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The number of people with disabilities who were actively employed or looking for work held steady at the end of October even as the overall employment rate for people with disabilities hovered around historic highs. That’s the finding of a which is based on data from the U.S. Bureau of Labor Statistics (BLS). The news comes as decades-high interest rates have slowed the U.S. economy to a point where the Federal Reserve felt inflation was coming under control.
The labor force participation rate for people with disabilities, which includes those working and looking for work, came in at 40.4% in October, unchanged from a year earlier. The employment-to-population ratio, which includes only those who are employed, fell to 37% from 37.5%. The slight downturn comes after several years of steeply increasing employment for people with disabilities, notes John O’Neill, PhD, Director of Kessler’s Center for Employment and Disability Research. “I think we’ve reached a plateau. This is not bad news, but we certainly hope the rate of employment will continue to increase over time.”
Even though the labor force participation rate for people with disabilities remains near historic highs, it is still far below the rate for people without disabilities, O’Neill notes. In October 2024, that rate decreased very slightly to 77.9%, for people without disabilities from 80%, while the ratio of people employed to the overall population slipped to 74.9% from 75.2%.
During the Great Recession the employment rate for people with disabilities plummeted to around 24% in January 2014. It slowly recovered to a high of 31.7% just before the Covid-19 pandemic and bottomed out at 26.3% within one month. Then as the U.S. emerged from the Covid-19 lockdowns of 2020, many people quit their jobs in what became known as the Great Resignation. Employment rates for people with disabilities began rising steeply, reaching and surpassing all-time highs.
Some economists suggested that companies were looking at marginalized pools of labor that they had previously ignored. Many rehabilitation experts credited the rise to expanded use by companies of remote work and hybrid schedules, which became much more widespread during the pandemic period. They also pointed to the long-term effects of the 1990 Americans with Disability Act (ADA), which accords people with disabilities the right to seek “reasonable accommodations” from their employers. It also applies to those looking to get hired.
In fact, a 2022 Kessler survey of almost 4,000 supervisors at U.S. companies with more than 25 employees found that the use of flexible work arrangements had more than doubled in the previous five years and that twice as many supervisors said they had a central fund to pay for workplace accommodations. Hiring and recruiting people with disabilities was also ranked as important to both supervisors and upper management. “We think that set them up to work with people with disabilities more readily,” O’Neill says. “I remember when some people in disability employment research thought it would be great if we ever got to a 40% labor force participation rate. And that’s where we are now,” says O’Neill.
O’Neill’s work, which is in conjunction with University of New Hampshire, is funded by the National Institute on Disability, Independent Living and Rehabilitation Research (NIDILRR), which also funds employment-related research at the Center for Rehabilitation Outcomes Research (CROR) at Shirley Ryan 吃瓜天堂91.
CROR Director Allen Heinemann, PhD, is encouraged that the recent gains in employment for people with disabilities withstood the overall slowing of the U.S. economy in 2024. “I’m pleased the employment rate has stayed close to 40%. The pandemic has shown that remote work facilitates labor force participation for people with disabilities,” Heinemann says. “We have several years of data now that show it works as a reasonable accommodation and that people with disabilities can be effective employees.”
But Heinemann believes that further large employment gains will require changes at the national and state levels to support employment of people with disabilities. In fact, some people with disabilities don’t seek work because they would lose their Medicare or Medicaid insurance benefits if they earn above a certain amount. That dollar figure is as low as $34,490 a year in Tennessee and not much more than that in states such as Florida, Georgia and West Virginia. While Heinemann is hopeful that policymakers will act, he notes that there aren’t any current legislative efforts under consideration to affect that type of transformation. “We’ve had decades of vocational rehabilitation and the ADA being the law of the land. We’re going to need policy changes to further increase labor-force participation.”
KPMG U.S. Chief Economist Diane Swonk expects 2025 to be a year of slower growth for the U.S. economy, with the Gross Domestic Product (GDP) rising about 2%, down from 2.6-2.7% in 2024. “That’s the good news,” she says. “What we’re worried about is inflation stalling at a high level, which is prompting the Federal Reserve to slow its interest rate cuts going forward.”
Her 2025 economic outlook doesn’t foresee large layoffs at U.S. companies, which is further good news for people with disabilities who have gained employment in recent years. But she is concerned that recent statements by the incoming presidential administration about rolling back diversity initiatives that include people with disabilities could have a detrimental effect. “We don’t know what the regulatory changes will be and that could have spillover effects,” she says. “It could affect the efforts that firms go to have a more diverse labor force.”