U.S. Pushes Target for Hiring the Disabled

March 1, 2012

The Obama administration has begun an effort to increase employment of the disabled by private-sector businesses.  To this end, the Labor Department is setting a minimum fraction of a company's workers that must technically be disabled in order for that corporation to keep their contracts with the federal government, says the Wall Street Journal.

  • The initiative would set a minimum 7 percent disabled workforce for businesses that do not wish to have contracts with the federal government cancelled.
  • Under these standards, the new regulation would affect approximately 200,000 companies that generate $700 billion in annual revenue with federal government contracts.
  • The justification for the law stems from the employment gap faced by those with disabilities: in January, unemployment among the disabled was 12.9 percent, as opposed to 8.7 percent for the nation as a whole.
  • Furthermore, discouraged by the unfriendly job climate, many people with disabilities have stopped looking for work, with labor force participation dropping to 30.5 percent while this figure was 30.5 percent for people without disabilities.

A number of companies, especially those that do a great deal of business with the federal government, have come forward in outright opposition to the regulation.  They state a number of claims, ranging from financial costs to potential legal issues that from their perspective make the new standard a nightmare.

  • While the rule calls for 7 percent of a business' workers to have disabilities, only 5.7 percent of the labor force technically qualifies as disabled, meaning that there might not be enough disabled workers for everyone to meet the new burden.
  • Furthermore, individual industries are concerned that their specific sector may not be able to attract enough disabled workers in what looks to be a competitive hiring atmosphere.
  • Other opponents emphasize the violation of privacy necessary to find out if an applicant has a disability and the potential lawsuits that could ensue.
  • In order to meet the ration requirement, some businesses might even have to reduce their non-disability labor force in order to come into compliance.

Source: Melanie Trottman, "U.S. Pushes Target for Hiring the Disabled," Wall Street Journal, February 29, 2012.

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