Dr. Edwards is Associate Professor of Economics at Montana State University-Northern.
The Americans with Disabilities Act, which took effect in January 1992, attempts to prevent discrimination in employment against the disabled and to guarantee access to “public” (i.e., business) accommodations. Providing “access” to disabled employees quickly began to generate costly adjustments in physical facilities by businesses all over the nation. Within little more than a year, over 9,000 legal complaints had been issued under provisions of the law by individuals who felt that they had been discriminated against or denied physical access to places of business.
Most members of the academic and intellectual class have welcomed the ADA as a landmark piece of legislation. Complaints by businesses about the costliness of the Act have been dismissed as self-serving. Warnings by economists, based on more systematic data and estimates, have simply been ignored, washed away in a pious river of emotional arguments. The lack of wheelchair ramps, we are told, indicates that “society cares nothing for the disabled”; for the sake of equality we must provide access for the disabled, “whatever the cost.”
The emotive, anti-business argument used to justify the ADA completely mischaracterizes the treatment of the disabled by producers and employers in the market economy. True, not every factory, office, or store has wheelchair ramps, nor have businesses adjusted their physical facilities to accommodate all of the special needs of people with various disabilities. Forcing employers to readjust their facilities every time a person with a different disability is hired would wreak financial havoc if tried. As a matter of simple economics, physical facilities are best designed around the function of ordinary people. Other customers and clients must make personal adjustments.
But this does not mean that businessmen are indifferent to the needs of the disabled. Such modern innovations as wheelchairs, prosthetics, hearing aids, and eyeglasses are supplied by business entrepreneurs to meet the specific set of needs of a specific set of market demanders. Such products narrow the effective differences between individuals with disabilities and other persons, giving the disabled more access to society and social institutions, and in particular, making the disabled more employable. Industries making such products themselves generate additional employment and add to aggregate real output and income.
Few of these good works resulted from any specific altruistic impulse. Instead, the businessmen who provide such products do so out of self-interested desire for profits. But the genius of the competitive market system, as Adam Smith pointed out, is that it motivates people seeking their own self-interest (as most of us do most of the time) to learn about and supply the needs and desires of others. In the resulting voluntary market transactions, both parties gain by obtaining something they want more than what they traded to the other in exchange.
Consider, in contrast, the effects of the ADA. While it certainly makes some disabled persons better off, it reduces the net earnings of employers who must, under threat of coercion, make costly adjustments to accommodate the disabled. In addition, reduced earnings of firms throughout the nation mean that aggregate employment must fall relative to its prior level or growth trend. Reduced aggregate employment means reduced aggregate real output and income. Indeed, we may already have experienced this decline.
Perhaps worst of all, discrimination against the disabled may even be increased, rather than reduced, contrary to the intent and despite the penalties of the act. This result follows because the ADA, in contrast to the voluntary market provision of products aimed at reducing disability impairment, increases the disadvantage of disabled persons relative to others being considered for employment, by adding to the costs incurred by firms employing a disabled person.
Suppose you were a business executive considering two applicants of equal skill for a position that pays $25,000 annually. One of the applicants has a disability. Hiring him would cost your firm an additional $10,000 in legally mandated adjustments to the workplace. Which applicant would you hire?
It seems likely that disabled applicants will often either not be hired, or hired only at salaries low enough to offset the prospective additional costs they generate for the firm.
The ADA is a perfect example of the harmful character of coercive morality legislation that harms society at large without even benefiting, on net, those it seeks to help.