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Journal of Comparative Policy Analysis: Research andPractice

ISSN: 1387-6988 (Print) 1572-5448 (Online) Journal homepage: http://www.tandfonline.com/loi/fcpa20

Sub Minimum Wage for Persons with SevereDisabilities: Comparative Perspectives

Michal Soffer , Patricia Tal-Katz & Arie Rimmerman

To cite this article: Michal Soffer , Patricia Tal-Katz & Arie Rimmerman (2011) Sub MinimumWage for Persons with Severe Disabilities: Comparative Perspectives, Journal of ComparativePolicy Analysis: Research and Practice, 13:3, 265-286, DOI: 10.1080/13876988.2011.565914

To link to this article: http://dx.doi.org/10.1080/13876988.2011.565914

Published online: 24 Jun 2011.

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Sub Minimum Wage for Persons withSevere Disabilities: ComparativePerspectives

MICHAL SOFFER*, PATRICIA TAL-KATZ** andARIE RIMMERMAN{

*Department of Social Work, Ben-Gurion University of the Negev, Israel; **School of Social Work, Ariel

University Center of Samaria, Israel; {Social Policy and Planning, University of Haifa, Israel

ABSTRACT This article examines the extent to which the sub minimum wage (SMW) is aneffective labor market policy for people with severe disabilities to address their under-employmentand lack of opportunity to be gainfully employed. We assess SMW policies in the United States,Australia and Israel, along four conceptual dimensions delineating participants, programs, servicedelivery, and outcomes. Similarities and differences in policy and practice on these dimensions arefound across countries, primarily in use of competitive versus non-competitive employmentprograms and wage calculation. In addition, across countries, SMW serves relatively smallpopulations with members perceived to be in need of protection from potential job exploitation.Our primary conclusion from the analysis is that more research is crucial in order to rethink thesepolicies and their effectiveness.

Introduction

Underemployment of people with severe disabilities has been a major focus of policy,legislation and research in the United States (Barnow 2008). Although systematicinvestigation is limited (Markesich et al. 2006), studies from Europe showindividuals with severe disabilities, such as schizophrenia, have low employment

Dr. Michal Soffer is a lecturer at the Charlotte B. and Jack J. Spitzer, Department of Social Work, Ben-

Gurion University of the Negev. Her main research interests are stigma toward disability and illness as

reflected in policies and social structures and processes. She has co-authored a book on women inmates in

Israel, and published several papers on illness-related stigma, women inmates, and disability-related

policies.

Dr. Patricia Tal-Katz is a lecturer at the School of Social Work, Ariel University Center of Samaria. Her

main research interests are rehabilitation of people with mental and physical disabilities, illness and health.

She was recently involved in a large comparative study that examined rehabilitation policies of terror acts

casualties in Israel and the US. Her dissertation dealt with activities and the rehabilitation of people who

acquired their disabilities while serving in the Israeli Defense Force.

Dr. Arie Rimmerman is Richard Crossman Professor of Social Policy and Planning at University of Haifa.

His main research are the areas of employment and civic participation of people with disabilities. He is the

author of six books and more than 150 articles in refereed journals. His forthcoming book with Cambridge

University Press is on Social inclusion of People with Disabilities.

Correspondence Address: Professor Arie Rimmerman, Richard Crossman Professor of Social Welfare &

Social Planning, School of Social Work Social Welfare & Health Sciences, University of Haifa, Haifa,

Israel 31905. E-mail: [email protected]

Journal of Comparative Policy Analysis,Vol. 13, No. 3, 265–286, June 2011

ISSN 1387-6988 Print/1572-5448 Online/11/030265-22

ª 2011 The Editor, Journal of Comparative Policy Analysis: Research and PracticeDOI: 10.1080/13876988.2011.565914

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rates ranging between 10 and 20 per cent (see review by Marwaha and Johnson2004). Estimates from the United States report similar employment levels (McGurket al. 2009). Moreover, the majority of people with severe disabilities are employed insegregated and non-competitive settings (Migliore et al. 2008) and rarely advance tocompetitive employment (US GAO 2001, Blanck et al. 2003, Boeltzig et al. 2006).

In the United States and other countries, tax credit policies and workplaceaccommodations are among the tools to promote employment of people with severedisabilities (see Mont 2004). Tax credits, used mainly by employers, are meant tocreate financial incentives to hire people with disabilities (Silverstein et al. 2005,Blanck et al. 2009). Once hired, accommodations used by employees assist in abarrier-free work environment (Schartz et al. 2006). Another major tool, framed as alabor market policy for underemployment and lack of opportunities to work andexposure to job skills, is the sub minimum wage (SMW) (Butterworth et al. 2007).SMW enables employers, under certain conditions, to pay persons with disabilitieswages below the established minimum wage (Blanck et al. 2003).

Supporters view SMW as an important tool to increase earnings of persons withsevere disabilities and integrate them in competitive workplaces (Tagar 2006).Opponents of SMW see it as a regulated measure that does not significantly changethe employment status of people with severe disabilities. Some suggest sub minimumwages may be discriminatory and stigmatizing (US GAO 2001, Morris et al. 2002,Blanck et al. 2003). Nonetheless, SMW has been in practice for several decades in theUnited States (Morris et al. 2002) and used in other countries (see BBI 2008).Although debates as to efficacy and equity of SMW are documented, programresearch is limited, mainly due to a lack of useful data collection on these programs(see Butterworth et al. 2007, BBI 2008).

In this article, we examine the extent to which SMW is an effective labor marketpolicy to enhance employment opportunities and facilitate integration of people withsevere disabilities into the labor market. Persons with severe disabilities are:‘‘individuals of all ages who require extensive ongoing support in more than onemajor life activity in order to participate in integrated community settings and toenjoy a quality of life that is available to citizens with fewer or no disabilities’’(TASH 1991: 19).1

We assess and compare SMW policies in the United States, Australia, and Israel.Unlike the prolonged experience that America, and to a lesser extent Australia, havewith legislation and implementation of SMW systems for employees with disabilities,Israel’s legislation and consequential policy, are a product of the twenty-firstcentury. This entails an opportunity to study SMW in depth as a policy tool toaddress the underemployment of persons with severe disabilities which emerged inthree different settings and over the course of different times. Therefore insights canbe gained by comparing the characteristics of these policies in each country as well asby learning from the rich history that the American (and to a lesser extent theAustralian) experience provides.

The first part of the paper describes SMW and the arguments in support of andagainst this policy. We next review the legislative underpinnings of SMW policies inthe three examined countries, comparing SMW according to Rivlin’s (1971) modelfor rational and systematic analysis. We assess and compare SMW policies alongfour conceptual dimensions delineating participants, programs, service delivery, and

266 M. Soffer et al.

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outcomes. Based on our review and analysis, the closing part discusses whether theexisting studies support the conclusion that SMW promotes employment rates andcompetitive employment for persons with severe disabilities.

