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Hillary Clinton wants to end the loophole that lets disabled workers earn less than minimum wage

Hillary Clinton Holds Campaign Event At New York City's Apollo Theater Spencer Platt/Getty Images

This Monday, Hillary Clinton proposed something no major presidential candidate ever had before: paying all disabled workers the minimum wage.

At a campaign event in Madison, Wisconsin, Clinton was asked by Nikki Vander Meulen, an autistic attorney, about her position on Section 14(c), a loophole in the federal minimum wage that allows employers to gain an exemption from the minimum for workers with disabilities. Most Americans don’t even know this loophole exists, but it has been leaving disabled workers to toil in poverty for decades, and disability rights advocates like myself have made repeal a major priority for years.

Clinton pledged to close it:

When it comes to jobs, we've got to figure out how we get the minimum wage up and include people with disabilities in the minimum wage. There should not be a tiered wage, and right now there is a tiered wage when it comes to facilities that do provide opportunities but not at a self-sufficient wage that enables people to gain a degree of independence as far as they can go. So I want us to take a hard look at raising the minimum wage and ending the tiered minimum wages, whether it's for people with disabilities or the tipped wage. … When people talk about raising the minimum wage, they don't always talk about the legal loopholes that we have in it and I want to get rid of those and I want to get rid of that for people with disabilities too.

Not every disabled person is subjected to this lower minimum wage. Only employers with special Section 14(c) certificates can underpay, and there are millions of disabled people in non-14(c) workplaces or not working. But the policy still has a major impact. Section 14(c) is currently responsible for the underpayment of 228,600 people at 2,820 employers across the country. By calling for its abolition, Clinton is bringing much-needed attention to a hole in the safety net that is long past due for a fix.

The origins of the disabled worker exemption

Section 14(c) dates back to the 1938 Fair Labor Standards Act, which first established a federal minimum wage. The original version included a provision allowing employers to pay less than the federal minimum wage to workers whose disability might impact their employment prospects. But there was still some minimum; it was just set as a percentage of the regular minimum wage.

Then in 1986, an amendment to Section 14(c) eliminated the minimum wage for applicable workers altogether.

Effectively, employers with 14(c) certificates can pay workers whatever they want. In practice, they use one of two methods: "piece rates" or "time studies." Under a piece rate system, an employee might be paid based on the number of units of a particular product they are able to produce or process. Under a time study, employers time a non-disabled worker performing work-related tasks, then compare the productivity of a worker with a disability to the time spent by a non-disabled worker performing similar tasks.

Both of these systems are designed primarily for manufacturing or production-line jobs, and often lead to somewhat arbitrary results in the more fluid, services-based economy we live in today.

While 14(c) was originally conceptualized as something that would be used by both private employers and nonprofit organizations alike, today the overwhelming majority of 14(c) certificate holders are nonprofit centers that predominantly or exclusively hire people with disabilities. These centers are typically referred to as "sheltered workshops," and they usually receive funding through both contracts with industry and payments from state Medicaid agencies in order to provide employment services to their workers.

The "sheltered workshop" model has failed

A Goodwill store
Goodwill Industries relies heavily on sheltered workshops.
Education Images/UIG via Getty Images

Sheltered workshops don’t work. As part of the preconditions of receiving Medicaid funding, they’re nominally required to present their services as pre-employment training, preparing disabled workers for eventual jobs in the general workforce. But few workers ever make that transition. The Government Accountability Office has estimated that only about 5 percent of workers leave sheltered workshops for employment in the community.

Furthermore, studies comparing workers with intellectual disabilities who pass through workshops on their way to competitive employment with similar workers who go straight to competitive employment have found that time spent in a workshop is correlated with worse outcomes, lower pay, and higher costs of service. This research has also been replicated for autistic workers.

Then there’s the underlying inequity of not giving workers with disabilities the same minimum wage protections as workers without. Many workers in sheltered workshops are deriving little to no economic benefit from their employment — for example, NBC News's investigation of Goodwill Industries found that employees in their Pennsylvania sheltered workshops were being paid wages as low as 22, 38, and 41 cents an hour.

Workshops can also serve to isolate people with disabilities from the general population. While community employment typically involves interaction with non-disabled co-workers and customers, employment in a workshop affords few opportunities for broader community interaction. In a world in which employment advancement and skills development is as likely to come from co-worker interactions as it is from formal training programs, isolating workers with disabilities in separate workplaces is particularly concerning.

The dual-role sheltered workshops serve, as both employer and service provider, also creates problems. It often leads to conflicts of interest, as a workshop has little interest in assisting its workers in negotiating for better pay or working conditions. The low rate of transition from workshop environments to the integrated workforce can be attributed in part to the desire of workshops to retain their most productive employees.

Another strategy is possible

Activist Protest Cuts To Long Term Health Care
Disability rights activists demonstrate in favor of community-based services in 2010.
Chip Somodevilla/Getty Images

The good news is that sheltered workshops are on the way out. In the past year, both New Hampshire and Maryland have passed laws phasing out the use of sub-minimum wage over the next several years.

Recently, the Department of Justice Civil Rights Division has begun to sign settlement agreements with states requiring them to shift funding away from workshops and into supports in integrated employment settings instead. These lawsuits typically rely on the 1999 Supreme Court decision Olmstead v. L.C., which found that the Americans with Disabilities Act requires states to offer services in the community instead of only in segregated environments.

