Even Congress admits that the minimum wage causes unemployment by exempting people with disabilities

From Mark Perry of "Carpe Diem."

"From Nicholas Freiling writing for the Mises Institute:

When Congress first established the minimum wage in the Fair Labor Standards Act of 1938, it left a loophole for businesses that employ people with disabilities.

The Secretary, to the extent necessary to prevent curtailment of opportunities for employment, shall by regulation or order provide for the employment, under special certificates, of individuals … whose earning or productive capacity is impaired by age, physical or mental deficiency, or injury, at wages which are lower than the minimum wage.

These special certificates are known today as 14(c) permits, and thousands of employers have one. Some studies claim that more than 300,000 Americans work for subminimum wages under the auspices of such permits.

When Congress passed the 14(c) exemption along with the minimum wage in 1938, they did so, as quoted above, “to prevent curtailment of opportunities for employment” of people with disabilities. The authors of the bill understood that minimum wage leads to unemployment for those “whose earning or productive capacity is impaired.” So in order to avoid the negative publicity associated with putting people with disabilities out of work, they exempted such people from the minimum wage.

But this begs the question. If people with disabilities are exempt from the minimum wage because their earning capacity is impaired and finding employment might otherwise be impossible, why don’t people without disabilities whose earning capacity is equally low also qualify for an exemption?

So by exempting people with disabilities from the minimum wage, Congress actually discriminates against the non-disabled — those who cannot work under the auspices of a 14(c) permit — and favors people with disabilities.

By continuing to exempt people with disabilities from the minimum wage, Congress reveals its implicit awareness of the minimum wage’s negative effects on the least productive people. Yet to end all exemptions means to disadvantage people with disabilities in the workplace who already have a hard enough time finding work. Finally, to repeal the minimum wage altogether and allow everyone to negotiate wages freely would mean to admit a seventy-five-year long mistake that harmed thousands, if not millions, of unskilled laborers over the past half-century who found themselves unemployed at some time or another."