SMW Background

SMW, or ‘‘adjusted minimum wage’’, for example as termed in Israel (see State ofIsrael Ministry of Justice and Ministry of Foreign Affairs 2008), is an incentive toencourage employers to employ people with disabilities. The method consists ofpaying individuals whose production, in a given job and work place, is impairedseverely because of their disability, according to their productivity level. Theassumption is that this method of payment will generate more job opportunities forpersons who are more at risk of being unemployed (Butterworth et al. 2007). As isthe case with the minimum wage, SMW can be therefore viewed as a potential usefulmechanism for redistribution (Lee and Saez 2010). As first conceived in the UnitedStates in 1938, SMW was aimed at persons and jobs characterized by manufacturingand repetitious work tasks (Morris et al. 2002). Under specific conditions, this policyallows employers to pay such employees wages below the statutory minimum wage(see Blanck et al. 2003). SMW is seen as a special case of the minimum wage andbased on the same classic economic reasoning, namely that a rise in the minimumwage generates more unemployment (Butterworth et al. 2007).

Similar to the minimum wage (Lee and Saez 2010), SMW is a highly controversialtool which fuels timely public debates regarding its equity and whether abolishing itwill create more unemployment for people with severe disabilities. For example, onApril 5, 2010 the gazetteonline posted an article entitled: ‘‘Higher pay for disabledemployees could put them out of work.’’ However, the article mentions themistreatment of workers with mental disabilities who ‘‘were paid only $65 a monthto work at West Liberty Foods and an Atalissa farm, Sen’’, producing claims totherefore change the law (http://gazetteonline.com/breaking-news/2010/04/05/high-er-pay-for-disabled-employees-could-put-them-out-of-work).

Some supporters of SMW argue that abolishing it will increase the under- andunemployment of persons with severe disabilities and their further marginalizationfrom the labor market (Tagar 2006). Other claims in favor of SMW concern thecontext in which these wages are usually paid (contract work), the notion that fee forservice income will not – and should not – cover the cost of higher wages, and thefact that a blanket minimum-wage policy would contradict rehabilitative goals. Asfor the first argument, private customers utilize work center services and productsthrough a competitive bid process. The limited productivity of some employees withdisabilities requires utilizing more workers to generate the same amount that isproduced on average by one non-disabled worker. Therefore, if such programs werenot permitted to pay wages that are based on productivity, they will be forced tocharge higher prices for their goods compared to competitors from the privatesector. Obviously, no customer can be expected to pay the difference in cost thatstems from employing people with disabilities (Inge et al. 2009).

As for the fee for service income, historically client wages have not been legallyincluded in cost statements. The latter aim to establish fair and equitable rates ofreimbursement for work centers and day centers. Government has repeatedly ruled

Sub Minimum Wage for Persons with Severe Disabilities 267

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http://gazetteonline.com/breaking-news/2010/04/05/higher-pay-for-disabled-employees-could-put-them-out-of-workhttp://gazetteonline.com/breaking-news/2010/04/05/higher-pay-for-disabled-employees-could-put-them-out-of-work

that when public monies are used to cover client payroll, it constitutes aninappropriate use of public funds since it basically means providing a subsidy tothe private businesses that use rehabilitation center services. Hence, client wagesmust be paid out of sales or contract income, not dollars intended to fund programsand pay staff. Unfortunately, some programs do attempt to cover their client payrollout of service fee revenue. When they do so, they inevitably draw funds away fromstaff support, staff training, and staff payroll. Aside from operating within aquestionable compliance posture, such agencies typically begin to suffer from theunderstaffing, higher turnover, and poor quality of services that inevitably result(Inge et al. 2009).

It has been argued that a blanket minimum-wage policy will impair a givenrehabilitation program’s ability to measure productivity as well as providing adisincentive for clients to improve their performance. Historically, a detailed analysisof the productivity level of each rehabilitee has been central to the rehabilitationprocess. Indeed, it would be difficult to imagine how one might achieve an accurateevaluation of the training and rehabilitative needs of a client without a verifiablemeasure of productivity and earnings. Once assessed and evaluated, each rehabiliteeis generally encouraged to develop useful work and social behaviors and to abandonthose behaviors that may have, in the past, presented barriers to higher earnings and/or further community integration. The prospect and achievement of higherproductivity and, most importantly, a larger paycheck, provides a very strongincentive for continued progress. Providing clear feedback to the rehabilitee abouthis/her productivity signifies respect and confidence that real improvements can bemade. Such feedback also generates positive reinforcement of the vocationalprogress (Inge et al. 2009).

Finally, there are those who are in favor of SMW who suggest that segregatedwork, i.e. SMW arrangements in sheltered employment settings in the United States,is a transitional phase to competitive employment (Inge et al. 2009). Unfortunately,research shows that this is often not the case and sheltered work becomes long-timework for many otherwise qualified employees with severe disabilities (Blanck et al.2003, Inge et al. 2009).

Similar to the concept of minimum wage, SMW is based on the assumption ofclassic economic theory which predicts that increasing the minimum wage will resultin adverse effects on employment. Classic economic theory maintains that increasingthe minimum wage will have negative effects on employment since higher wages forsome employees will mean letting go of others so that the economic equilibrium willremain intact (Brown et al. 1982).

Classic economic theory and its predictions have been questioned by the evidence-based approach which examines the effects of increasing the minimum wage in actuallabor markets. Of note is that not a single study tested the effects of increasing theSMW on people with severe disabilities (Butterworth et al. 2007). Researchconducted according to the evidence-based approach however, yielded mixed andopposing findings (Butterworth et al. 2007). On the one hand studies showed that anincrease in the minimum wage did not result in more unemployment (Card 1992,Katz and Krueger 1992, Card and Krueger 1994, 2000). But, on the other hand,other studies have demonstrated that increasing the minimum wage does result inmore unemployment (Neumark and Wascher 2000, 2004) and more poverty


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(Neumark et al. 2005). Lehmann (2006) found that an increase in the minimum wagedid not affect the employment of the general population, but it had an adverse effecton the employment of people with disabilities.

In view of these contradicting results, Butterworth et al. (2007: 15) concludethat

There is not currently a clear theoretical or evidence-based understanding of theimpact of increases in the minimum wage on the labor market. The biggestlimitation of the evidence-based approach is the difficulty of isolating the effectsof the many intervening variables that may also have a role in determining theperformance of economic systems.

Thus, opponents of SMW argue that since economists are not in agreement as to theeffects of increasing the minimum wage on the overall population, and since SMW issimilar to the case of minimum wage, then the effects of SMW on people with severedisabilities is equally questioned (Butterworth et al. 2007).

