Job guarantees for the disabled

It took me a while, but it has finally dawned on me why job guarantees might be very popular in the U.S., even among the sick and disabled. The clue is in this response to a tweet from Nathan Tankus:

It's not just a problem for the technically disabled. Health issues are the #1 reason why people miss work and lose jobs. Many are too weak or previously injured or old before their time. Until Medicare for all, JG with benefits would be a fantastic lift for many.

— Bob Spencer (@binhkhe) August 24, 2018

Here in the U.K., access to healthcare is not dependent on being gainfully employed. But in America, it is. If you aren't working, your access to healthcare can be very limited. Thus, sick and disabled people who are unable to work can lose access to healthcare. The very people who need it most are denied it.

But there is a fatal flaw in the notion that a job guarantee could compensate for lack of universal healthcare, even temporarily. No job guarantee scheme can possibly ensure that absolutely everyone works. There will always be people who are too ill to work, or too disabled to work, or whose caring responsibilities make it impossible for them to work, or - since advocates of Job Guarantee schemes usually insist that the schemes must be voluntary - simply don't want to work. What about them?

Clearly there would have to be federally-provided healthcare insurance for these people. But how do you decide who should benefit from that insurance and who should not? If someone doesn't work, but receives federally-funded healthcare insurance, while their neighbours work to receive employer-funded healthcare insurance, how do you think those neighbours are going to feel? I say this about federally-funded healthcare insurance, but the same applies to any form of benefit or income that enables people not to work. Not all disabilities are visible, and some sicknesses carry a stigma; mental health problems, in particular, are often regarded as "skiving". Public perception of benefit fraud is far higher than the reality, because ordinary people are very bad at discerning true need. Everyone has a story about someone they know who is gaming the system.

Most Job Guarantee advocates seem to think that the scheme would be voluntary. Their definition of "full employment" is "everyone who wants a job has one," not "everyone who is capable of working does so", which is the traditional definition of full employment. But I fear this is politically unworkable. The very reason why the UK now sanctions benefit claimants who don't look for work is that working people resent paying taxes to fund the lifestyles of those who (in their view) can't be bothered to work. A job guarantee scheme might be voluntary to start with, but it would inevitably succumb to popular pressure to make the lazy bastards work for their benefits. Indeed I have already heard exactly this from one prominent Job Guarantee advocate. In his view, if someone refuses a guaranteed job, they should receive nothing - no basic income, no healthcare insurance, no food stamps. I pointed out that a scheme which presents a choice between work or starvation is hardly voluntary, but this didn't bother him. In his view, someone who refuses to work doesn't deserve society's support. He is far from alone in this view. Forcing people into work with the threat of starvation is popular among the general public. Unless in-work benefits and services are as generous as out-of-work ones - and even sometimes when they are - political reality means job guarantees inevitably become workfare.

Admittedly, "he who will not work, shall not eat" appears to be an unusual view among Job Guarantee advocates. Most say that there would be basic income and benefits for those who are unwilling or unable to accept guaranteed jobs. But the job guarantee wage, plus benefits such as healthcare insurance, would be higher, to ensure that there was a financial incentive for people to work.

I am struggling to see how this is remotely consistent with the widely-held view among Job Guarantee advocates that a universal basic income would be highly inflationary because everyone would stop working. In a universal basic income system, people would always have the option of topping up their income with earned income - indeed there could be a job guarantee scheme as well, so that they can always have work when they want it. So those who argue that people would refuse to work if they have a basic income are in effect saying that financial incentives to work have no effect.* But if people will stop working if they are given the basic means to live, even if they have the option of working to increase their income, then an entirely voluntary job guarantee scheme backed by a basic income and services for those who are not working cannot possibly succeed. The higher job guarantee wage would not be enough by itself to encourage people to work. Harshness towards those who are not working would be necessary for the scheme to work at all. I don't personally agree that harshness is necessary, since I think financial incentives do work. But if they work, then a universal basic income is no more likely to be inflationary than a voluntary job guarantee scheme.

Whether or not financial incentives work, though, harshness towards those who refuse guaranteed jobs may become a political necessity: history shows that benevolence turns to miserliness as the economic cycle turns and resentment of others perceived as "getting something for nothing" builds up. In the U.S., such harshness might include restricting access to healthcare insurance, since this is a valuable benefit which creates a considerable incentive to work. In fact this is de facto the present situation, as I noted at the start of this post.

And this brings us back to the sick and disabled again. Why should those who are unable to work through no fault of their own be condemned to a lifetime of poverty? Why should people for whom daily life is already a struggle be forced to do paid work simply to gain access to the medical care that they need? Surely the richest nation on earth can treat its most vulnerable better than this.

Of course, those who could prove they are genuinely unable to work, rather than unwilling, could qualify for a higher level of benefits. But what does "unable to work" really mean? And who should decides whether someone is capable of work? We have seen again and again what the consequences of attempting to distinguish between the deserving and undeserving poor can be. Currently, the U.K.'s "work capacity assessment", which attempts to determine who is capable of work and who is not, is feared by sick and disabled people up and down the land. Those who are deemed "fit for work" lose their enhanced sickness and disability benefits. The decisions are often wrong: more than half are overturned on appeal. The human consequences are frankly terrible. There have been cases of terminally-ill cancer patients being deemed "fit for work", mentally ill people found "fit for work" starving to death after their enhanced benefits are cut, seriously ill people forcing themselves to attend "fit for work" interviews for fear of losing benefits.

