In our earlier submit we discovered that, on the whole, individuals with disabilities take part within the labor market at considerably decrease charges, and that they’re much extra more likely to be unemployed. Regardless of these patterns, we discovered that the labor power participation of staff with disabilities rose noticeably following the pandemic. A related query then is how earnings of staff with disabilities evaluate with staff with out disabilities. On this companion submit we examine variations in weekly earnings for staff with and with out disabilities. We discover that staff with disabilities earn significantly lower than staff with out disabilities. Moreover, with few exceptions, their earnings have remained roughly fixed in actual phrases because the pre-pandemic interval.
Employees with Disabilities Earn 20 P.c Lower than Employees With out Disabilities
Weekly earnings (actual), {dollars}
The chart above exhibits that since January 2019, staff with disabilities have earned about $1,000 per week in 2025 {dollars} after adjusting for inflation. This quantity has remained comparatively fixed over time, rising or falling solely barely. That is four-fifths of the $1,250 per week in actual phrases earned by staff with out disabilities, which additionally remained flat throughout this era. The exception was the interval from Could 2020 to September 2021, when earnings of staff with disabilities skilled a short-lived enhance to as excessive as $1,107 per week (in October 2020), proportionately a barely larger rise than the rise skilled by staff with out disabilities throughout this time. In the course of the interval between the aftermath of the pandemic recession and widespread vaccination, actual weekly earnings elevated. This was as a result of two principal causes: many staff who in any other case would have obtained decrease earnings have been unemployed or exterior of the labor power, and extra compensation was essential to incentivize staff in lots of industries for accepting the danger of an infection. Not like the pattern of employment for staff with disabilities, which noticed a secular enhance within the aftermath of the pandemic that continued for a number of years, the earnings of staff with disabilities totally returned to their pre-pandemic imply as quickly as labor market situations recovered from the pandemic.
The Present Inhabitants Survey knowledge allow us to analyze how earnings differentials for staff with disabilities relative to staff with out disabilities range by sort of incapacity. The chart beneath presents common weekly earnings for staff with imaginative and prescient, listening to, reminiscence, bodily and mobility/care disabilities. Employees with imaginative and prescient and listening to disabilities earn comparatively greater than staff with different kinds of disabilities, with staff with listening to disabilities incomes greater than $1,100 per week, whereas staff with imaginative and prescient disabilities earn between $1,000 and $1,100 per week. In distinction, staff with bodily disabilities earn round $1,000 per week, whereas staff with mobility/care disabilities earn between $800 and $900 per week (as within the earlier submit, we mix the latter two related incapacity teams to enhance precision). Employees with reminiscence disabilities are the one staff with disabilities to expertise a secular enhance of their weekly earnings, which rose from round $800 per week earlier than the COVID-19 recession to round $900 per week subsequently, with out reversion to the pre-COVID imply as of September 2025. The rise in earnings of staff with reminiscence disabilities could also be as a result of look of lengthy COVID, as staff who beforehand didn’t have disabilities now developed reminiscence disabilities however could proceed to earn considerably greater than did individuals with reminiscence disabilities pre‑COVID.
Weekly Earnings Are Increased for Employees With out Bodily Disabilities; Earnings Rise for Employees with Reminiscence Disabilities however Secure for Everybody Else
Weekly earnings (actual): bodily disabilities, {dollars}
Weekly earnings (actual): non-physical disabilities, {dollars}
Why do staff with disabilities earn lower than staff with out disabilities? We might see this occurring for 2 totally different causes. First, staff with disabilities may very well be incomes decrease wages. Second, they may very well be incomes related wages to staff with out disabilities however working fewer hours. Within the chart beneath, we current common hours (high panel) labored by individuals with disabilities in comparison with staff with out disabilities, in addition to common earnings per hour (wages) obtained by staff with disabilities and staff with out disabilities (backside panel). We see that staff with disabilities work about thirty-six hours per week on common, about 3‑4 hours much less per week than staff with out disabilities. We additionally see that staff with disabilities earn about $29 per hour, on common, in comparison with greater than $32 per hour on common for staff with out disabilities. Thus, the decrease earnings of staff with disabilities comes from each of those sources, with decrease wages taking part in a barely bigger function however decrease hours explaining almost half of the general earnings distinction.
Employees With Disabilities Work Each Fewer Hours and In Decrease-Paying Jobs Than Employees With out Disabilities
Hours labored in a typical week
Employees with disabilities earn significantly lower than staff with out disabilities, and expertise a number of the largest earnings differentials among the many teams that we think about within the Financial Heterogeneity Indicators (EHIs). COVID could have reshaped the panorama of earnings for individuals with disabilities. Beforehand high-earning staff could have skilled a decline in their very own earnings as a result of lengthy COVID, however pulled up the typical earnings of staff with reminiscence disabilities. We are going to proceed monitoring traits in labor market outcomes, each employment and earnings, for staff with disabilities in future releases of the EHIs.
Rajashri Chakrabarti is an financial analysis advisor within the Federal Reserve Financial institution of New York’s Analysis and Statistics Group.
Thu Pham is a analysis analyst within the Federal Reserve Financial institution of New York’s Analysis and Statistics Group.
Beck Pierce is a analysis analyst within the Federal Reserve Financial institution of New York’s Analysis and Statistics Group.
Maxim Pinkovskiy is an financial analysis advisor within the Federal Reserve Financial institution of New York’s Analysis and Statistics Group.
How one can cite this submit:
Rajashri Chakrabarti, Thu Pham, Beck Pierce, and Maxim L. Pinkovskiy, “Incapacity within the Labor Market: Earnings,” Federal Reserve Financial institution of New York Liberty Avenue Economics, January 12, 2026, https://doi.org/10.59576/lse.20260112b
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Disclaimer
The views expressed on this submit are these of the writer(s) and don’t essentially replicate the place of the Federal Reserve Financial institution of New York or the Federal Reserve System. Any errors or omissions are the accountability of the writer(s).