Apart from the economic argument which challenges the effectiveness of SMW,opponents of SMW argue that it is discriminatory, and exploits and stigmatizespeople with severe disabilities (US GAO 2001, Morris et al. 2002, Blanck et al.2003).2 Those who are against SMW also claim that although SMW is determinedfor a specific role in a specific work place, the employee, his/her family and theirsupport worker might perceive the employee as incapable of earning the minimumwage or the prevailing wage (Butterworth et al. 2007).

In addition, opponents of SMW question whether diminished productivity is adisability-related or rather a mere reflection of poor job placement (Butterworthet al. 2007). Other critiques of SMW argue that it was established in an era when theUnited States was characterized by a production economy. With the shift ineconomy to a primarily service economy, in the United States and elsewhere, thereliance on productivity as a key feature of what constitutes a quality or valuedemployee is no longer the case (Butterworth et al. 2007).

Some argue that SMW policies reflect the perception of disability as a deviationfrom medical norms, that is, a deficiency or malfunction (Hahn 1993). Since in thisapproach disability is viewed in terms of an inability to work (see Blanck 2005,2008), disability rights advocates view SMW as a form of cash transfer or charity, theembodiment of societal benevolence which stands in contrast to the rights approachto disability as set out, for instance, in the Americans with Disabilities Act (ADA) of1990 (Inge et al. 2009).

Criticisms of SMW therefore are, in part, based on socio-cultural meanings ofemployment and disability. Production and output historically are viewed as centralvalues in industrialized societies (Russell 2002: 122). As such, work productivity hasbecome a shorthand for defining entitlement, worthiness, citizenship and inclusion(Levitas 1998, Logue and Blanck 2010). Those who are marked as unproductive orunemployable are doomed to the fringes of society (Abberley 2002). Someresearchers suggest that defining employment in terms of productivity maintainspower structures and promotes the marginalization of oppressed groups such aswomen and people with disabilities from the labor market (Russell 2002, Barnes2003, Barnes and Mercer 2005).


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When employment derives its meaning from production; disability is viewed as theembodiment of non-productivity or dependency (see Clapton 2003). SMW policiesnot only adopt notions of employment as productivity, but also foster assumptionsthat people with disability are unproductive due to inability. Furthermore, althoughlabels of inability are presumably tied to certain job functions within a givenworkplace, judgments of reduced or impaired productivity become generalized anddevoid of their contextualized meaning (Butterworth et al. 2007). In this sense, SMWpolicies not only stem from intertwined negative social and cultural interpretationsof disability and work, but may also strengthen and perpetuate these culturalmeanings.

Legislative Underpinnings of SMW Policies in the United States, Australia and Israel

The United States

The American SMW mechanism has a long history (see Whittaker 2005). Section14(c) of the Fair Labor Standards Act (FLSA) of 1938 allows employment of peoplewith disabilities at rates below the statutory minimum wage. The aim of the 14(c)program was to facilitate employment opportunities for individuals with disabilities(Blanck et al. 2003). The Act was amended twice. In 1966 its amendments dictatedthat employees with a disability in competitive and non-competitive settings, exceptthose who were employed in ‘‘work activities centers’’, be paid no less than 50 percent of the federal minimum wage (Whittaker 2005). ‘‘Work activities center’’ was aterm used to describe sheltered workshops that were predominantly rehabilitativeand treatment centers. Participants in these activities were, according to theamendments, not considered ‘‘employees’’. The second and most recent amendmentsto the Act, specifically Section 14(c), took place in 1986. As a result, workers withdisabilities are to be paid a ‘‘commensurate’’ wage according to their productivity(Whittaker 2005, 2008).

Since its last amendment in 1986, questions and concerns surrounding the equityof the legislation increased. ‘‘In 1994, further hearings were held and it was assertedthat the entire system of productivity-based sub-minimum wage rates wasinequitable and unworkable. The law, however, supported by employers of workerswith disabilities, was not altered’’ (Whittaker 2005: 3). It is noteworthy that in 1994and in 2001 (during the 103rd and 106th Congresses) there were initiatives to excludethe visually impaired (in practice, the blind) from the Act but these have notmaterialized (Whittaker 2005).

Nonetheless and in spite of the fact that SMW legislation was not amended, manystates have added restrictions to the implication of SMW, for instance, by allowingthis arrangement to be implemented only in sheltered workshops (Butterworth et al.2007).

Australia

Similar to the United States, the mechanism of SMW for employees with disabilitiesis not new to Australian law and policy (Australian Government 2006). Today,Australia has two systems of SMW for individuals with a disability. The first


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addresses ‘‘business services’’, previously termed ‘‘sheltered workshops’’ (i.e. thenon-competitive sector). The second is geared towards ‘‘Supported Wage System’’(SWS) (Australian Government 2006, http://www.workplace.gov.au/workplace/Programmes/EmployerIncentivesScheme/SupportedWageSchemeSWS.htm). Thesesystems have a different history and origin (Australian Government 2006).

SMW in competitive employment. Before 1994, employment of people withdisabilities for less than the minimum wage was permitted by way of ‘‘slow orinfirm worker provisions contained in awards, or slow worker permits under Stateindustrial relations legislation’’. These were not available for all and furthermorerelied on unreliable and invalid measures of work capacity (Australian Government2006: 347).

Changes in the aforementioned system started in 1990 when the Australiangovernment initiated a review of employment issues for people with disabilities. Thereview’s recommendations urged changes to the existing system for wagedetermination. As a result, one year later, Don Dunoon was hired by the governmentto ‘‘to develop an assessment process which determined fair and equitable wageoutcomes based on a uniform assessment of employees’ skills and productivecapacities matched to the requirements of the position’’ (Australian Government2006: 348). The ‘‘Dunoon Report’’ is the basis for the contemporary evaluationsystem in competitive employment settings, the SWS, which was developedcollaboratively with disability organization members and leaders. In 1994 the modelwas finalized and agreed upon by all parties (Australian Government 2006).

Legislation soon followed. The Workplace Relations Act (WR Act) of 1996 wasamended and ensured that

the AIRC [Australian Industrial Relations Commission] in performing itsdispute prevention and settlement functions, had regard to the need to provide asupported wage system for people with a disability. The WR Act was alsoamended to require that when the AIRC made an award or an order, it shouldensure that the SWS was provided for people with a disability whereappropriate. Furthermore, the list of allowable award matters under section89A(2) of the WR Act specifically included ‘‘rates of pay for employees underthe supported wage system’’. (Australian Government 2006: 349)

In 2005 the WR Act was amended. This new legislation is known also as ‘‘WorkChoices’’ and aims to create ‘‘a more flexible, simpler and fairer system of workplacerelations for Australia’’ (Parliament of the Commonwealth of Australia House ofRepresentatives 2005: 1). The Act established a new statutory agency called theAustralian Fair Pay Commission (AFPC) which replaced the former AIRC and isresponsible for dictating and modifying the general federal minimum wage andSMW arrangements for various groups, among them employees with disabilities(Cowling and Mitchell 2007).

