One of the best things about being an economic journalist is I never know where I will be invited to speak. One of the nicest surprises was the Columbus Community Center, an outfit in Salt Lake City that assists workers with disabilities across the spectrum in order to prepare and then place them in appropriate jobs. Some of those workers have overcome physiological barriers in order to form basic words; others can run technical-jargon circles around the likes of me, but need to be focused on specific projects in order to overcome intellectual obstacles to setting those words in motion.
In preparing for the Global Interdependence Center’s conference, “Autism in the Workplace: identifying Obstacles and Leveraging Innovation,” at the Philly Fed next Wednesday, January 13th, I thought I’d share some work I did recently on the demographics and on some laws that may be at cross purposes. If the goal is to draw as many people in the workforce as possible, in line with sound democratic and economic principles, there are some changes we could make.
Full disclosure, I’m a big fan of the work the Columbus Center does, and as a board member of the Global Interdependence Center, have a relationship with them. There’s a link to the Columbus Center’s work at the end of this article. Please don’t go there now—I’ll lose you forever!
My first assignment for the Columbus Center was to present an overview of employment trends among the disabled at one of their conferences. Once I checked out their website—know your audience—I wanted to read more about their work, and certainly didn’t want to go into data-grubbing mode at the Bureau of Labor Statistics website, but I am glad I did.
The first thing that struck me was that unemployment and participation trends among the disabled, although at a much higher and a much lower level, track those of the overall population well. For example, unemployment among the disabled rose as the recession hit, and has since been falling. I was a bit surprised that the sectoral shares track as well as they do. If this is prejudice, then I will admit to it, but I had expected, perhaps, a slightly larger share of the disabled in government work, a slightly smaller share in, say, manufacturing, but that was not the case. The shares are almost comically similar. Not surprisingly, there are more part-time workers among the disabled, and more self-employed. The latter, unfortunately, is suspected to reflect prejudice.
There’s lots of grousing about an increase in the percentage of our population drawing disability benefits, but the drivers of that are not what we generally hear.
Researchers brought together for a SF Federal Reserve Bank study (link below) found that increasing Social Security eligibility from 65 to 66 is responsible for 9% of the increase; the ageing of the population, about 19% of the increase; and an increase in women’s eligibility, about 29%. In 1984 legislative changes swapped out a list of specific ailments for a more general overall physical and mental definition of disability, which raised the approval rate from 25% to 54%. And, since once workers get on disability they generally do not get off—sounds like a prejudice but it’s true—business cycles themselves move more people onto disability, as do low wage jobs without benefits. It’s an unintended consequence, of course, but look at it this way. You’re applying for a job in an investment bank, question 3 on your exam asks: You’re a single parent offered a minimum wage job with no health benefits for your children. You have a bad back, and might qualify for disability, which will be less money, but will free you from child care expenses, and you’ll qualify for Medicaid in 2 years. Which do you chose? If it’s the job, the investment bank might admire your work ethic, but questions about your logical abilities could lose you their job offer.
My second assignment for the Columbus Center was a round-up of international efforts toward placing and keeping disabled workers in jobs, and at monitoring those on the rolls. If we agree that for broad economic and societal reasons it’s best to have the largest share of the population working, and are serious about decreasing the number of people receiving these government benefits, even if that means finding something else to complain about (!), we have a lot to learn from these efforts.
The SF Fed study notes three basic issues: First, disability is not an immutable state, and many people who are disabled are capable of working in some capacity. The discussion of this has gotten so polarized that some may read this as a punitive statement, but it’s not. Disability payments are low, and most families would benefit from being able to make as much additional income as possible, and there is no question that self-esteem is improved by having work.
Second, disability programs themselves affect labor-force attachment of disabled workers. Programs conditioned on not working at all, or restricting income at a low threshold, result in lower work levels than do programs targeting on keeping the specific worker in the workforce. Third, the study is pretty clear that efforts to get people off disability are a costly waste of time, and that efforts to keep the newly disabled in the workforce are far more successful.
Be proactive. Immediate counseling and an active strategy are crucial for disabled workers who lose their jobs, and for those who become disabled while on the job.
Incentives matter. One straight-forward fix is to make the workplace better suited to newly disabled workers, and logic suggests that current employers would understand best how to modify workplaces and job description in order to keep workers on the job. Some European countries are experimenting with having current employers pick up some of the tab for retraining of workers who have lost their jobs, and even some of the short-term benefits should they go on disability. That provides a positive incentive to keep those workers on the job.
The OEDC finds that countries that start rehabilitation concurrently with the beginning of a short-term benefit have better return to work rates. The OEDC also finds that many countries spend just 0.1% to 0.2% of GDP on such assistance. A bigger investment in positive prevention would lead to gains in overall employment, and less pressure on public resources.
Education matters, a lot. Seventy-five percent of those on disability rolls have a high-school diploma or less. Better educational attainment can move disabled students into the work force, and support systems can keep them there.
Make work pay: Here in the United States our approach is pretty stark: you’re either disabled or you’re not, and if your earnings cross a specific threshold, you’re out of the system. Despite what you hear, it’s not easy to qualify for disability benefits, so those with disabilities, especially if they are insecure about their ability to hold a job, have a lot to lose. In Sweden, for example, those currently on disability are encouraged to take on as much work as they can, with the government there to make up some of the difference between prior and current pay levels. And workers are ensured they can return to whatever program they were in, without re-testing, should they lose their jobs and again require the assistance they gave up. Since it is hard to live on disability benefits, allowing our disabled workers to make as much as they can and to come back in if they must, would reverse our currently perverse incentive.
Unify programs: Disabled workers tend to get shuffled between different benefit programs, and a big complaint is that the programs themselves do not communicate among themselves. The unification of all benefit programs, including unemployment insurance, disability benefits, and rehabilitation programs, is gaining traction. This would make it easier to re-evaluate each worker’s progress toward re-entrance, which would help move them to partial programs when possible, and would keep disabled workers in contact with program directions, a basic requirement, research shows, for keeping them attached to the workforce.
Coda: Efforts to accommodate and engage disabled workers within our shores are working. The Hartford Courant reported back in May 2015 that manufacturers in the Connecticut manufacturing region have trained workers with intellectual and developmental disabilities to handle complicated, repetitive manufacturing jobs for which they had been using temps. The managers interviewed said the same thing you hear many, many times a day around the Columbus Center. Disabled workers improve the workplace atmosphere. Said Bill Joyce, manager at Rowley Spring, new members of the crew, “Light up the room every day with their energy and their enthusiasm. We watch them grow, interact, learn and have fun. We are delighted with their influence on our organization and culture. They’re proud of their achievements and contributions to our business. We feel lucky to have them.”
What’s not to like?