Interesting number, eh?

And almost 900,000 have dropped their claim to the taxpayer-funded benefits rather than undergo a new medical test as part of the Coalition welfare reforms.

We all knew that the various incapacity/invalidity benefits were being used as a way to disguise unemployment. It\’s been something of a deliberate policy since Maggie\’s day.

But the numbers do seem to be quite large, don\’t they?

And there\’s good economic reason to get them back onto Jobseekers\’ too. No, not just because it\’s a lower amount of money. Because as and when the economy starts to boom again (yes, it will, at some point) how much growth we can have before we get inflation will be, in part, determined by how long it takes to exhaust that reserve army of the unemployed. And people who are on disability, not Jobseekers\’, are not part of that reserve army.

Do note this isn\’t the analysis of some hateful neoliberal capitalist pig dog. This is M\’Lord Layard, Labour peer extraordinaire.

Having a million odd people completely removed from the labour force on disability limits growth in hte future. Having them in the labour force, even if only theoretically, will increase the growth we can have when it does return. It\’ll make out children richer that is.

19 comments on “Interesting number, eh?

  1. I’d be a bit wary about this 900,000 figure that is being bandied around yesterday.

    “Official figures released yesterday”. Hmm. Which government dept releases figures on a Sunday, let alone Easter Sunday.

    Various people have done some delving and found the “830,000” figure mentioned is the same number as a DWP release back in 2009 when the Labour government changed the rules regarding incapacity benefit.

  2. I thought labour were hateful neoliberal capitalist pig dogs these days?

    And if the 900k is people saying they’ll go quietly rather than have a medical it should be based on rather harder (and more recent data) than a 2009 guesstimate.

  3. > Having a million odd people completely removed from the labour force on disability limits growth in hte future.

    Not if they’re only “spuriously” on disability. If they are, in fact, able to work but unable to find any and only on disability because it pays better, then they become available for work once the demand rises.

    You appear to be suggesting that merely relabelling them makes some fundamental change.

  4. William, your reading comprehension is appalling. What did you think the end of the post meant? For reference:

    “will increase the growth we can have when it does return. It

  5. ….If they are, in fact, able to work but unable to find any and only on disability because it pays better, then they become available for work once the demand rises…..

    Unless…
    1) They get used to easy money, no questions asked
    2) The jobs they might get pay more than the dole, but less than sick pay

  6. William, the reason it makes a difference is that GDP is based on figures such as who is unemployed or not. Changing who is counted doesn’t change their ability to actually work, but it does change the GDP figures. And that feeds back in terms of confidence in the economy.

  7. From what I worked out, 800,000+ quit when sent a test, a further 800,000+ failed, 300,000~ were considered as being capable of some work, and 200,000~ were genuinely unable to work.

    If we’re looking at ~2.1m people that’s around 8% of the working population, which is just bonkers. If we’re down to 2%, that sounds much closer.

  8. Making people available for work who are incapable of working makes so much sense, I can’t understand why nobody had thought of this before..

  9. KJ,

    So, you think that something around 8% of the working population as incapable of working is realistic? Especially in an era where we’ve replaced most of the riveters and panel bashers.

    The 900,000 that just threw in the towel without even bothering to turn up just shows how far out these figures were. Even if the government had then not bothered with the assessment, we’d have taking over 1/3rd of people off incapacity benefit at a stroke.

    This all taps into Timmy’s comments about housing benefits. The Tories are playing a blinder here – picking low-hanging-fruit of areas that need reform and making the opposition look ridiculous when they defend the status quo.

  10. KJ, the question is, are they really incapable of working? In Australia, there are something like 800k people on the Disability Support Pension. Out of a population of 24mil and maybe 10-11mil workers. Like Tim Almond says, is nearly 10% of the workforce really that incapable?

    I’ve known, for various reasons, quite a few. Some really were incapable of work (severe back injuries for example) but fought their way out of it and went back to full time work. Others are perfectly capable of holding down at least a part time job if they wanted to but it’s so much easier, along with compliant doctors, etc, to stay on the ‘not much money but I get it for no effort’ path. I’m talking about physically able guys in their early 40s who haven’t worked in 15 years. Of course, smoking weed is good for them – it calms them down apparently. So that’s what they do all day.
    KJ, have a look at how many refused to even take a test – what does that tell you?