Olmstead has been used to great effect to get states to move people out of institutions and nursing homes and expand in-home support that keeps people in the neighborhoods and communities they grew up in. There’s a growing body of evidence suggesting that the benefits of community employment may be similar to the benefits of community-based support services (as opposed to institutionalization).

In place of sheltered workshops, advocates and the federal government have been pushing states to adopt a model called supported employment. Supported employment brings services like job coaching and other employment supports to a worker employed in workplaces that also hire people without disabilities — a situation known as "community employment."

Instead of determining where someone will work based on her diagnosis, supported employment systems enlist job coaches to help people with disabilities find jobs consistent with their skills and interests, exposing them to multiple potential workplaces. For people with severe disabilities, this is often followed by a process known as customized employment, where an employment support specialist will work with supervisors to craft a job description that matches the skills of the prospective employee to the businesses' needs.

When surveyed, the majority of disabled workers and a smaller majority of family members report a preference for supported employment over sheltered workshops. Despite that, progress has been slow, with only about a fifth of people with developmental disabilities in the service system receiving supported employment services.

Vermont became the first state to eliminate sheltered workshops in 2003, and has since acquired a reputation for high levels of integration in its developmental disability services. Because of the Department of Justice’s litigation, Rhode Island and Oregon have also been required to drastically increase their supported employment service funding and begin to shift people out of sheltered workshops and into community employment.

To realize the benefits of community employment (and in order to avoid having to do so under court order), other states are now following their lead. Massachusetts and New York, among others, have begun processes to phase out sheltered workshops over time while increasing supported employment services during that phase-out period.

This is a positive trend, but it comes with a number of real risks and anxieties and significant obstacles along the way. Many providers have lobbied aggressively against these moves, fearing that the loss of sheltered workshops and sub-minimum wage will threaten their well-established business models. While many family members are strong supporters of these changes, others oppose them and fear that the move toward integrated employment will leave people with the most significant disabilities behind. That makes maintaining momentum toward subsidized employment, and away from sheltered workshops, crucial.

Addressing these concerns requires careful policymaking. States need to carefully set Medicaid payment rates to employment service providers to make sure they’re willing to serve those with the most complex needs. Families also need to be reassured that services will continue to their loved one with a disability — especially for the many parents who use sheltered workshop placement as a tool to give their child something to do during the day other than sit at home. Clear communication about the availability of supported employment services, along with inclusive day and respite opportunities for those who don’t find work, can help mitigate opposition to these changes.

It’s a huge deal for a presidential candidate to speak on disability policy

Hillary Clinton Campaigns In Madison, Wisconsin
Clinton in Madison, Wisconsin.
Scott Olson/Getty Images

Historically, politicians have limited their forays into disability policy, usually not seeing the disability community as a sufficiently organized voting bloc to be worth making promises to. When they did so, it would usually be on the areas of greatest consensus between the different wings of the disability movement, like increased service funding across the board. Section 14(c) doesn’t fall into that category. The sheltered workshop industry, led by groups like Goodwill Industries, are still quite vocal in their opposition to ending 14(c).

Hillary Clinton’s remarks on sub-minimum wage are notable because she’s taking a bold position on a topic that has a history of controversy. One implication is that the tide may be turning on 14(c) and sheltered workshops. As advocates gain ground, many provider associations have come to the table and begun working constructively on how to responsibly phase out sub-minimum wage and workshops, instead of trying to preserve the status quo.

And while Clinton is the first to specifically call for phasing out sub-minimum wage for people with disabilities, she isn’t the first to call for moving away from sheltered workshops. In the GOP race, John Kasich has talked on the campaign trail on the need to move away from workshops, citing his work promoting that transition as governor of Ohio.

There may also be a bigger takeaway though. The willingness of politicians to speak out against sub-minimum wage implies that the progressive disability movement is growing stronger across the board. As Vox’s Dylan Matthews pointed out in his analysis of Clinton’s autism plan, many of the recommendations included within it are aligned with the lobbying goals of autistic adults and other more progressive stakeholders in the autism world, who have long been encouraging a focus on services, instead of the singular focus on cure and causation that’s usually driven conversations around autism.

It’s hard to imagine a politician in the 2008 or 2012 election cycle making these kinds of promises. As many have pointed out, both Clinton and Barack Obama were much more focused on causation theories (including discredited ones) in the 2008 Democratic primary. The evolution of political discourse on autism, sub-minimum wage, and other disability issues implies a broader shift in the balance of power in the disability community.

Clinton’s remarks are promising for advocates like me who work to promote integrated employment — but they may also signal a realignment in disability politics, with progressive advocates having much greater influence than ever before. As Clinton's questioner Vander Meulen — who helped draft Wisconsin’s law prohibiting the inappropriate use of restraint on schoolchildren and maintains a private practice in Madison — explained, "Hillary Clinton's answer to my question was exactly the answer I had hoped to hear. Any and all Presidential candidates need to understand that the issue of sub-minimum wage is not a political issue but a human rights issue."

Ari Ne’eman is the president of the Autistic Self Advocacy Network and served as one of President Obama’s appointees to the National Council on Disability from 2010 to 2015. He currently serves as a member of the Department of Labor Advisory Committee on Increasing Competitive Integrated Employment for Individuals With Disabilities.

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