Minimum wage rates and employment of individuals with disabilities.

The minimum wage touches upon economic, political, sociological, psychological, and legal issues. The inherent interest of economists in the minimum wage is centered upon the classic query of cost-benefit; that is, does the benefit derived from the production of a particular employee justify the additional cost to the employer of the higher wage that an employee will be paid after an increase in the minimum wage (Brown, Gilroy, & Kohen, 1982)? Politically, fiscal liberals have historically been in favor of larger increases to the minimum wage while fiscal conservatives have opposed them (Levin-Waldman, 2001). Sociologically, the minimum wage has been considered a welfare program with the goal of improving the income of the lowest paid workers, workers who tend to be from disadvantaged groups such as minorities (Chaplin, 2003). Social psychologists have pointed to motivation theories when studying the effects of the minimum wage on welfare recipients (Page, Spetz, & Millar, 2002). The legal issues in minimum wage laws range from the power of the state to enact a minimum wage law and to the question of constitutionality of the federal minimum wage laws (Levin-Walden, 2001).

The emphasis on increases to the minimum wage as a means of social welfare rests on the assumption that minimum wage employees are dependent on such government policies in order to obtain a wage increase (Even & Macpherson, 2004). The apparent paradox in wage mandates is that the government tells employers what to pay, but not who to hire. If an increase in the minimum wage results in fewer opportunities for employment for a particular group of people, the increase leads to application of the law of unintended consequences.

The term unintended consequences refers to the "detrimental, unintended consequences of actions undertaken for what are intended to be noble purposes" (Shaffer, 2003, 5). The ability to predict outcomes is dependent upon awareness of all variables that could influence an event. With complex systems, however, complete knowledge of all such variables is always unobtainable. This means there will always be a discrepancy between that which is planned for and that which actually results.

Three of the most significant pieces of legislation affecting individuals with disabilities are thought to have succumbed to the law of unintended consequences: First, studies have suggested that the "consequences of the employment provision of the ADA [Americans with Disabilities Act] has led to less employment of disabled workers" (DeLeire, 2000, p.21). Second, according to Oyer and Schaefer (2003), rather than increasing the hiring of women, minorities, and people with disabilities, the Civil Rights Act of 1991, has, in fact, had no effect on the hiring of women and people with disabilities, and has had "a mild negative effect on average black employment" (p. 44). Third, the Ticket to Work and Work Incentives Improvement Act of 1999 was touted as a means of rescuing the Social Security Administration from bankruptcy by providing a program that would return its beneficiaries to the workforce (Growick & Drew, 2003). According to Growick and Drew, the initial dismal results of the Ticket to Work program are related to three unintended consequences that diverted attention from the primary objectives of this program.

The purpose of this examination of the employment of individuals with disabilities and minimum wage rates is not limited to increases in minimum wages as isolated events, but also to examine the employment of individuals with disabilities over time. Rehabilitation professionals should not only understand how disability affects employment opportunities; they must likewise understand the interaction between public policies, including the minimum wage and other laws that may unintentionally limit the employment opportunities for the very people whom the policies are meant to assist.

Background

The first federal minimum wage law was part of the Fair Labor Standards Act (FLSA) of 1938. Congress claimed constitutional authority for the enactment of federal minimum wage laws could be found in the Commerce Clause of the U.S. Constitution. In the 1938 Act, the minimum wage was set at 25 cents an hour and applied to approximately 11 million out of 54.9 million American workers. There have been 25 subsequent increases in the minimum wage as well as increases in the number of workers covered under the FLSA.

Since 1997, with a national minimum wages of $5.15 per hour, most employees have been covered. In 2004, there are 11 states with state minimum wage laws set higher than the federal minimum wage and two states, Ohio and Kansas continue to have state minimum wages set lower than the federal minimum wage. Seven states have no minimum wage laws at all. In states where the state minimum wage is set lower than the federal minimum wage, the state minimum wage applies only to employees who are not covered by the FLSA. In states with state minimum wages higher than the federal minimum wage, the state wage prevails.

