Why Do Pay Gaps Persist for US Workers With Disabilities?

As the ADA approaches its 30th anniversary, we are taking a close look at employment issues affecting workers with disabilities. Stay tuned for related stories on recruiting, accommodations and more.

The Americans with Disabilities Act (ADA prohibits a covered entity from discriminating against a qualified individual on the basis of disability in regard to employee compensation or other terms, conditions and privileges of employment. Yet some researchers have found that, 30 years after the law’s passage, pay gaps persist for indiviudals with disabilities.

For example, a 2014 report by researchers at the American Institutes for Research (AIR), a nonprofit and nonpartisan organization, found that an earnings gap exists between people with disabilities and people without, and that gap widens as education attainment increases. Researchers also found that, in the working-age population of the U.S., people with disabilities were paid nearly 37% less than people without, even after controlling for labor supply and certain demographic and labor market characteristics.

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Furthermore, the cost of living for individuals with disabilities often includes additional expenditures in areas including healthcare, personal services, accommodations in the home and transportation, the AIR researchers said in their analysis of the data, meaning that lower earnings present “an even greater challenge” for this cohort.

More recent research provides similar insight. A 2019 report by the U.S. Census Bureau, which analyzed 2017 data from the U.S. Bureau of Labor Statistics, found that full-time, year-round U.S. workers with disabilities earned 87 cents for every dollar earned by those without disabilities. The gap widened even further when including all workers, regardless of work schedule or occupation, to 66 cents for every dollar.

However, the authors of the Census Bureau report also found that among people with similar jobs and work schedules, the median earnings for workers with disabilities were either very close to that of their counterparts with no disabilities, or they were the same. “In fact, accounting for the differential mix of occupations between these workers with or without a disability reduces the overall disparity in median earnings by about half,” the authors said.

Occupations that were exceptions to this observation and that had “notable differences” in median earnings between workers with and without disabilities included chief executives, lawyers, marketing and sales managers and financial analysts, per the Census Bureau report.

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“Age may play an important role in masking some earnings differences between workers with a disability and those without,” the Census Bureau authors noted, as for most occupations, the “average age difference tends to inflate the overall median earnings of workers with a disability relative to those with no disability.” Additionally, workers with disabilities are less likely to earn a full-time wage, and across all occupations, workers with disabilities are less likely to work full-time, year-round.

Additionally, the Fair Labor Standards Act authorizes certain employers, after receiving certification from the U.S. Department of Labor (DOL), to pay subminimum wages to people with disabilities. According to the agency’s fact sheet on this provision, a worker who has disabilities for the job being performed, “is one whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury.” The fact that a worker may have a disability is not in and of itself sufficient to warrant payment of a subminimum wage, per DOL.

The type of disability that a worker has may also play a role. People with significant disabilities have trouble getting employed, and often when they get employed, they are what we call underemployed. That is, they are not employed at the level that their talent and ability should actually place them at … and because they often have trouble getting jobs, that is why they are taking jobs that are lower paid even though they’re overqualified in a sense.

Where does the ADA fit into the conversation?

Back to the ADA: the law provides that covered employers may not discriminate on the basis of disability. But the law doesn’t necessarily solve the issue of pay gaps on its own, and this is partly due to the obligation it places on employers.

There’s no affirmative obligation on employers, under the ADA, to really seek out and hire and promote people with disabilities. The ADA is a very important law that has made huge differences in this country, and it is not the end-all and be-all because it does not place an affirmative obligation on employers to reach out to hire and promote people with disabilities as some other laws do.

Specifically, Sections 501 and 503 of the Rehabilitation Act of 1973, a law that “prohibits discrimination on the basis of disability in programs conducted by Federal agencies, in programs receiving Federal financial assistance, in Federal employment, and in the employment practices of Federal contractors,” according to a U.S. Department of Justice webpage.

Section 503 provides that: “Any contract in excess of $10,000 entered into by any Federal department or agency for the procurement of personal property and nonpersonal services (including construction) for the United States shall contain a provision requiring that the party contracting with the United States shall take affirmative action to employ and advance in employment qualified individuals with disabilities.”

Federal contractors have an affirmative obligation both to seek out and hire people with disabilities under these provisions, whereas the ADA does not provide such an affirmative obligation. It’s just the negative obligation: you cannot discriminate.

In their data analysis, the authors of the AIR report noted that despite the enactment of laws like the Rehabilitation Act and the ADA, “the results of this study show that earnings inequalities widen as educational attainment increases between people with and without disabilities in almost every state.” The report added that federal and state legislators may need to consider additional policies and practices that support equal pay for people with a disability. “Additionally, perceived stigma of people with disabilities in the workplace may also affect performance evaluations, which affect earnings over time,” the authors said.

Looking at the two reports, the definition of “disability” used in such reports is a much, much smaller, much, much tighter definition than that used by the ADA. But that’s fine, because the people who are experiencing these problems are the ones who have the more manifest disabilities. The ADA will say that someone with a manifest disability cannot be discriminated against. But when you’re thinking about promoting someone, all that means is you can’t take that disability into account as a negative reason.

Unfortunately, disability bias and stereotypes persist despite the ADA’s protections, and this can affect whether employers view someone with a disability as capable of taking on a higher-level job.

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