The strange economic views of Conservatives on disability

Having spent eight months merely to get to the starting line for talks with the European Union on the vital issue of post-Brexit trade arrangements, British ministers are not, perhaps, in a good position to speculate on the lack of productivity of others.

But that didn’t prevent the Chancellor Philip Hammond suggesting before a parliamentary committee last week that one of the causes of our dismal national productivity performance in recent years has been the fact that there are more disabled people in the labour market than there used to be.

This is almost certainly wrong arithmetically, as the economist Chris Dillow pointed out in his reliably brilliant Stumbling and Mumbling blog. The numbers of classified disabled people in the jobs market has grown since 2013, from around 2.9 million to 3.5 million. 

But even if one makes the most extreme (and unrealistic) assumptions about the average lower productivity of these new entrants to the job market relative to the rest of the workforce, one cannot explain anything more than a minor slice of the UK’s yawning 20 per cent productivity shortfall relative to the pre-crisis trend.

Economists remain unsure of the reasons for our productivity disaster. But none of the multitudes of experts who have delved into the figures have come out arguing that increased employment of disabled people is worthy of even a passing mention.

Among the most frequently cited culprits are under-investment in new kit by companies, a lack of lending by weak banks, and “zombie” companies kept alive by low interest rates

Another plausible candidate, put forward by the Oxford University economist Simon Wren-Lewis, is that excessive spending cuts by the coalition and Conservative overnments have suppressed productivity-inducing demand – something that, of course, puts the blame at the door of Philip Hammond and his fellow ministers rather than disabled people.

Given the terrible stigma that already attaches to the disabled in the jobs market, a point made extremely powerfully here by my Independent colleague James Moore, why raise the issue at all in the context of a discussion of UK productivity?

There actually seems to be an unhealthy obsession in Conservative circles with the supposedly low productivity of the disabled. Back in 2011 the egregious backbench Tory MP Philip Davies suggested during a debate on the Employment Opportunities Bill that disabled people ought to be able to offer to work for less than the minimum wage in order to help them get onto the jobs ladder.

The former Conservative welfare minister Lord Freud was, similarly, caught claiming in 2014 that some disabled people are “not worth” the regulatory minimum hourly salary.

Rosa Monckton, writing in the bible of the Tory-supporting classes, The Spectator, earlier this year, argued that people like her disabled daughter, Domenica, should be allowed to work below the minimum wage.

Spot a pattern?

Some might have also spotted a conceptual problem with these various narratives. How can disabled people be simultaneously priced out of the labour market by the minimum wage and responsible for dragging down our national productivity at the same time?

Is it plausible to argue the minimum wage is serving to exclude disabled people from the jobs market when their participation rates have been rising? Yes, the increase could conceivably have been higher without the minimum wage. But very much higher?

And are disabled workers, on average, even less productive than the able-bodied? One empirical study of workers in an Australian call centre found that not only were disabled workers in the group just as productive as the rest of the workforce, but they tended to stay in the job for longer.

Other studies have found some evidence of lower productivity, but also unwarranted pay discrimination by employers. One significant theme that emerges from the literature is that the group of people classed as “disabled” is so heterogeneous, with such a broad range of capabilities, that it’s not a good idea to generalise.

A particularly important practical distinction is between those who were born disabled and those who became so later in life, because these groups tend to face pretty different sorts of challenges in the labour market.

But the way this issue is dealt with by some politicians suggests evidence and research are not really of much concern. Some elements within the Conservative Party appear to have a strange and unpleasant ideological conviction that the disabled, in general, ought to be paid less.

This article appeared in The Independent on 10/12/17