The high unemployment rate for people with disabilities, 13.4%, is more than double the 5.6% unemployment rate for people without disabilities (LaPlante, Kennedy, Kaye, & Wenger, 1996). The question then becomes whether the minimum wage has a different impact on individuals with disabilities than on individuals without disabilities. If increases in the minimum wage are associated with greater reduction in the employment of individuals with disabilities compared to individuals without disabilities, minimum-wage legislation may then have the unintended consequence of being another limit on the employment opportunities for individuals with disabilities.

According to Valletta (1996), most economists agree that when minimum wages were raised by 10%, employment among low-skilled groups, such as teenagers, declined by 1% to 3%. However, teenagers are not the only group of workers who are paid at the minimum-wage level. Peterson (1981) demonstrated that the adverse effects occurred not only on teenagers, but also on the employment opportunities for blacks and women as well. A controversial study by two economic professors at Princeton University found a surprising positive correlation between a higher minimum wage and higher employment in the fast food industry (Card & Krueger, 1995). They concluded that the labor market changed in the 1990s and that the minimum wage no longer has the same negative impact on employment.

The early advocates of minimum wage laws, so-called political "Progressives," acknowledged that a minimum wage would leave some people unemployable. They further agreed that those who were physically or mentally unable to attain the level of productivity that would justify payment to them of a minimum wage by employers would have to be provided for by public efforts a humane and dignified manner (Waltman & Pittman, 2002).

In recent years, analysts have started to focus on the coincidence between employment among individuals with disabilities and general labor market trends (Reskin & Roos, 1990; Yelin & Katz, 1994). In this area of inquiry, the employment of individuals with disabilities is viewed in much the same way as that of other groups with labor market liabilities, such as women, minorities, teenaged workers, older workers and low-skilled workers. Thus, individuals with disabilities, like these other groups, are believed to be subject to a last-hired, first-fired phenomenon (Trupin, Sebasta, Yelin, & LaPlante, 1997). Research showed that individuals with disabilities have fewer opportunities for employee benefits than non-disabled workers (Lustig & Strauser, 2004). The research question for this study was: Are increases in the minimum wages associated with the same changes in the labor market activity rates of individuals with disabilities as on non-disabled individuals?

Method

Twenty-two years of labor market activity rates were analyzed for the 19 states in this study. A multiple regression analysis of the minimum wage and disability status was used to predict the LMAR for individuals with and without disabilities in each state for each wage group. The time-period for this analysis was from 1980 to 2001.

Employment Data

This study utilized existing data on the LMAR from the Cornell Rehabilitation Research and Training Center web site, which obtains statistics from the Current Population Survey conducted by the Census Bureau. The LMAR is the ratio of the people who were employed at least 52 hours in the previous calendar year to the number of people in the population (Houtenville, 2004). Although the LMAR may overestimate employment among individuals with disabilities (Houtenville, 2004), it was chosen as the dependent variable for this study because of the consistency of the measure over the time.

Sample

States were selected for this study in a three-step process. First, states with state minimum wages that, at one time between 1980 and 2001, were above or below the federal minimum wage were listed. Second, from this list, states with the highest percentage of their population with disabilities were matched with states that had the lowest percentage. The last step was to choose states that had adopted the federal minimum wage; these were balanced as in step two, and were selected so as to be comparable in size and region to the states already selected. The result was three groups of states that had roughly equal numbers of large and small states, regional factors, and prevalence of work disabilities. See Appendix A for a list of the states included, the wage groups they occupied, and a description of their minimum wage legislation. Louisiana and Mississippi were among the top 10 states with the highest population levels for individuals with disabilities, but they did not have a minimum wage law and therefore were not used in the study. The resulting sample of 19 states included five of the top 10 states and 5 of the bottom 10 states matched on this variable. By geographic region, there were six states from the Northeast, three from the Midwest, seven from the South and three from the West.

Procedures

The state information regarding state minimum wages was obtained from 23 volumes of the U.S. Department of Labor's publication, Monthly Labor Review, 1979 to 2001. This publication outlines the legislation in each state for each year as well as the current federal minimum wage law. In some cases, more than one minimum wage increase took effect in a specific year. In those cases, the wage for that year was averaged, by multiplying each wage by the number of months it was in effect; the amounts were then totaled and the sum was divided by 12. For example, in Vermont, the minimum wage in 1997 was $5.00 for 6 months, $5.15 for 3 months, and $5.25 for 3 months. This resulted in an average minimum wage for that year of $5.10 [($5.00 X 6) + ($5.15 X 3) + ($5.25 X 3) / 12]. Because the LMAR reflects the employment during the previous year, the rate was adjusted accordingly.

