Jottings By An Employer's Lawyer

Wednesday, January 30, 2008

Hurting by Helping? The Law of Unintended Consequences

If the Democratic party gains control of the federal government -- the White House, the House and a veto proof Senate (60 votes), many in the employment and labor law community anticipate a bevy of new laws. For a preview as reported by the good professors at the Workplace Prof Blog, check out House Discusses ADA Restoration Act and the Civil Rights Act of 2008.

Clearly the intent of the authors of those and similar bills is to help either employees in general or at least certain groups of employees. But good intentions don't always mean good results. That's the point of the article in the Freakonomics column in last week's NYT, Red-Cockaded Woodpecker - Endangered Species.

The employment law example was the Americans with Disabilities Act:
The economists Daron Acemoglu and Joshua Angrist once asked a similar question: How did the A.D.A. affect employment among the disabled?

Acemoglu and Angrist found that when the A.D.A. was enacted in 1992, it led to a sharp drop in the employment of disabled workers.

Clearly not what was intended. The reason -- "employers, concerned that they wouldn’t be able to discipline or fire disabled workers who happened to be incompetent, apparently avoided hiring them in the first place. " For more you can check out their paper, Consequences of Employment Protection? the case of the Americans with Disabilities Act.

Obviously, you can argue that such actions were also illegal, but it doesn't change the impact.

Rarely are things as simple as they seem.

A hat tip to Will Schendel at the Alaska Employment Law Blog.

Update (12.27.08): For a new article suggesting that the above problem may be a result of the statistics themselves see, The Employment Rate of People With Disabilities at BeSpacific.

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There are a few problems with the economists' conclusions:

(1) They assume that the passage of the ADA was the CAUSE of the drop in employment of disabled workers. They further provide an assumed RATIONALE for that assumed cause-- let's wait a minute here. There are myriad other (substantial) factors, other than the passage of the ADA, that could be the cause of decreased employment of employees with disabilities.

(2) The "impact" of legislation is more likely due to its ENFORCEMENT, than to its mere passage. In the case of the ADA, enforcement by the federal courts has been largely adverse to disabled employees. The courts have narrowed the meaning of "disability" to the point that persons with serious medical problems (e.g. persons fired because of early stage diabetes), or persons who control their medical problems too well (e.g. persons with late stage diabetes who responsibly regulate their insulin) fall outside the protections of the law. Further diminishing enforcements of rights, the Administration has cut funding to the EEOC.

The answer is to increase legislation targeted to fix dilutions of individual rights (e.g. pass the ADARA), AND to increase enforcement of that legislation (e.g. increase funding to EEOC).

The implicit solutions, from the authors cited in this post, are that (1) we should do nothing; or (2) we should leave it to the private sector or the "market" to enforce individual rights. These solutions are unacceptable, given the crisis of corporate abuse of disabled employees. A large percentage of disabled persons who ARE hired are later treated horrifically when their conditions present financial barriers (e.g. scheduled surgery) or perceived financial barriers (e.g. perceived lack of productivity) to employers.
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