Cowling and Mitchell (2007: 749) argue that

While the pre-Work Choices, Workplace Relations Act 1996 (Section 88B),provided that the AIRC must ensure that a safety net of fair minimum wages


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http://www.workplace.gov.au/workplace/Programmes/EmployerIncentivesScheme/SupportedWageSchemeSWS.htmhttp://www.workplace.gov.au/workplace/Programmes/EmployerIncentivesScheme/SupportedWageSchemeSWS.htm

and conditions of employment is established and maintained, the WorkChoices changes have removed ‘fairness’ from both the wage-setting objectives.The AFPC must now consider . . . economic criteria in their wage-settingdecisions.

These include ‘‘[p]roviding minimum wages for . . . employees with disabilities thatensure those employees are competitive in the labour market’’ (Cowling and Mitchell2007: 749).

In 2008, under the Rudd federal Labor government, The Workplace Relations Actof 1996 was amended once more – Workplace Relations Amendment (Transition toForward with Fairness) Act 2008 (Cth) – and sought to restrict the protectionsprovided by the Work Choices amendments to the WR Act. to non-employeeoutworkers in various industries (Rawling 2009).

On November 25, 2008 the Fair Work Bill was introduced into the House ofRepresentatives and on April 7, 2009 the Fair Work Act 2009 received royalassent (http://www.workplace.gov.au/workplace/Publications/Legislation/FairWorkBill.htm).

The Act establishes a new workplace relations system, Fair Work, which came intoeffect on July 1, 2009, and consists of the national tribunal, Fair Work Australia, andthe Office of the Fair Work Ombudsman (http://www.deewr.gov.au/WorkplaceRelations/NewWorkplaceRelations/Pages/ProgramInformation.aspx#keyfeatures).As of January 1, 2010, new minimum conditions – a safety net for employees – cameinto effect. The safety net comprises of 10 minimum employment conditions via the‘‘National Employment Standards’’ and of modern awards which replace the existingawards (http://www.deewr.gov.au/WorkplaceRelations/NewWorkplaceRelations/Pages/ProgramInformation.aspx#whatwillchange, http://www.fairwork.gov.au/Pay-leave-and-conditions/Conditions-of-employment/Documents/Fair-Work-Information-Statement.pdf).

SMW in non-competitive settings. In 2002, the Disability Services Act of 1986 wasamended by the Disability Services Amendment (Quality Assurance) Act. The latterassured that, as of 2005, only business services that fulfilled new quality assurancecriteria may be funded by the Australian government. A significant criterion assuredthat ‘‘the payment of award based wages as determined by a transparent assessmenttool or process’’ (Australian Government 2006: 351).

Israel

Adjusted Minimum Wage Regulations (Adjusted Wage for Employees withDisabilities Having Reduced Ability to Work Regulations 5762 – 2002) wereformulated in Israel in 2002 and derived from the Israeli Sub Minimum Wage Lawof 1987 (State of Israel Ministry of Justice and Ministry of Foreign Affairs 2008).These regulations were implemented for a trial period, four years after theircompletion, in November 1, 2006, by the Ministry of Industry, Trade and Labor(MOITAL). The regulations were amended on November 5, 2009 (Minimum WageRegulations (Wage Adjusted for Worker with a disability with Diminished WorkCapacity), (amendment) 2009).


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http://www.workplace.gov.au/workplace/Publications/Legislation/FairWorkBill.htmhttp://www.workplace.gov.au/workplace/Publications/Legislation/FairWorkBill.htmhttp://www.deewr.gov.au/WorkplaceRelations/NewWorkplaceRelations/Pages/ProgramInformation.aspx#keyfeatureshttp://www.deewr.gov.au/WorkplaceRelations/NewWorkplaceRelations/Pages/ProgramInformation.aspx#keyfeatureshttp://www.deewr.gov.au/WorkplaceRelations/NewWorkplaceRelations/Pages/ProgramInformation.aspx#whatwillchangehttp://www.deewr.gov.au/WorkplaceRelations/NewWorkplaceRelations/Pages/ProgramInformation.aspx#whatwillchangehttp://www.fairwork.gov.au/Pay-leave-and-conditions/Conditions-of-employment/Documents/Fair-Work-Information-Statement.pdfhttp://www.fairwork.gov.au/Pay-leave-and-conditions/Conditions-of-employment/Documents/Fair-Work-Information-Statement.pdfhttp://www.fairwork.gov.au/Pay-leave-and-conditions/Conditions-of-employment/Documents/Fair-Work-Information-Statement.pdf

Participants of SMW Program

The question regarding the nature and number of SMW participants involves twoissues: first, who is the targeted audience according to the legislation, and, second,who are the actual participants. In this section we will consider both issues.

The United States

According to the American FLSA, the definition of a worker with a disability isdependent on the particular job being performed, and the fact that an individual’searning or productive capacities at that particular job are diminished on the groundsof a physical or mental disability. The FLSA provides examples of such disabilities:blindness, mental illness, mental retardation, cerebral palsy, but also conditions suchas alcoholism and drug addiction (Whittaker 2005, BBI 2008).

Whittaker (2005: 6) argues that ‘‘Section 14(c) of the FLSA is narrowly focused. Itdeals only with workers who, because of a disability, are deemed to have theirproductivity (for the particular type of work in which they are engaged) reducedbelow that of non-disabled workers.’’ Hence, the FLSA’s definition is a functionalone, which addresses a restriction in the economic arena.

The FLSA addresses all employment settings including work activities centersand workshops (Whittaker 2005, BBI 2008). However, in practice, 95 per cent ofSMW employees in the United States are employed in sheltered workshops,which are non-competitive work settings (US GAO 2001). This suggests thisprogram is a residual mechanism that is fit to serve individuals who otherwise willnot participate in the labor market (US GAO 2001, Morris et al. 2002, Blanck et al.2003).

There are approximately 425,000 persons with disabilities employed under Section14(c) programs in the United States (Butterworth et al. 2007), mainly employed inschools, hospitals, and community rehabilitation programs (Inge et al. 2009). In2007, there were about 22 million working-age (aged 21–64) people with disabilitiesin the United States (Bjelland et al. 2008).

Data on SMW participants’ disability shows that three-quarters have develop-mental disabilities, followed by severe physical and sensory disabilities (14%) andmental illnesses (12%) (US GAO 2001). However, Butterworth et al. (2007) arguethat the number of recipients of sub minimum wage can only be estimated since thereare limitations in program records and data collection.