All data analyzes were performed using SPSS 11.0 for Windows. The first multiple regression calculation used disability status as a two level factor: individuals with disabilities and non-disabled individuals. Next, the minimum wage was entered as a covariate to prevent an erroneous comparison of $3.10 in 1981 with $3.10 in 2001. State and year were entered as fixed factors. The data set included the sampling margin of error. The reported error term was consistently higher for the data regarding individuals with disabilities. To partially overcome this known error, it was included as a covariate in the multiple regression equation. The LMAR was the dependent variable.

Results

The Full Model of the regression equation is: % LMAR = Ao +A1 DISABLED STATUS A2 Min Wage + A3 DISABLED STATUS x MIN WAGE+ A4 State + A5 Year + A6 % KNOWN ERROR + ERROR

This model had an R2 of .969 (Adjusted R2 of .967). The large data set resulted in a corresponding large number of degrees of freedom (Total df = 836) therefore rather than the customary .05 alpha for significance, a more conservative .01 was adopted to reduce the risk of a Type I error. Plots of unstandardized residuals by unstandarized predicted values allowed confirmation that no significant violations to the necessary assumption for multiple regression were committed.

Consistent with other research, wage alone was not a significant predictor of the LMAR (p = . 358). See Table 1 for a description of increases to the federal minimum wage.

As expected, due to the substantial differences in the LMAR between individuals with disabilities and non-disabled individuals, disability status was significant with a high F value, F(1,836)=1192.851, (p<.0001). The interaction of the disability status and wage was also significant F(1,836)=84.815, (p<.0001). To further examine the interaction between wages and disability status, as well as reduce the multicollinearity of several factors in the model, the data set was grouped by whether a state had a minimum wage below, at, or above the federal minimum wage.

The new model included wage groupings as opposed to the actual wage at the time of the observation. The wage groups were non-significant for both individuals with disabilities and non-disabled individuals. Therefore, in order to find the significant interaction the data set was further grouped by 5-year time-periods. This provided four time-periods with one time-period in which there was no increase in the federal minimum wage and three time-periods in which there were increases. Because the study covered 22 years, a fifth time-period, 2000 to 2001, which contained only two years was not in the second analysis. The resulting new model was:

% LMAR = Ao + A1 DISABLED STATUS A2 WAGE GRP + A3 TIME-PERIOD+ A4 DISABILITY STATUS x WAGE GRP + A5 DISABILITY STATUS x TIME-PERIOD+ ERROR

The results from this second analysis revealed that time-period was significant (F(4,821)=19.225 p< .0001) for both groups but in a different manner. For non-disabled individuals, the LMAR was significantly higher in the fourth time-period, 19951999, than in the 1980-1984 time-periods for all wage groups. However, descriptive statistics showed that the LMAR for non-disabled individuals had been steadily increasing over all four time-periods. The fourth time-period was statistically significant over the first time-period, but since each time-period was not significantly higher than the preceding one, this should be considered a spurious result.

For individuals with disabilities, a different pattern emerged both in wage groupings and time-periods. Disregarding wage groupings, the highest employment for individuals with disabilities occurred in the second time-period, 1985-1989, the time-period when there were no increases in the federal minimum wage. This second time-period was non-significantly higher than the first time-period, 1980-1984, but significantly higher than the next two time-periods. In fact, the fourth time-period, 1995-1999 was significantly lower than all three of the previous time-periods. The different effect that wage rate increases have on the employment for individuals with and without disabilities was revealed by the wage groupings by labor market activity rates across time-periods. While wage groupings were non-significant for non-disabled individuals, individuals with disabilities had significantly higher LMAR in states that had minimum wages above the federal minimum wage. In all four time-periods, states with minimum wages above the federal minimum wage had higher LMARs for individuals with disabilities, for that time-period, compared to the other wage groupings. A three way interaction of disability status, wage group, and time-period would not be expected to be statistically significant because there was not a significant difference in the below and at states.

