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Economics and People with Disabilities

The American economy is growing, according to the most recent statistics, at the sizzling rate of seven percent, and is in the middle of the largest peacetime expansion in American history. We read in the newspapers that practically everyone who wants a job can get one. Microsoft is running advertisements in the New York Times practically begging Congress to issue more visas for foreign computer and information technology workers.

In this environment, it is shocking that one group of Americans, people with disabilities, have such a high level of unemployment: 30 percent are not employed -- the same percentage as when the Americans With Disabilities Act became law. Recent research has confirmed that the economic expansion of the 1990s has significantly boosted the incomes of most working-age men and women without disabilities. But men and women with disabilities have been left behind, and did not share in the economic growth of the 1990s. Not only did their employment and labor earnings fall during the recession of the early 1990s, but employment and earnings continued to fall during the long economic expansion that followed. Many of these people are skilled professionals who are highly marketable in today's economy.

Part of the problem is discrimination, and part recent court rulings favoring employers in ADA lawsuits. Discrimination against people with disabilities is, unfortunately, alive and well, despite the legal prohibitions against discrimination in hiring people with disabilities. Seventy-nine percent of disabled people who are unemployed cite discrimination in the workplace and lack of transportation as major factors that prevent them from working. Studies have also shown that people with disabilities who find jobs earn less than their co-workers, and are less likely to be promoted.

Unfavorable court rulings have not been helpful, either. Research by law professor Ruth Colker of Ohio State University has shown that in the eight years after the ADA went into effect, employer-defendants prevailed in more than 93 percent of the cases decided by trial. Of the cases appealed, employers prevailed 84 percent of the time. Robert Burgdorf, Jr., who helped draft the ADA, has written, "legal analysis has proceeded quite a way down the wrong road." Disability activists and other legal scholars point out that Congress intended the ADA as a national mandate for the ending of discrimination against people with disabilities. Instead, what has occurred, in the words of one writer, is that the courts "have narrowed the scope of the law, redefined 'disability,' raised the price of access to justice and generally deemed disability discrimination as not worthy of serious remedy."

But perhaps the greatest single problem is the federal government itself, where laws and regulations designed to help disabled people actually provide an economic disincentive to work. As Sen. Edward Kennedy wrote, "the high unemployment rate among people receiving federal disability benefits is not because their federal benefits programs have 'front doors that are too big - i.e., have eligibility criteria that are too loose - but because they have 'back doors that are too small' - i.e., once persons are on the rolls, it is too risky to come off."

The Congress did pass the Work Incentives Improvement Act at the end of 1999, which will make it easier for some people with disabilities to continue to receive health insurance coverage once they go to work. Unfortunately, the law is limited and not likely to eliminate the problem.

The following papers are available for downloading from the Rehabilitation Research and Training Center for Economic Research on Employment Policy for Persons with Disabilities at Cornell University:

Framing the Issues: Economic Research on Employment Policy for People With Disabilities by Michael E. Fishman

How Policy Variables Influence the Timing of Social Security Disability Insurance Applications by Richard V. Burkhauser, J.S. Butler, and Robert R. Weathers II

How Working Age People With Disabilities Fared Over the 1990's Business Cycle by Richard V. Burkhauser, Mary C. Daly, and Andrew J. Houtenville

Review of Data Sources for School to Work Transitions by Youths with Disabilities by David C. Wittenburg and David C. Stapleton

Transitions from AFDC to SSI Prior to Welfare Reform by The Lewin Group (David C. Wittenburg, David C. Stapleton, Michael E. Fishman, Gina A. Livermore) ΚΚ Policy Brief

Will Expanding Health Care Coverage For People With Disabilities Increase Their Employment and Earnings? Evidence From An Analysis of the SSI Work Incentive Program by David C. Stapleton, Ph.D. and Adam F.Tucker

ECONOMICS OF DISABILITY RESEARCH REPORT #1: Estimates of the Prevalence of Disability in the United States by State, 1981 through 1999. Prepared by Andrew Houtenville

ECONOMICS OF DISABILITY RESEARCH REPORT #2: Estimates of Employment Rates for Persons with Disabilities in the United States by State, 1980 through 1998. Prepared by Andrew Houtenville

ECONOMICS OF DISABILITY RESEARCH REPORT #3: Estimates of Median Household Size-Adjusted Income for Persons with Disabilities in the United States by State, 1980 through 1998. Prepared by Andrew Houtenville








Peter David Blanck, Director
Law, Health Policy, and Disability Center
University of Iowa. (319) 335-9043

Andrew J. Houtenville, Ph.D. Director,
Program on Employment and Disability
School of Industrial & Labor Relations
Cornell University
(607) 255-5702

Tom Seekins, Director
The Rural Institute's Research &Training Center at the University of Montana
Dr. Tom Seekins served as Associate Director of Research for the Rural Institute on Disabilities at The University of Montana since 1988 and as the Director of its Research and Training Center since 1993. He is particularly interested in issues of rural community development, consumer empowerment, and health promotion for people with disabilities.



The following sites contain information that may be of interest. Please bear in mind that the information at these sites is not controlled by the Center for An Accessible society. Links to these sites do not imply that the Center supports either the organizations or the views presented.


"Rethinking the Social Security policy wasteland," by Marta Russell, from the January, 2001 issue of Ragged Edge magazine.

"The Work Incentives Improvement Act: A Primer" by Leye Leye Jeannette Chrzanowski of The Disability News Service, Inc.



Read the EEOC's Primer for Small Business on complying with the employment provisions of the Americans with Disabilities Act




Expert sources

Labor Day and People with Disabilities

Disabled People Start Own Businesses: Study

The case against sheltered workshops

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