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...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.
Background
The first federal minimum wage law was part of the Fair Labor Standards Act (FLSA) of 1938. Congress claimed constitutional authority for the enactment of federal minimum wage laws could be found in the Commerce Clause of the U.S. Constitution. In the 1938 Act, the minimum wage was set at 25 cents an hour and applied to approximately 11 million out of 54.9 million American workers. There have been 25 subsequent increases in the minimum wage as well as increases in the number of workers covered under the FLSA.
Since 1997, with a national minimum wages of $5.15 per hour, most employees have been covered. In 2004, there are 11 states with state minimum wage laws set higher than the federal minimum wage and two states, Ohio and Kansas continue to have state minimum wages set lower than the federal minimum wage. Seven states have no minimum wage laws at all. In states where the state minimum wage is set lower than the federal minimum wage, the state minimum wage applies only to employees who are not covered by the FLSA. In states with state minimum wages higher than the federal minimum wage, the state wage prevails.
The high unemployment rate for people with disabilities, 13.4%, is more than double the 5.6% unemployment rate for people without disabilities (LaPlante, Kennedy, Kaye, & Wenger, 1996). The question then becomes whether the minimum wage has a different impact on individuals with disabilities than on individuals without disabilities. If increases in the minimum wage are associated with greater reduction in the employment of individuals with disabilities compared to individuals without disabilities, minimum-wage legislation may then have the unintended consequence of being another limit on the employment opportunities for individuals with disabilities.
According to Valletta (1996), most economists agree that when minimum wages were raised by 10%, employment among low-skilled groups, such as teenagers, declined by 1% to 3%. However, teenagers are not the only group of workers who are paid at the minimum-wage level. Peterson (1981) demonstrated that...
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