In These Times on the Subminimum Wage

See this interesting article, which begins:

In his State of the Union address earlier this year, President Barack Obama called for increasing the minimum wage from $7.25 an hour to $9 an hour. On Tuesday, Congressional Democrats did him one better, unveiling a plan to raise the minimum wage to $10.10 an hour, as well as raise the subminimum wage for tipped workers from $2.13 an hour to 70 percent of the minimum wage. 

Their proposal, however, would not cover the 420,000 Americans with disabilities who are currently paid a subminimum wage of as little as a few cents per hour in some state-sponsored "sheltered workshops," such as Goodwill. These programs, licensed under provision 14c of the Fair Labor Standards Act of 1938, are intended to be for training, but many workers wind up as perpetual “trainees,” employed in sheltered workshops for years earning subminimium wage rates; thus becoming stuck in a cycle of poverty. While advocates have repeatedly tried to address this issue divides within both the Democratic Party and the disability community have so far prevented these laws from being sensibly revised.

National Council on Disability Calls for Phaseout of Subminimum Wage

Big news.  See this report that the NCD transmitted to the President today.  Here are the report's key findings, as summarized in the introduction:

Sheltered workshops are ineffective at transitioning individuals with disabilities to integrated employment. According to the 2001 investigation by the Government Accountability Office into the 14(c) program, only approximately 5% of sheltered workshops employees left to take a job in the community.[ii] 

According to the Centers for Medicare and Medicaid Services, Medicaid-financed pre-vocational services to sheltered workshops are, “not an end point, but a time limited (although no specific limit is given) service for the purpose of helping someone obtain competitive employment.”[iii] 

Individuals in supported employment who had previously been served in sheltered workshop settings do not show a higher rate of employment as compared to those who had gone straight to supported employment without ever being in a sheltered workshop.[iv] However, research indicates that those who had previously been in sheltered workshops had higher support costs and lower wages than comparable individuals who had never been in sheltered workshop settings.[v] 

The 14(c) sub-minimum wage program is utilized primarily by non-profit or state-operated social services providers – specifically, sheltered workshops – rather than private, for-profit businesses. According to the GAO, 95% of all workers with disabilities being paid less than minimum wage under the 14(c) program were employed by sheltered workshops.[vi] 

Research indicates that employees receiving supported employment services generate lower cumulative costs than employees receiving sheltered workshop services and that whereas the cost-trend of supported employees shifts downward over time, the opposite is the case for individuals receiving sheltered workshop services.[vii]

Federal Legislators Push to Pay Disabled Workers Minimum Wage

See this article by that title.