemployable Americans, who once could be movie ushers, elevator operators, and bathroom attendants? More Heriot:

It is elementary economics that if the price of something is increased, the
quantity demanded will tend to decrease. Labor is no exception. This is
particularly true for unskilled labor. Modern history has been unkind to unskilled  workers. Where restaurants used to need armies of dishwashers, now they need  only a few to operate their highly efficient dishwashing machines. Where fast food  outlets used to need many cashiers, now they get by without them and take orders  with tablets. It doesn’t take a labor economist to tell you that the demand for unskilled labor of Down syndrome adults is not infinitely inelastic. If the price goes  up, the number of jobs will go down.

[I would add to that observation that most stores now simply get by with skeleton staffs, to the inconvenience of customers.]

But where is the integrity or consistency in making this argument to support a sub-minimum wage while simultaneously rejecting it regarding the minimum wage policies applicable to everyone else?

There isn’t any. It is just one more marker of the incompetence and poor thinking skills of those who presume to govern us.

7 thoughts on “The “Sub-Minimum Wage” Debate

  1. Most “developmentally disabled” workers who are not in the general workforce work in sheltered workshops. These workshops are usually funded by governmental agencies, though a few are funded by private donations. Thus, they are working with a limited budget to further their goals. Those goals have little or nothing to do with productivity or product quality, but rather with fostering an attitude of self-pride, and heightened sense of self-worth and self-esteem. They are, therefore, considered therapeutic rather than employment. Almost none of them could afford to pay their clients the current minimum wage, which would close them down, depriving their clients of these much-needed services.

    • DD
      You might want to evaluate Horizon Goodwill’s executive pay relative to staff and worker pay. It is obscene. Many of these organizations contract with state and local governments to perform services such a janitorial work or grounds maintenance at government facilities. The dollar value of these contracts are upwards of seven figures with the lions share going to management. The days of the sheltered workshop are long gone in Maryland.

      • If you’ll re-read my comment5, you’ll note thaT i DID DRAW A DISTINCXTION BETWEEN GOVERNMENT-FUNDED AND PRIVATE CORPS. GOODWILL IS A PRIVATELY OWNED NOT-FOR-POROFIT AND PROBABLY WOULD NOT GO OUT OF BUSINESS EVEWN WITH THE MINIMUM WAGE, BUT THE NUMBER OF CLIENTS THEY SERVE WOULD BE DRASTIUCALLY REDUCED. Sorry for the caps…I was watching thwe keyboard and not the screen.

  2. If something is “infinitely inelastic” it means that price of the commodity can rise with no change in quantity demanded. The writer must have done poorly in first year Microeconomics. Price Elasticity refers to the degree of responsiveness to changes in price of that good. The more elastic a good is the more sensitive and responsive to any price change. Open heart surgical procedures are nearly infinitely inelastic.

  3. My mistake the writer said Not infinitely inelastic. Well no shit, nothing is infinitely inelastic.
    This statement is no less true than for any other occupation or commodity.

    If the writer wanted to make a substantive statement regarding the marginal revenue product of Down’s syndrome workers relative to other workers he needed to demonstrate comparative rates of marginal revenue to marginal cost. Instead he simply stated what is true for ALL workers, skilled and unskilled.

    Marginal revenue product determines labor demand so paying a Down’s syndrome more does not automatically render them more costly than other options. If a Down’s syndrome worker during a time and motion study can make 20 widgets an hour with a efficiency rate of 80% in actual production and a non- developmentally disabled worker produces 30 units an hour in that study but only at an efficiency rate of 50% in actual production because he or she spends a lot of time malingering the latter will be more costly than the former.

  4. The military will not induct anyone into the armed forces with an ASVAB score less than the 14th percentile ( an IQ of a little over 83). They spent a lot of money studying this and found that people with such a low IQ are not capable of being productive in any role at all in the military. When you include their supervision, their overall contribution is negative. You can read an account of this in “McNamera’s Folly”. If you are paying attention, that means that 14% of the population is not capable of doing any productive work. This is perhaps relevant to criminal justice reform.

    So yes, these programs are not really ‘jobs’ in the sense that their work is profitable, but self-esteem boosting exercises, therapy, and perhaps educational.

    • My father’s foot was blown apart in WWII when a member of his platoon, a soldier that my father estimated at an IQ of about 70, tried to use the pin of a live grenade to dig mud out of his boot. Dad said that the standards for draftees kept being lowered a the war went on, and viewed it as a terrible decision.

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