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Project 7. Expanding Employee Wages: Impact of minimum and sub-minimum wages

  • Employees with disabilities are paid less on average than those without disabilities, both before and after controlling for other personal and job characteristics (Kruse et al. 2018). As low-paid workers it is highly likely that they are more likely to be paid at or close to the minimum wage, although we do not have firm figures on this.
  • Increases in the legislated minimum wage are therefore likely to have especially strong effects on workers with disabilities, whether those effects are negative (decreasing employment levels) or positive (increasing pay and income levels).
  • Given the number of states that have set a minimum wage above the federal rate, plus the current national debate over whether to increase the federal minimum wage, there is a need to understand the effects on workers with disabilities.
  • In addition, there is substantial controversy in the disability community over the subminimum wage for certain workers with disabilities that is authorized by section 14(c) of the Fair Labor Standards Act. Several states have phased out Medicaid payments to employers paying these subminimum wages. Given this policy controversy and these state efforts, there is a need to understand the effects of subminimum wages on the employment and incomes of workers with disabilities.
  • Following recent literature analyzing the effects of minimum wages using a quasi-experimental framework, we will do pre/post comparisons of employment outcomes of people with disabilities as state-level minimum wages are increased, compared to otherwise-similar states that have not increased their minimum wage at the same time.