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.