It should be kept in mind that during the first time-period, 1980-1984, only Alaska had a state minimum wage above the federal minimum wage; therefore the statistical significant difference for that wage group in that time-period should be considered spurious. The only interaction that was significant was the disability status and time-period interaction, F(4, 835), p <. 0001. There were no statistically significant differences between the LMAR of states below and states at the federal minimum wage, suggesting that the number of individuals paid less than the federal minimum wage is too small to effect the employment in those states.

Descriptive statistics by time-period revealed that the highest employment rate for individuals with disabilities occurred between 1985 and 1989, the time-period in which there were no increases in the federal minimum wage. Ninety-nine percent confidence intervals for these rates demonstrate that these are statistically significant differences. This second time-period, 19851989, evidenced a non-significant increase over the previous time-period, but was significantly higher than two time-periods that followed, 1990-1994 and 1995-1999, which evidenced a decline in the LMAR consecutively and was associated with consecutive 90 cent increases to the federal minimum wage. The fourth time-period, 1995-1999, was significantly lower than all previous time-periods for individuals with disabilities, while, as stated previously, LMARs for individuals without disabilities steadily increased.

Discussion

Because the highest LMARs for individuals with disabilities were not found in states with lower than federal minimum wages, at first glance one might conclude that higher minimum wages improve the employment opportunities for individuals with disabilities. However, this conclusion would be premature, without having also considered that the highest LMAR for individuals with disabilities occurred during the 5-year period when there were no increases in the federal minimum wage. Therefore, these results have two ramifications:

First, there appears to have been more employment opportunities for individuals with disabilities in states with higher than federal minimum wages. Research by Beegle and Stock (2003) outlined several states that had enacted state-level antidiscrimination laws prior to the ADA. States with minimum wages below the federal level do not differ significantly from states with minimum wages at the federal level.

Second, the highest employment rate for individuals with disabilities occurred during a time-period when there were no increases to the federal minimum wage. Therefore, LMAR for individuals with disabilities may not be associated with a specific wage level; rather the evidence suggests that increases in minimum wages are associated with a reduction in the employment rate for individuals with disabilities.

Consideration should also be given to the percentage of minimum wage earners in each state. For example, according to the Bureau of Labor Statistics, in 2003 California with a higher than federal minimum wage, only 0.2% of its hourly workers were earning less than $5.15 per hour while in Texas, which recently adopted the federal minimum wage as their state wage, 4.1% earned less than $5.15 per hour. The percentage of minimum wage earners in each state was not part of the regression equation because Bureau of Labor Statistics has only recently begun tracking this measure (S. Haughen, personal communication, September 7, 2004).

Two other significant findings warrant discussion. First, the finding that the highest LMAR for individuals with disabilities occurred during the time-period of 1985-1989 was even more surprising when the drop in the denial rates by the Social Security Administration, starting in 1988 (Beegle & Stock, 2003), is taken into consideration. This result, together with the only slight increase in the employment rate for non-disabled individuals, may call into question further increases to the federal minimum wage. However, such increases should not be rejected solely on the basis of these results, because the strong association suggested does not imply a causal relationship between wage increases and LMAR decreases.

Perhaps the most significant finding was the decrease in the LMAR for individuals with disabilities continued into the fourth time-period, 1995-1999. This result suggests that the whether the reduction in the LMAR was not solely an adverse reaction to the ADA, but rather a predictable labor market reaction to a second large increase in the federal minimum wage after almost 10 years with no such increases. In this study, all of the states had enacted laws to protect individuals with disabilities from employment discrimination prior to the 1990s, with the majority of states passing legislation in the 1970s. It cannot be determined from this analysis which had a greater impact upon the LMAR for individuals with disabilities, the enactment of the ADA or large increases in the federal minimum wage. The analysis does provide some evidence that the combination of the wage increases and the ADA may have interacted to suppress the LMAR of individuals with disabilities.

