All 171,000 federal contractors must now meet a seven percent hiring quota for the disabled. This quota doesn’t just apply to the job at hand, or to the corporate division responsible for the contract, but to every individual division in the company. This means that if the federal government hired Caterpillar to build a new office building, about 8,750 out of its 125,000 employees must be legally disabled.
The DoL goes to great lengths of rhetorical ju-jitsu to argue that this is not a “quota.” According to their press release, the regulation is merely a “benchmark” which strengthens “accountability and record keeping requirements, enabling contractors to assess the effectiveness of their recruitment efforts” issued by a government agency with the power to cancel any federal contract at will.
Who does this regulation help? The taxpayer will be saddled with higher costs and lower quality contractors as competition for contracts shrinks. Businesses will either be forced out of the public contractor market, or have to overhaul their payroll with presumably less productive employees. In the process, current employees at private contractor companies may lose their jobs as companies reconfigure their work force to meet the quota. Finally, any newly employed disabled individuals will have a new handicap – the knowledge that their employers value them primarily as tokens to comply with labor regulations.
The obvious winners are the bureaucrats and the elected officials who appoint them. Politicians who support the DoL’s actions can promote themselves as champions of the downtrodden for mandating increased employment of the handicapped, regardless of actual results.
But the biggest winners are often less obvious. A rarely understood axiom of public policy is that regulating agencies are almost always manipulated by the most powerful businesses they were created to regulate. We see this when powerful bankers are placed in charge of the Federal Reserve and financial regulatory institutions.
Wealthy companies have a huge incentive to invest heavily in the political careers of key regulators and politicians. These politically powerful have terrific opportunities to shape regulations in ways that are most burdensome to their less-politically connected competition. In the case of the DoL’s disabilities mandate, the quota is so high that most companies cannot possibly comply, especially start-ups and smaller entrepreneurs. The powerful companies will have the pull to dictate to the DoL what will count as a ‘disability’ and how and when to grant exemptions from the mandate. Essentially, the DoL will make compliance almost impossible for all, then tailor loopholes for the few.
Of course, The DoL and other government agencies they work with are not subject to the disability quota.
The DoL’s Director of Federal Contractor Compliance, Patrician Ann Shiu, has been an active cheerleader for the new decree. “We think these two rules are really important in terms of ensuring that people with disabilities and protected vets get a real chance at equal employment opportunity,” commented Ms. Shiu.
Perhaps Ms. Shiu should demonstrate the depth of her commitment to her department’s new quota by stepping down from her own position. Surely there is a qualified worker with a disability that can be given her job.