  11. Tim A, I was typing my comment at the same time as yours, so we ended up covering much the same ground. Anyway, I’d like to point out, my closest ‘incapable of work’ friend has no problem with taking the occasional cash job as a labourer or mover or driver or whatever. As long as it doesn’t imperil his benefits, he’s up for it. Disabled my arse.

  12. SBML @ 7.

    Unemployed people do not crop up in the GDP figures. The System of National Accounts (SNA) has a series of measures of the flow of value added (and in the appendices the stock of wealth). I suppose the flows paid to the unemployed and other welfare claimants turns up in a variety of different ways (as income reallocation), and through consumption etc, but in no practical way can I imagine that this definitional change from disability to unemployment would change GDP.

    I suppose that you could claim that the shift will change potential GDP (the output gap), but the impact of this shift in definition will likely be limited since I dont think this segment of the workforce will have much impact on NAWRU (non accelerating wage rate of unemployment). For how to calculate the output gap:
    http://www.oecd.org/tax/public-finance/1863308.pdf

  13. Ltw,

    Most people either know someone, or know someone who knows someone.

    I know someone who knows someone who is on incapacity benefit, but doesn’t seem to have any trouble fixing up his car.

  14. The problem with the reforms is that there’s clearly much that needs reforming, and equally clearly the usual government-contractor incompetence in the way it’s actually being done.

    It’s also worth noting, in light of the comments about people on benefits who don’t seem wholly incapacitated, that the difficulty many people suffer from is not that they can’t work at all, but that they can only work some of the time, at unpredictable times. It’s obviously next-to-impossible to find work when you can’t guarantee your employer you’ll be coming into work on any given day, or even that having started work you’ll be able to continue for a few hours.

    If we want to get people in similar situations off benefits, we need to provide employment that they can actually do. With large enough numbers all employed in one business, it becomes possible to predict how many will turn up on any given day with reasonable accuracy, even if not which ones. My pick would be the Post Office – sorting and delivering mail doesn’t take extensive training, and is still pretty labour-intensive.

  15. Well, like Shinsei I’m a bit wary of this actual figure.

    I’m also a bit surprised that Tim’s peddling Keynesian voodoo about a “boom” being stimulus driven and soaking up unemployment until, inflation. I thought even the Left gave up on that in the 1970s.

  16. Ken @13. I had a quick look at your link. A lot of numbers and stats and formula which confuses me (I can barely add up in my head). But I note that unemployment is mentioned in many of the tables. It seems that expenditure in pay benefits to unemployed people affects GDP. I suppose it is different to disability in that unemployment is seen as something that can change with the rise in the economy whilst disability doesn’t.

  17. in light of the comments about people on benefits who don’t seem wholly incapacitated, that the difficulty many people suffer from is not that they can’t work at all, but that they can only work some of the time, at unpredictable times.

    I’ll grant that Dave, and I’ve even been there myself – although I managed to stay outside the welfare system via credit cards and home equity.

    I was also, during the time I was living with someone who was on such a benefit, annoyed at the lack of flexibility – if she earned too much for a couple of weeks when she was capable, she was in serious danger of being cut off when she wasn’t (and she was scrupulous about reporting her income – so much for honesty). There is no doubt that sometimes you’re best not to even try, and I really do sympathise for people in that position.

    But even allowing for those situations, 8% of the workforce being counted as disabled is ridiculous, and I simply don’t believe it. It’s a transparent way of keeping the unemployment figures down.

    I think the problem is we think of disability as someone with severe pain, physical restriction, or really bad psychiatric problems (schizophrenia springs to mind). Of course those people need support. But it’s ridiculously easy, here anyway, to get certified as depressed or anxious and access the same benefits. Especially if you’ve been out of work for a while (who wouldn’t be depressed about that?), hell, you can doctor shop and find someone who will accept your sob story easily enough. I’ve done it myself – for complicated reasons not involving welfare, but to provide some official looking paperwork to a HR department to buy myself time to sort some things out. I have no doubt that if I’d wanted to go on the disability pension I could have done it with virtually no questions asked.

    Most people either know someone, or know someone who knows someone.

    Tim A, this isn’t a case of knowing someone who knows someone – it’s direct, personal contact with several people caught up in this system, with varying degrees of legitimacy.

  18. It hardly matters that the meaning attributed to the figures is false. It fits into the propaganda about scroungers and skivers and will be remembered as a ‘fact’ and used to advance an agenda that much more easily long after it has been refuted.

    And that’s what matters in politics.

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