There are limitations in this data that need to be noted. First, the data are survey data and the margins of error are inconsistent from state to state and across each year. Second, definitions of disability have changed over time for the counting purposes, and they are currently fashioned in a manner so as to be comparable with the definition of "disability" found in the Americans with Disabilities Act (1991). Third, because a rather small percentage of the population is identified by the individual measures, the employment rate of those with a given characteristic tends to be somewhat volatile. (For a complete discussion of the reliability issues in these data see McNeil, 2000.) Those issues aside, McNeil points out at the end of his analysis, that CPS data on individuals with disabilities may be very useful for cross-sectional studies.

Implications for rehabilitation counselors

The barriers to employment for individuals with disabilities are many: employer attitudes, system disincentives, pre-employment testing, and historical discrimination to name a few. Before the implementation of programs designed to improve the opportunities for employment for individuals with disabilities, a thorough search for possible unintended consequences should be undertaken.

Counselors should consider both the skill levels and the productivity levels of their clients in determining job placement. Minimum wages set a floor for entry into the workforce. Employers need to be convinced that the productivity of prospective employees with disabilities will offset increased costs of employment due to minimum wage increases. For clients with substantially low productivity levels, supported employment and affirmative industries (DuRand, 1987) may be viable options for their clients to be able to reap the benefits of inclusion, socialization and sense of accomplishment that work provides.

This research strengthens the need for rehabilitation counselors working with business and industry to emphasize the financial benefits to hiring individuals with disabilities. Economic incentives, such as the Work Opportunity Tax Credit, along with advantages such as lower turnover, create an economic advantage to business in hiring individuals with disabilities that may overcome the putative effects of wage increases, and should be highlighted in their discussions.

Conclusions

In this study, the LMAR of individuals with disabilities were compared to the LMAR of individuals without disabilities for each of 19 states from 1980 to 2001. The rationale behind this simple design was that because both groups were employed or seeking employment in the same labor market and economic environment. Therefore, these factors should equally affect the employment rates of both groups equally. The only variable would then be the minimum wage rate of the state. Specifically those states with federal minimum wages would serve as controls for those states with state minimum wages that are either lower or higher than the federal minimum wage. Several states have been in all three categories over time: above, at, and below the federal minimum wage. These states are, essentially, acting as their own controls. The question that guided this research was whether there was a difference in the employment rates for individuals with disabilities compared non-disabled individuals according to the states' minimum wage? The analysis provided evidence that minimum wages do not affect the LMAR of non-disabled individuals in the same manner as they affect the LMAR of individuals with disabilities.

The minimum wage is likely to continue to be a hotly debated policy. In summary, there are both limitations and findings that warrant further discussion. First, this study examined 19 of 50 states; subsequent research should include all 50 states. Second, an equation that contains all possible variables that affect the employment rate, such as gender, race, age, education, and so forth, would be impossible to calculate. The simple design of this study still provides strong evidence that a relationship exists between increases in minimum wages and a reduction in the employment rate for individuals with disabilities. Third, increases to the minimum wage in both the federal and state arenas did not occur in political isolation. State laws, as well as the population characteristics, need to be considered. Finally, the number of people reporting that they are disabled appears to be increasing, especially since the 1990s (Houtenville, 2004).

While minimum wages provide an income well below the poverty level, there are more benefits to working that cannot be measured by a paycheck. As long as people who want to work are not able to work, any barrier to employment for individuals with disabilities should be addressed.

Further research into the differences in the employment environment between states with minimum wages higher than the federal wage level and others could reveal what policies, programs, or industries promote the inclusion of individuals with disabilities into the workforce. The incorporation of the differences found in this study may be significant to other research regarding employment barriers. For example, are the attitudes of employers different from one state to another?

Labor market research is a worthwhile pursuit in working toward increasing the employment opportunities for individuals with disabilities. This study had two important findings: First, an increase in the minimum wage may have an unintended consequence--suppression of employment among individuals with disabilities. This should not be interpreted as an argument for the abolition of the federal minimum wage. Instead it should stimulate further investigation into how states with higher than federal minimum wages have increased employment opportunities for individuals with disabilities. Second, a serendipitous finding was that the reduction in the employment rate for individuals in the 1990s might have been an interaction between the passage of the Americans with Disabilities Act and several large increases in the federal minimum wage. Thus, the perceived unintended consequences of the ADA may not be as clear as has previously been asserted.

