Biden Administration Proposes End to Subminimum Wage for Disabled Workers

Last updated Dec 30, 2024

Impact of Proposed Minimum Wage Hike for Disabled Workers and Businesses

Introduction

Recent moves by the Biden administration propose to end subminimum wage for disabled workers. This action could potentially improve earning capacity for disabled workers which is likely to have a ripple effect on businesses and communities.

Implications of Higher Minimum Wage for Disabled Workers

The national minimum wage currently stands at $7.25 per hour, but certain disabled workers earn less due to a Depression-era program. This program allows the government to issue certificates to businesses, enabling them to pay disabled workers less. The proposed change could affect more than 37,000 disabled laborers across 37 states.

Boosting Local Economies

Increased earning power for disabled workers is not just beneficial for individual workers but also for local businesses, according to Alex Freeburg, a personal injury and criminal defense lawyer. With higher wages, disabled workers will likely have more discretionary income, thereby stimulating local economies. So, how does this higher minimum wage proposal impact different sectors?

Effects on Social Security

One potential benefit of increasing wages for disabled workers is reduced strain on social security programs, primarily funded by employer and employee payroll taxes. With higher wages, disabled individuals could contribute more to taxes instead of relying on government support programs. This could free up funds for those who need them the most and support a more sustainable system.

Impact on Businesses

Eliminating subminimum wage may also affect businesses. Some argue that small businesses may struggle to operate without employing individuals earning a subminimum wage. However, others claim providing adequate training and fair treatment for disabled workers can contribute to business growth.

Uncertain Future

The future of this proposal remains uncertain, as the new rule would only take effect near the end of the current presidential term. The Trump administration could decide to either scrap or implement the proposal. Regardless of the outcome, it’s crucial to consider how such changes could affect disabled workers and the wider economy.