A recent plan sponsored by Rep. Cliff Stearns, R-Fla., to impose minimum wage laws on disabled workers is bad news for some with disabilities.
It's a simple law of economics. All else being equal, increasing the minimum wage increases unemployment.
According to The Wall Street Journal, a study by economists William Even and David Macpherson "finds that among white males ages 16-24, each 10-percent increase in a federal or state minimum wage has decreased employment by 2.5 percent. For Hispanic males, the figure is 1.2 percent. But among black males in this group, each 10-percent increase in the minimum wage has decreased employment by 6.5 percent."
These age groups are disproportionally affected by increases in the minimum wage due to the fact that they are more likely to have part-time jobs, which often pay at or slightly above the minimum wage.
Five states (California, Illinois, Nevada, Oregon and Washington) have some of the highest minimum wages in the country but also face unemployment rates well above the national average.
Of course, correlation does not imply causation, but from a logical standpoint, it makes sense.
If the government wants to help shoe producers, it wouldn't mandate that shoe producers increase the price of shoes.
This is a silly notion because the price of shoes is determined by the equilibrium between supply (the quantity of shoes supplied and the price that shoe producers wish to sell) and demand (the quantity of shoes demanded with the price the consumers wish to pay for shoes.)
Yet somehow, the government believes that in order to help laborers, it can defy this economic rule. Supply and demand for labor works the same way it does for shoes. Instead, in this instance, the labor offered is the supply and the price is a wage.
Increasing the minimum wage increases the "price" of labor and results in a surplus labor supply because businesses adjust their hiring habits accordingly. Either they stop hiring altogether or cut some low-productivity workers to make up for the increase in labor costs.
While Rep. Stearns sounds well-intentioned with this policy, higher unemployment among workers with disabilities could be an unintended consequence like the problems facing younger workers.
For workers with disabilities making less than minimum wage, employers faced with tight budgets could decide to eliminate these jobs altogether.
This will not affect everyone, as many of these workers make more than the minimum wage. But those who currently make below the minimum could go from having a low income to no income.
Which is worse?