Australia

Australia differs from the United States as it operates two different SMW systems foremployees with disabilities. A definition of an employee with a disability for thepurpose of wage adjustment is provided by the WR Act of 1996, but only in relationto competitive employment. According to the Act, employees with disabilities arethose who are eligible, or are potentially eligible, for the Disability Support Pension(DSP) under the Social Security Act 1991 (Parliament of the Commonwealth ofAustralia House of Representatives 2004). This definition is a medical one, whichrelies on proven pathology and dysfunctions.


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Similar to the trend in the United States, pro-rata mechanisms for wages are usedpredominantly in non-competitive employment. The SWS, which evaluates employ-ees in open employment served approximately 5,609 people in 2006–2007 (AustralianGovernment 2007).

In 2006 the Association of Competitive Employment (ACE) noted that more than80 per cent were reported to be individuals with mental illnesses or developmentaldisabilities. The non-competitive arena consists of approximately 17,500 people witha disability, employed by 224 business services (Australian Government 2006). Thetotal number of working-age population (15–64) that reported having a disabilitywas estimated to consist of 2,238,258 individuals in 2003 (Mavromaras et al. 2007).

Israel

The Israeli Minimum Wage Regulations (Wage Adjusted for Worker with aDisability with Diminished Work Capacity) of 2002 define a worker with adisability as

a worker with a physical, emotional or mental disability who is a person withdisability as the term is defined in section 5 of the Equal Rights for Persons withDisabilities Law, 5758–1998 . . . ; a person with a permanent or temporaryphysical, mental or intellectual – including a cognitive – impairment, due towhich his functions are substantively restricted in one or more main spheres oflife.3

While in the United States and in Australia, the definition of a disability implies thatthe presence, nature and extent of the disability needs to be formally recognized, theIsraeli legal definition is not bound to formal criteria, thus potentially encompassinga larger population.

The adjusted minimum wage regulations in Israel do not apply to individuals insheltered workshops. These individuals are considered ‘‘rehabilitees’’, not ‘‘employ-ees’’, and are under the responsibility of the Ministry of Welfare and Social Services(State of Israel, Ministry of Justice and Ministry of Foreign Affairs 2008). Thischaracteristic signifies a central difference between Israel and the other two countriesthat focus primarily on sheltered employment.

MOITAL data show that between December 2006 and May 17, 2009, 2,129requests for wage adjustments were received. During this period, 1,812 employeeshave undergone a wage assessment process (State of Israel, MOITAL 2009a). In2009, MOITAL estimated that there are approximately 10,000 individuals withdisabilities employed in the business sector only who need to undergo wageassessments (State of Israel, MOITAL 2009b).

The total number of working-age people (20–64) with disabilities in Israel wasestimated to be 643,000 in 2006 (State of Israel, MOITAL 2009c). Although SMWpolicies serve a small number of working-age people with disabilities in each country,the growing numbers of participants in Israel suggest these policies are perceived as asolution for a relatively large percentage of the working-age disability population.

Data from June 2008 show the largest group of employees who were wage-assessed in Israel had psychiatric disabilities (42.4%), followed by mental retardation


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(32.9%) (State of Israel, MOITAL 2008a). Both of these types of disabilities arecommonly categorized as severe and are, in other Western countries, typically foundin sheltered employment settings (Twamley et al. 2003, Migliore et al. 2007). In theUnited States, it was estimated that approximately 74 per cent of the workers insheltered workshops under the SMW arrangement who are paid have mentalretardation or another developmental disability as their primary impairment (USGAO 2001).

Service Delivery System

In this section we discuss key elements of each program; namely, how the assessmentis initiated, the role of the assessor, who is assessed, and how the wage is determined(see Table 1).

The Initiator

In the American system it is the responsibility of the employer to obtain a ‘‘SpecialCertificate’’ from the US Department of Labor (DOL) (US Department ofLabor, Employment Standards Administration, Wage and Hour Division 2008).Likewise, in the Australian Business Service, employers request evaluation ofa worker (http://www.crsaustralia.gov.au/about_the_business_services_wage_tool.htm#when_to_refer; http://www.crsaustralia.gov.au/cgi-bin/bswt.pl). For employeesin open employment by way of SWS, the application is submitted by either theemployer or an Australian government employment service provider (http://www.jobaccess.gov.au/JOAC/ServiceProviders/Assisting_employers/Financial_help_and_wages/Supported_Wage_System/).

In contrast, in Israel, requests for adjusted minimum wage are filed by theemployee or by someone who is acting on his/her behalf. This does not necessarilymean a legal guardian (State of Israel, MOITAL 2009d). The employee (or his/herlegal guardian) is the one who is notified in two separate letters, one which informshim/her of work capacity according to the assessment (for example 32%, 75%); theother which informs the employee of the wage he/she is entitled to according tohis/her work capacity (State of Israel, MOITAL 2009e). The November 2009amendments stress that the employer will be notified of the latter (State of Israel,MOITAL 2008b).

The Roles of the Assessor and what is being Assessed

In the United States the employer performs the SMW assessments. These consist ofdetermining the employee’s productivity while using validated tools and workmeasurement methods. The employer needs to establish the criteria that best reflectthe productivity of an average worker. It is recommended the employer will measureand average the performance of at least three non-disabled workers (US Departmentof Labor, Employment Standards Administration, Wage and Hour Division 2009).The vast majority of the outcomes address the quantity of work. However, quality isalso marginally considered (Haimowitz and Soffer 2009). Employers are required tofile written assurances of semi-annual wage reviews (Morris et al. 2002).


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http://www.crsaustralia.gov.au/about_the_business_services_wage_tool.htm#when_to_referhttp://www.crsaustralia.gov.au/about_the_business_services_wage_tool.htm#when_to_referhttp://www.crsaustralia.gov.au/cgi-bin/bswt.plhttp://www.jobaccess.gov.au/JOAC/ServiceProviders/Assisting_employers/Financial_help_and_wages/Supported_Wage_System/http://www.jobaccess.gov.au/JOAC/ServiceProviders/Assisting_employers/Financial_help_and_wages/Supported_Wage_System/http://www.jobaccess.gov.au/JOAC/ServiceProviders/Assisting_employers/Financial_help_and_wages/Supported_Wage_System/

Table

1.SMW

intheUnited

States,AustraliaandIsrael:points

ofcomparison

TheUnited

States

Australia

Israel

Legalbasis

FairLaborStandardsAct

(FLSA)of

1938

TheWorkplace

Relations(W

R)Act

of1996;The

DisabilityServices

Amendment(Q

uality

Assurance)Act

2002

Minim

um

WageRegulations(W

age

Adjusted

forWorker

withadisability

withDim

inished

Work

Capacity),

(amendment),2009

Targeted

population

(inpractice)

Non-competitiveem

ploymentworkers

Competitiveandnon-competitiveem

ployment

workers(differentsystem

s)Competitiveem

ploymentworkers

Theassessm

entprocess

Theinitiator

Theem

ployer

Theem

ployer

oranAustraliangovernment

employmentserviceprovider

Theem

ployee

Theassessor

Theem

ployer

Aprofessional;

Innon-competitiveem

ployment–

JobCapacity

Assessors

(psychologists

orsocial

workers,workingfortheCommonwealth

RehabilitationService

Incompetitiveem

ployment–atrained

and

accredited

wageassessor

Aprofessional;anOTorarehabilitative

psychologist

Whatisassessed

Productivity

Innon-competitiveem

ployment–

productivityandcompetency

oftheem

ployee

Incompetitiveem

ployment–productivity

Mainly

productivity

Wagedetermination

Whodetermines

the

wage?