Appendix A

States Included in Study

During the years when a state did not have a minimum wage, a dummy wage of $1.00 was used for this analysis. The numbers in brackets specify the wage groups the state has belonged to for this study.

1. Arkansas [1, 2]: From 1980 to 1989, the Arkansas' state minimum wage was lower than the Federal Minimum Wage. It was the same as the Federal minimum wage in 1989 and 1990 and fell below again in 1991 1992, and 1993. In 1994, it was raised to the Federal level, but did match the 1996 increase until 1997. It has remained consistent with the Federal Minimum Wage through 2001. State had passed antidiscrimination laws prior to 1979.

2. California [2,3]: The state minimum wage was consistent with the federal minimum wage until 1988. In 1989, California went above the federal minimum wage until 1992 and the state minimum wage was the same as the federal minimum wage until 1997. The currently state minimum wage is above the federal minimum wage. State antidiscrimination law passed in 1973.

3. Connecticut [3]: The Connecticut minimum wage rate automatically increases by 1 percent above the federal minimum wage. State passed antidiscrimination law in 1973.

4. Delaware [1,2,3]: Delaware's state minimum wage was below the federal minimum wage until 1989 when Delaware passed legislation that automatically replaced the state wage if the federal minimum wage was higher than the state's. From 1989 to 1995, the state wage was the same as the federal wage. In 1995, the state wage was increased above the federal wage and continues to be higher. State passed anti-discrimination law in 1979.

5. Georgia [1,2]: Georgia had no minimum wage law prior to 1983 when it set the state minimum wage at $1.25 (the federal minimum wage was 3.35 that year). In 1984, the state raised its minimum wage to 3.25 with a scheduled increase in 1985 to 3.35 in order to match the federal minimum wage. The state minimum wage did not increase with the federal minimum wage until 2001. Currently the state minimum wage is at the same level as the federal minimum wage. For 1980 to 1982 a dummy wage of $1.00 was used for the purposes of this analysis. State passed anti-discrimination law in 1980.

6. Illinois [1,2]: Illinois' state minimum wage was below the federal rate until 1986 when the state matched the federal rate. In 1990, the state adopted the federal rate by reference. State began passing anti-discrimination laws as early as 1971.

7. Kansas [1]: Kansas had no minimum wage law until 1987 when it established a minimum wage of $1.60. Kansas has increased its state minimum wage only twice. In 1988, the state minimum wage was raised to 2.13, and raised again in 1989 to 2.65 where it remains. The dummy wage of $1.00 was used between 1980 and 1986. State passed anti-discrimination law in 1974.

8. Kentucky [1,2]: The state minimum wage was lower than the federal minimum wage from 1980 to 1987 when it adopted the federal minimum wage by reference. State passed anti-discrimination law in 1988. State passed anti-discrimination law in 1976.

9. Maine [2,3]: The State minimum wage was at the same level as the federal minimum wage from 1980 to 1986 when it went above the federal wage. It remained higher than the federal rate until 1991. Legislation was enacted that stated the Maine minimum wage is automatically replaced with the Federal minimum wage rate if it is higher than the State minimum with the exception that any such increase is limited to no more than $1.00 per hour above the current legislated State rate. State passed anti-discrimination law in 1974.

10. Massachusetts [1,2,3]: The state minimum wage is was at the same level as the federal minimum wage from 1980 to 1986 when it went above the federal wage. The state wage was below the federal wage from 1991 to 1995. The state minimum wage has been above the federal minimum wage since 1997. State passed antidiscrimination law in 1972.

11. New Jersey [1,2,3]: The state minimum wage in New Jersey was below the federal minimum wage from 1981 until 1989. In 1992, the state minimum wage was higher than the federal minimum wage until 1997 when it went below the federal rate for two years. In 1999 New Jersey adopted the federal minimum wage by reference. Several antidiscrimination laws were passed in 1972.

12. North Carolina [1,2]: 1980 to 1982 the state minimum wage was below the federal minimum wage. Since 1983, the wages have been the same and the state has adopted the federal minimum wage by reference. State antidiscrimination laws were passed in 1975.