The U.S. is showing signs of heading down the same road as the U.K. Don't do it, America. It is unnecessary brutality.

And this brings me to Nathan Tankus's original tweet, which I find every bit as disturbing as the response to it, though for different reasons. Tankus muses about the possibility that "full employment" of the disabled might improve health outcomes for them. There is indeed research evidence that people who are working have better physical and mental health than those who are not. This evidence was seized upon by the U.K. government to justify welfare-to-work programmes designed to force sick and disabled people into work.

But the interpretation of the research needs considerable care. People who are not working are more likely to be in poverty (and in the U.S, lack access to healthcare). Poverty and lack of healthcare worsen health outcomes. But this does not mean that lack of work causes poor health outcomes for sick and disabled people, still less that the solution to their poor health outcomes is work, as this piece (pdf) suggests, for example:

Employment increases household income and decreases economic hardship, both of which improve physical and psychological well-being. Numerous studies have demonstrated that poverty leads to poor health status (Thompson, Wells, & Coats, 2012).  Well-paying work provides individuals with the financial means to access heat, nutritious food, health care, and safe housing, all of which impact health directly.  The stress of trying to pay bills and feed and clothe a family on an inadequate household income generates psycho-physiological distress, malaise and susceptibility to disease (Montgomery, Cook, Bartley, & Wadsworth, 1999). People with higher incomes are more likely to have a regular provider of medical care and health insurance coverage. One of the most significant financial benefits of working (besides income) is health insurance.  A majority of Americans (60%) receive employer-sponsored health insurance (State Health Access Data Assistance Center, 2013). Individuals with health insurance are more likely to see their primary care doctor and dentist and receive routine screenings for blood pressure and cholesterol, and get preventive care.

This is a wholly illegitimate argument. If sick and disabled people are typically living in poverty and have limited access to healthcare, it is not work that they need, it is adequate income and universal healthcare. 

Additionally, if sickness and disability benefits are being systematically cut to encourage people into work, as is the case in the U.K. and may soon be the case in the U.S., then health outcomes for those who are not working will worsen as a matter of policy. Any research that does not control for the effects of benefit cuts on the health outcomes of those who are not working is deeply flawed. (And if you don't believe that cutting benefits and healthcare worsens health outcomes, look at Greece (pdf).)

There is also the problem of survey selection: the more sick or disabled someone is, the less likely they are to be working, so the health outcomes of those who are not working are inevitably worse than the health outcomes of those who are. Furthermore, aggregate responses showing health outcome improvement for those in work may conceal worsening health among those who are forced to give up work, or who are doing unsuitable work. Movement in and out of work, and variations in the number of hours worked by sick and disabled people, need to be monitored too.

I am therefore wary of public policy that aims to achieve "full employment" of sick and disabled people as a means of improving health outcomes. By "full employment", Tankus presumably means that all those who want to work are working, and to the maximum that they wish to work (since many sick and disabled people don't work full time). But what meaning does "want to work" have, when the alternative is poverty and lack of access to healthcare? If the primary reasons for poor health outcomes among sick and disabled people are poverty and lack of healthcare, the priority should be improving welfare benefits and introducing universal healthcare. After all, many sick and disabled people are completely unable to work. Don't their health outcomes matter?

This is not to say that a job guarantee scheme aimed at helping those sick and disabled people who want to work to do so is a bad idea. Many sick and disabled people want to work, but face serious barriers to employment due to discrimination, lack of facilities and inflexibility in working hours and locations. A job guarantee scheme would help to overcome these barriers.

The U.K. had such a scheme, introduced back in 1946. It's an interesting case study for disability employment schemes, not least because it illustrates how even successful schemes can fall victim to public choice difficulties and shifts in political and economic thinking. Remploy employed thousands of disabled people in its factories, many of them war veterans, and it also placed disabled people in private sector jobs. But it became bureaucratic and inefficient, and eventually succumbed to the fashion for privatisation; its factories were closed, making thousands of disabled people redundant, and it became simply an employment support agency for disabled people, helping them find work in the private sector.

Remploy factories were an important public service, and many mourn their passing. But they were never sufficient. A modern job guarantee scheme for sick and disabled people would have to offer a much wider range of jobs and more flexibility about hours and locations of work. This would be quite a public policy challenge.

Personally, I think that a job guarantee scheme for sick and disabled people is nowhere near as important as universal healthcare (Medicare for All, in the U.S.), uprating of welfare benefits to provide a decent income, and the ending of all attempts to judge whether someone is deserving of support. We need to end poverty among the sick and disabled first. Without that, any job guarantee scheme will simply reinforce the harshness that has become the hallmark of our time.

Related reading:

The road to the workhouse
A very British disease
Productivity and Employment, a cautionary tale
When the world turns dark
Generosity

* It also contradicts every piece of empirical evidence on the economic effects of UBI. Study after study has shown that the only people who withdraw from the workforce when there is a universal basic income are those who have other socially useful things to do, such as studying, bringing up children and caring for frail relatives. There is a strong argument that all of these should be regarded as work.