Theem

ployer

Theassessor

TheDirectorofthein

chargeunitin

MOIT

AL

Basisforwage

determination

Thecustomary

orprevailingwagein

thelocalcommunityforan

experiencedworker

withouta

disabilitywhoperform

sessentially

thesametype,

quantity,andquality

ofwork

Innon-competitiveem

ployment:theprevailingwage

per

hour;

Incompetitiveem

ployment:

‘‘Theapplicableminim

um

wagethatcoversthesame

typeofwork’’

Themandatory

minim

um

wage

Wagerates

Adirectpercentageoftheperson’s

productivityrate,rangingfrom

1per

centto

100per

cent

Innon-competitiveem

ployment:afixed

form

ula;in

competitiveem

ployment:A

directpercentageof

theperson’sproductivityrate,startingfrom

10per

centoftheprevailingwageorthemandatory

minim

um

weekly-w

age.

Thescale

ranges

from

10

per

centto100per

cent

Six

levelsofwage:

rangingfrom

30per

centto

80per

centoftheminim

um

wage.


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While the American system focuses on productivity, the Australian system forassessing adjusted wage in a similar population (non-competitive employmentworkers) stresses the productivity as well as the competency of the employee. This isevident, for instance, in the description of the Business Services Wage Tool (BSWT),which is a recommended assessment kit developed by the Australian govern-ment for the purpose of wage assessments in non-competitive settings (http://www.crsaustralia.gov.au/about_the_business_services_wage_tool.htm).

Unlike the American system, assessments utilizing the BSWT are performed by aprofessional entity, namely ‘‘Job Capacity Assessors’’, commonly psychologists orsocial workers, working for CRS Australia (the national vocational rehabilitationagency) (Haimowitz and Soffer 2009). Both productivity and competency areevaluated by way of comparisons; the productivity level of the employee is comparedto ‘‘an expected productivity benchmark’’ (CRS Australia 2007: 8), which could be anon-disabled employee. The employee’s level of competency is compared to ‘‘a statedcompetency standard’’ (CRS Australia 2007: 7). Each assessment is supposed to bereviewed within three years; however this is subject to change upon request of theemployee or employer (Haimowitz and Soffer 2009).

Assessments in competitive employment by the SWS aim to assess ‘‘productivecapacity’’ (Australian Government 2006: 344), that is, ‘‘assessment of the SWSworker’s output on the job compared with that of co-workers in the workplace whoundertake similar work and who receive the full minimum wage for the job’’. Inother words, the goals of this assessment are similar to the one in the United States,namely to determine productivity. However, different from the United States, pre-assessment wage procedures are taken to verify that the employee would be unableto work at the full wage level. The Australian system then employs means of trainingand accommodations, that is, ensures that the person is given some support toachieve a higher wage prior to conducting the actual wage assessment (Haimowitzand Soffer 2009).

The productivity of the worker is determined by ‘‘a trained and accredited wageassessor’’ (Australian Government 2006: 344). Such an assessor is qualified andtrained in an assessor training program and has acquired at least two years ofexperience in the area of disability employment. The assessor works in collaborationwith the employee and employer who are full partners in determining thecomponents of the job and what qualifies as a basic level of performance. Thewage assessment is reviewed annually or earlier if proven necessary. Employersreceive a fiscal incentive for participating in the SWS (Haimowitz and Soffer 2009).

Section 5 of the Israeli regulations concerns ‘‘work capacity’’ assessments for wagedetermination. These can be performed by a senior public civil servant at MOITAL(the director of the unit in charge) or by ‘‘any medical entity or any entity engaged indiagnosing capacity for work as instructed by the Director’’.4 In practice, wageassessments in Israel are aimed primarily to measure productivity (tfuka) (see http://www.moital.gov.il/NR/exeres/86CE789D-1B45-4758-8F96-FADF7A13ADC1.htm).

Assessments are performed by two different entities, the Loewenstein Rehabilita-tion Hospital and the Company for Rehabilitation Projects, Ltd., also known as‘‘Shel’’, according to geographic regions. The Loewenstein Rehabilitation Hospital’sstaff consists of occupational therapists (OT) and rehabilitative psychologists whouse tools from disciplines (for example contextualized functional tests and


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http://www.crsaustralia.gov.au/about_the_business_services_wage_tool.htmhttp://www.crsaustralia.gov.au/about_the_business_services_wage_tool.htmhttp://www.moital.gov.il/NR/exeres/86CE789D-1B45-4758-8F96-FADF7A13ADC1.htmhttp://www.moital.gov.il/NR/exeres/86CE789D-1B45-4758-8F96-FADF7A13ADC1.htm

personality tests, which assess psychological characteristics and skills) for thepurpose of the assessments (Loewenstein Rehabilitation Hospital 2009). Shel’sassessors are OTs and rely mainly on the discipline’s set of tools and knowledge(Company for Rehabilitation Projects, Ltd. 2009). However, both entities conducttheir evaluations in comparison to a non-disabled employee. Unlike in the Americanand the Australian systems, there are no periodic reviews of the worker’sproductivity (Minimum Wage [Adjusted Wage for Employees with DisabilitiesHaving Reduced Ability to Work] Regulations 5762 – 2002).

Furthermore, it is important to indicate that in Israel both assessing teams areinstructed to provide recommendations for accommodations and training, however,these do not affect the productivity measures or the wage determination process, andcannot be ‘‘forced’’ on the employer. Thus, these stand only as suggested recom-mendations for the future use of the MOITAL.

Wage Determination

In the United States and in Australia the wage is determined by the assessors. In theUnited States the employer, who assesses the worker’s productivity, needs todetermine the normative or prevailing wage in the local community for anexperienced non-disabled worker who does the same type, quantity, and quality ofwork. The assessed percentage of productivity is equivalent to the percentage of theminimum wage for which the employee is eligible. For example, if a person’sproductivity is assessed to be 25 per cent, his/her wage will be a quarter of theprevailing minimum wage (Haimowitz and Soffer 2009).