13. Ohio [1,2]: The state minimum wage in Ohio has been below the federal minimum wage except for five years between 1991 and 1995. The Ohio minimum wage has three tiers that are tied to the gross annual sales of the employer. For the purpose of the study, the highest state minimum wage was used because the majority of the workers not covered by the federal minimum wage would be covered in this tier. State passed an antidiscrimination law in 1976.

14. Oregon [1,2,3]: The state minimum wage was below the federal minimum wage from 1980 to 1985. It was the same as the federal minimum wage from 1986 until 1989. Since 1989, the state minimum wage has been higher than the federal minimum wage. State began passing a series of antidiscrimination laws in 1973.

15. Rhode Island [1,2,3]: The state minimum wage was lower than the federal minimum wage from 1980 to 1982. It was the same as the federal wage from 1983 until 1986. It has remained above the federal wage since 1987. State antidiscrimination laws passed in 1973.

16. Texas [1,2]: There was no state minimum wage in Texas until 1986 when a state minimum wage of $1.40 was set. In 1987, the only increase to the state minimum wage increased it to $3.35 (the federal minimum wage that year). There have been no further increases. A dummy wage of $1.00 was used for 1980 to 1985. State passed antidiscrimination laws in 1975.

17. Vermont [2,3]: The state minimum wage was the same as the federal minimum wage from 1980 to 1986. In 1987, it went above the federal minimum wage. It has remained above the federal minimum wage since that time. State passed antidiscrimination law in 1974.

18. Washington [2,3]: The State minimum wage was below the federal minimum wage from 1980 until 1988. It was the same as the federal minimum wage from 1989 until 1998. The state minimum wage has been higher than the federal rate since 1999. Antidiscrimination laws were passed in 1973.

19. West Virginia [1,2]: The state minimum wage was below the federal minimum wage from 1980 until 1993 when it matched the federal minimum wage. With the exception of a small dip below the federal wage in 1997 and 1998, the state wage has been consistent with the federal minimum wage. An antidiscrimination law was passed in 1981.

Acknowledgement

The author wishes to acknowledge the assistance of Dr. William Crimando and Dr. Ernest Lewis at Southern Illinois University. Dr. Crimando's guidance and support were instrumental in the completion of this work. Dr. Lewis provided crucial assistance in the use of SPSS and in the completion of the statistical analysis of the data collected. Thanks are also due Donald R. Janousek for his assistance in manuscript preparation.

References

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Ilana S. Lehmann

Southern Illinois University Carbondale

Ilana S. Lehmann, Southern Illinois University Carbondale, Carbondale, IL 62901-6899 Email: [e-mail].

Table 1
Federal Minimum Wages 1981 to Present

Date                    Wage

Jan 1, 1980            * 3.10
Jan 1, 1981              3.35
Apr 1, 1990              3.80
Apr 1, 1991              4.25
Oct 1, 1996              4.75
Sept 1, 1997             5.15

* from $2.90

Table 2
Labor Market Activity Rates across time periods by disability status *

Time Period               1980-1984         1985-1989

Disability Status

With Disabilities          33.457            35.823
(99% CI)               (31.553-35.361)   (34.047-37.598)

Without Disabilities       86.487            88.681
(99% CI)               (84.646-88-328)   (86.903-90.460)

Time Period               1990-1994         1995-1999

Disability Status

With Disabilities          32.592           28.896 *
(99% CI)               (30.697-34-487)   (27.019-30.773)

Without Disabilities       89.170            90.371
(99% CI)               (87.400-90.940)   (88.618-92.125)

* significant p < .01.

Table 3
Labor Market Activity Rates by wage group and disability status
during four 5-year periods

                     1980-1984   1985-1989    1990-1994   1995-19990

Min. Wage Increase       $.45           $0        $.90         $.90

Disability Status
                                     Below

  Disabled           31.177      35.429       30.637      29.991
  Non-disabled       84.532      87.328       89.229      90.220

                                        At

  Disabled           34.165      33.490       32.491      28.106
  Non-disabled       88.116      88.025       89.131      90.352 (a)

                                     Above

  Disabled           *           39.244 (a)   33.449      28.033
  Non-disabled       *           91.652       89.372      90.983

(a) denotes the highest LMAR for each status in each wage group.

* Alaska was the only state with above federal minimum wages in the
first time-period.