Disabled people and the minimum wage
Would disabled people actually benefit if they were paid less than the minimum wage? Today Conservative MP Philip Davies claimed that allowing employers to pay a lower wage to disabled people would help them to get jobs: “the national minimum wage may be more of a hindrance than a help”, he said.
This isn’t just morally wrong, it’s bad labour market policy as well. After the national minimum wage was introduced without excluding disabled people, employment rates rose for disabled people and the employment gap between disabled and non-disabled people came down.
The context for all this was the Employment Opportunities Bill, yet another attempt by Christopher Chope MP to water down the minimum wage. The Private Member’s Bill was easily seen off – it only attracted 5 votes in favour – but Philip Davies succeeded in snatching the limelight from Mr Chope.
Mr Davies says he decided that disabled people would be better off without the minimum wage after visiting a surgery run by Mind, the mental health charity, where people with mental health problems had “accepted” that they would have difficulty competing for jobs with non-disabled jobseekers.
The suggestion that employers must be bribed with a lower pay bill to recruit disabled people shows a complete lack of understanding of the capacities of disabled people generally and people with mental health problems in particular. Excuse me for getting a bit hot under the collar – I have a history of depression, so I took this personally – and I was particularly pleased by Mind‘s robust response:
It is a preposterous suggestion that someone who has a mental health problem should be prepared to accept less than the minimum wage to get their foot in the door with an employer. People with mental health problems should not be considered a source of cheap labour and should be paid appropriately for the jobs they do.
Excluding disabled people from the minimum wage would be a badge of second-class citizenship – and would be likely to make non-disabled workers suspicious that having disabled colleagues could lead to their terms and conditions being undercut. This is a proposal designed to exacerbate social and economic tensions. (Apparently, Mr Davies believes that responses like this are “left-wing hysteria.”)
But we don’t have to rely on the moral case against this proposal. The whole notion that the minimum wage is a threat to jobs and keeps the most disadvantaged people out of work has been undermined by experience since it was introduced – until the global recession hit, employment rose continuously after the NMW was brought in.
This is particularly true for the employment of disabled people. Earlier this month, Getting In, Staying On and Getting On, Liz Sayce’s report on the employment of disabled people for the Department of Work and Pensions, noted that “gap between disabled and non-disabled people’s employment rates has shrunk over the past 12 years”. The report includes a very useful chart, showing the employment rate for disabled people, compared with the overall population:
The best indicator we have of the relative employment disadvantage faced by disabled people is the disability employment gap and the evidence is that it narrowed in the years after the minimum wage was introduced.
And even after the global recession caused unemployment to rise for all groups, that gap continued shrinking. As the latest report from the Low Pay Commission noted:
Analysis of the labour market outcomes of different groups of workers found that the employment rates of women, ethnic minorities as a group, disabled people and older workers held up better than average during the recession. Their unemployment rates also rose by less on average.
There’s an even more fundamental flaw in Mr Davies’ argument: yes, disabled people still face significant disadvantage in the labour market and their unemployment rate has risen (like everyone else’s). But that isn’t down to the minimum wage: it’s because there aren’t enough jobs to go round. There are more than five unemployed people chasing every job vacancy at present; fiddling with the minimum wage rules won’t change that reality for anyone.