In the Australian Business Service the wage is calculated according to a fixedformula5 that takes into account the competency and productivity levels of theemployee and the prevailing wage per hour. In the SWS the employee’s wage isdetermined in comparison with the ‘‘applicable minimum wage that covers the sametype of work’’ (Australian Government 2006: 354), thus ‘‘an appropriate minimumwage for an employee with a disability would be one that reflects the lesser capacityof the employee relative to other employees doing the same job’’ (AustralianGovernment 2006: 354). As in the American system, the wage is proportional to theproductivity level of the employee (for example, 80% productivity is translated to80% of the prevailing wage) and consists of 10 levels of wage, which range from 10per cent to 90 per cent in even 10 per cent intervals. The assessment for determiningthis final and adjusted wage is conducted during a trial period when the employeeearns a mandatory minimum weekly wage that is determined and updated timely bythe Australian Fair Pay Commission (Australian Government 2006, Haimowitz andSoffer 2009). The mandatory minimum weekly wage becomes the final wage in caseswhere a 10 per cent wage is determined that is lower than the mandatory minimumweekly wage (Australian Government 2006).

In contrast, and in order not to compromise the objectivity of the assessor, Israelhas insured a separation between the assessing process and wage determination.Although wages are dictated by the regulations according to work capacity, theconversion of work capacity scores into wages are done by the director of the unit incharge in MOITAL. The system of conversion is the following (see Minimum WageRegulations (Wage Adjusted for Worker with a disability with Diminished Work


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Capacity), (amendment) 2009, http://www.moit.gov.il/NR/exeres/490D8E3B-2A40-432F-B5BE-59CFF8C02355.htm):

1. For a work capacity more than 19 per cent and no more than 30 per cent lessthan the normal work capacity – 30 per cent of the minimum wage.


3. For a work capacity more than 40 per cent and no more than 50 per centless than the normal work capacity – 50 per cent of the minimum wage.


5. For a work capacity more than 60 per cent and no more than 70 per centless than the normal work capacity – 70 per cent of the minimum wage.


Therefore, workers with work capacity that is 80 per cent and higher will receive thefull minimum wage.

Individuals who have a work capacity that is lower than 20 per cent are covered bythe Equal Rights of Persons with Disabilities Employed as Rehabilitated Persons(Temporary Provision) Law of 2007 and are considered ‘‘rehabilitees’’ rather thanemployees and thus are excluded from the labor market and labor protective laws(State of Israel, Ministry of Justice and Ministry of Foreign Affairs 2008).

While the floor wage in the United States is set at 1 per cent of the prevailing wage,in Israel it is set at one-third of the minimum wage. In Australia the minimum wagein open employment is 10 per cent of the prevailing wage or the mandatory minimumweekly wage. In non competitive employment, no such floor exists (http://www.crsaustralia.gov.au/about_the_business_services_wage_tool.htm#scoring).

In summary, in the United States and in Israel the assessment consists of asnapshot of productivity. In Australia the SWS’s pre-assessment of functional wantsserves as a baseline for both establishing reduced productivity and for tailoringaccommodations and training that can boost productivity and consequently wages.In the Australian SWS, the employee, employer and assessor are likened to partnersand are all active agents which mutually mold the assessment process and agree onits outcomes. The role of the employee is marginalized in Israel and annihilatedalmost completely from the American system. In the United States the employer isgranted power over the process as he/she plays a central role in all stages of theassessment. In Israel the assessors are the most influential players in the process.

These differences also tap into the role of the state and the perception of the state’sresponsibility generally. In the United States the state’s role is minimal andencompasses the issue of certification and supervision. The latter was found lackingand insufficient (see Butterworth et al. 2007). In Israel the role of the state is alsorestricted as the operation of the policy is privatized. The in-house unit consists ofmerely three employees, one of whom is not a civil servant. A private administrativecompany manages the process. The two assessment entities are businesses, notgovernment employees or private professionals trained by the government.Furthermore, in contrast to Australia, there is no standardization as to the


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http://www.moit.gov.il/NR/exeres/490D8E3B-2A40-432F-B5BE-59CFF8C02355.htmhttp://www.moit.gov.il/NR/exeres/490D8E3B-2A40-432F-B5BE-59CFF8C02355.htmhttp://www.crsaustralia.gov.au/about_the_business_services_wage_tool.htm#scoringhttp://www.crsaustralia.gov.au/about_the_business_services_wage_tool.htm#scoring

qualifications of these assessors. The Israeli government’s role is mainly to supervisethese sub-contractors and to convert the productivity levels into wages.

Program Effectiveness

The United States

Studies on SMW policies in the United States are scant. In 2001, the Department ofLabor (DOL) Inspector General’s Report and the GOA’s reports raised manyconcerns about the ways the data were collected, and the accuracy, validity andreliability of the data (Butterworth et al. 2007). Since then, monitoring of the dataimproved, but only few studies were conducted. A 2005 survey of shelteredworkshops shows that whereas approximately 80 per cent of the clients wereemployed according to 14(c), less than 40 per cent received appropriate wages. Ingeneral the survey highlighted the extreme violations in the system (US Departmentof Labor, Employment Standards Administration Wage and Hour Division 2005).

The little research from the United States implies that SMW policies fail tofacilitate greater earnings, integrated, competitive or gainful employment. Studiesdid not examine the effect of SMW on employment rates of individuals withdisabilities (Butterworth et al. 2007).

The US GAO (2001) found that more than half of the participants in the programearn less than the federal minimum wage, implying that this policy fails to promotean income increase. A recent national survey of community rehabilitation programsthat hold Special Wage Certificates found that less than 10 per cent of the staffreported that their client earns at least the minimum wage (Inge et al. 2009). Thisstudy also found that community rehabilitation programs generally do not promoteintegrated employment. Other studies showed that SMW does not promote mobilityinto gainful or competitive employment (US GAO 2001, Blanck et al. 2003, Boeltziget al. 2006).

Australia

Data on the SMW systems in Australia are scant, while only one central programevaluation was conducted in Australia (ACE 2006). The study, conducted by KMPGConsulting (see Bill et al. 2004, ACE 2006) focused on the SWS program, whileanalyzing data from July 1994 to July 2000 on 3,675 participants. The evaluationfound that only 5.1 per cent left the program for positive reasons (for exampleadvancing to a better job), whereas approximately 27 per cent who left the programdid not have a new job. Compared to sheltered employment, ‘‘most SWS jobs averaged20.5 hours a week and just over $6.00 an hour at an averaged assessed productivityrate of 53.5 percent at a time when the minimum wage was between $10.00–$11.00 andthe average wage in sheltered workshops was $1.00–$2.00’’ (ACE 2006: 7).

