Georgia Governor Brian Kemp signed Senate Bill 55 into law recently which would begin to phase out a program that allowed companies to pay disabled individuals less than the minimum wage. By 2027, companies will be prohibited from paying these workers subminimum wages. The bill had near unanimous bipartisan support except for some clearly-demented state legislators that have some obvious hatred of disabled people, right?
Not exactly.
First, stop looking at the minimum wage as a regulation on companies. Instead, look at it as a prohibition on contracting labor on the employee. The employee cannot sell his service to the employer unless the contract meets certain requirements. Well, if the employee is going to have to sell themselves as much as their non-disabled colleagues, then they have to produce as much. Otherwise, the marginal utility of hiring the disabled colleague taken with the marginal cost says it’s much better to just hire someone that isn’t disabled.
This is difficult to do for disabled individuals. They are, as the name says, disabled in some aspects which will limit their ability to work and produce. This doesn’t mean that they’re incompetent or unable to produce, it just means that they can’t produce at the same speed or efficiency as would a non-disabled person. Holding them to the same pay and standard as someone that is not disabled, like this newly-enacted law requires, is cruel. Ask any able-bodied person that has worked a fast-food job, it’s hard even with no disabilities.
Now what about those that are disabled who, sometimes, need an able-bodied person alongside them to complete certain tasks. It’s difficult to ask them to now put in the same work as someone who doesn’t need guidance from another person to complete work.
In the age of automation, the minimum wage is an especially bad policy when it comes to low-skilled workers. In 2023, a U.S. Congressional Budget Office report said that employers will likely “respond to a higher minimum wage by shifting their means of production toward using more machines and technology and reducing their employment of low-wage workers.” If that holds true for able-bodied individuals, it is even more so for disabled individuals who rely on lower wages to even find employment. Their replacements don’t come as machines; they come as able-bodied people.