Israel

The Israeli adjusted minimum wage system is relatively new, however someevaluative data is available. In 2008 the MOITAL reported findings concerning


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1,215 individuals with disabilities who have undergone the process of evaluation andwage determination. The two major wage groups were 75 per cent of the statutoryminimum wage (38.9%) and 50 per cent of the statutory minimum wage (38.8%).The full minimum wage was granted for approximately 9 per cent of the referrals,while 13.5 per cent were determined eligible for one-third of the statutory minimumwage (MOITAL 2008c).

In a survey conducted with 610 individuals, approximately 10 months after theiradjusted minimum wage evaluation was completed, 81 per cent reported working atthe same job they worked in when they underwent the evaluation, 10 per centreported being employed at another job, and 9 per cent reported that they were notworking. As for wage, 47 per cent reported no change in wage. Moreover, one-thirdreported an increase in earnings as a result of the evaluation process. Relatively few(7%) reported a decrease in income, and 13 per cent of respondents replied that theydo not know (MOITAL 2008c).

Discussion

The SMW is based on the assumption that the ability to pay workers with disabilitiesa lower wage according to their productivity will result in employmentopportunities that they would not otherwise have. As mentioned above, SMWpolicies are highly controversial; those that are against them argue that theycounter the meaning of social justice and also that society has to provide ‘‘real workfor real wages’’. Supporters claim that wage should be a function of productivity,hence, people with disabilities who produce less should be paid less. Using Rivlin’s(1971) rational policy analysis, we compared SMW in respect to participants,types of programs, delivery systems and outcomes in the United States, Australiaand Israel. Our analysis emphasizes the complex reality that surrounds SMWpolicies and the ways through which each country chose to deal with these salientissues.

The comparison points out that the three countries differ in terms of theemployment settings (i.e. competitive versus non-competitive) of the participants. Inthe United States the participants are employed in non-competitive settings, in Israelthe participants are employed in competitive settings, while in Australia two separateprograms address both settings. In practice, in all countries SMW currentparticipants are primarily persons with psychiatric or intellectual disabilities, thatis with severe disabilities. Compared to Australia and Israel, the US policy tends tominimize government’s regulation in the labor market. Therefore, SMW is perceivedas an exceptional solution, just for those incapable of working in regular jobs(mainly sheltered industries). Australia and Israel tend to allow more governmentintervention, implying that SMW is a valid policy to integrate people with severedisabilities in competitive employment settings.

These ideological and economic differences in government regulation appear alsoin the service delivery systems. In the United States, the certified employer is theinitiator of the process, the assessor and the one who determines the SMW. Australiahas a similar initiator (the employer or an employment service); however, theassessment and the determination of SMW is conducted by a professional ofthe allied health professions. The Israeli system marginalizes the employer’s role; the


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initiator is the person with disabilities, the assessment and the determination ofSMW is carried out by a professional outsourced agency. The different approachestoward SMW are observed in the way wage is calculated. In the United States SMWis a direct percentage of the person’s productivity rate (starting from 1%), inAustralia it is the same (but starting from 10%) or a result of a fixed formula, and inIsrael it is a six-level ladder (starting from a third of the minimum wage).

A closer look at the findings, however, reveals that the documented differences arenegligent. They are probably products of different cultural, economical and politicalsystems, but they are merely variants of the same mechanism. The central role ofthe employer in the United States is to adhere to neoliberal capitalistic values inAmerica (see for example Russel 2002). As noted earlier, Australia and Israel allowmore government regulations and procedures aimed to protect the employmentstatus of people with severe disabilities (see Lindsay 1995–96, Rimmerman et al.2005).

When SMW policies are stripped off of these differences, one begins to see that theoverarching ideology that fuels SMW is the same in each of the examined countries;they are all marginal policies that handle a pittance of participants (425,000 in theUnited States, 17,500 in the non-competitive sector and 5,609 in the competitivesector in Australia, and approximately 2,000 in Israel) all perceived as ‘‘unproductivepopulations’’, and viewed as in need of protection from potential exploitation.Moreover, the United States, Australia and Israel exercise the same tools to evaluate,assess, and quantify medical deficits and impairments which depart from commonpractices of the labor market. The medicalization of disability in Australia and Israelis particularly evident. The system is laden with psychologists, occupationaltherapists and job placement workers. Although we were able to map the legalunderpinnings of SMW policies in each of the examined countries as well as toreview the execution of these policies, the lack of research concerning theeffectiveness of SMW policies is most troubling and hampers our ability to draw afirm conclusion as to whether they truly serve their intended purpose. Scant datafrom the most experienced country, the United States, imply that the system does notachieve its intended outcomes; however the validity of the data are also questioned.The data from Australia, although too few to draw conclusions, do not implypromising outcomes. Other anecdotal information, published for example in thepress, also reflect the confusion and vagueness that surround the effectiveness ofSMW. Are SMW policies a mere exploitation of workers with severe disabilities ordo they truly create employment opportunities for those who would otherwise havebeen unemployed? It seems that all three countries are still debating these issues. Butmost importantly, our analysis stresses the importance of rethinking SMW policieson a national and international level. To do so, systematic and valid data must becollected, analyzed and compared, and clear outcomes must be defined. These mustaddress economic but also psycho-social indicators as well as objective andsubjective ones. The interplay between SMW policies and other efforts to promotethe employments of persons with severe disabilities must also be examined.Moreover, more research is needed in order to validate and standardize themeasures for SMW assessments.

We strongly believe that current and future public policies should be based onviewing disability as a natural part of human experience that in no way diminishes


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a person’s right to fully participate in all aspects of life (Silverstein 2000). Only aftera thorough evaluation of the effectiveness of SMW policies has been conducted, willwe be able to determine whether SMW contributes to this belief or hampers it.

Notes

1. These regulations were implemented for a trial period, four years after their completion, in November

1, 2006, by the Ministry of Industry, Trade and Labor (MOITAL). The regulations were amended on

November 5, 2009 [Minimum Wage Regulations] (Wage Adjusted for Worker with a disability with

Diminished Work Capacity), (amendment), 2009.

2. In Israel, some civil rights activists supported the Adjusted Minimum Wage Regulations (Wage

Adjusted for Worker with a Disability with Diminished Work Capacity) of 2002, arguing that the

alternative of rejecting them is less desired (Mor 2009).

3. Minimum Wage Regulations, literal (non-legal) translation for internal use by MOITAL.

4. Minimum Wage Regulations, literal (non-legal) translation for internal use by MOITAL.

5. Competency % þ Productivity %)/2 * the prevailing wage rate per hour.

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