The economic advantages of disabled labour inclusion

The economic advantages of disabled labour inclusion

The Australian Bureau of Statistics describes a disability as ‘any limitation, restriction or impairment, which has lasted, or is likely to last, for at least six months.’ According to their 2012 Survey of Disability, Ageing and Carers (SDAC), more than four million Australians are affected by a disability. That equates to 18.5% of the population or nearly one in five people living in Australia.

These numbers will likely grow with the ageing of the population, as the percentage of people with disabilities increases with age. This makes individuals with disabilities one of the largest minority groups in Australia. Unlike other minority groups though, it is not homogenous but heterogeneous. The characteristics of individual disabilities can vary from physical, to mental or behavioural, to intellectual or developmental, to a combination of these. An individual’s ability to adapt to a disability also varies widely. Contrary to popular belief, only a small portion of disabilities are congenital: most arise during a person’s lifetime. Anyone can join the ranks of those with disabilities at any time, meaning disabilities cross all demographics and play no favourites.

At present nearly one in two individuals with disabilities in Australia, 45%, are living at or below the poverty line. Their employment rate is under 40%, compared to nearly 80% for the general population. This has left the majority of individuals with disabilities reliant on either government or family assistance for survival. Governmental assistance exists in the form of Disability Support Pensions (DSP), for long-term disabled individuals, or the newly created National Disability Insurance Scheme (also known as DisabilityCare). DisabilityCare aims both to provide tailored support for individuals with a disability and increase labour force participation.

Over the last few years expenses for DSP have consistently risen, exceeding $15 billion for the 2013 fiscal budget. While DisabilityCare is still in its trial phase, having been implemented in 2013, and although it is meant as a measure to kerb disability spending, recent projections have revealed that it could cost as much as $11 billion by the year 2024. It is estimated that federal spending on disability could match defence spending within the next decade. While this may be cause for alarm, there is one logical solution to kerb this projected increase in disability spending. This solution is not related to charity and also happens to make good business sense. It is to encourage and support the hiring of people with disabilities.

Despite the Disability Discrimination Act 1992, which prohibits discrimination based on disability, individuals with disabilities face higher barriers of entry to employment than non-disabled individuals. At present only 53% of Australians with disabilities are active in the labour force, with higher unemployment rates than non-disabled workers. While much of the effort to increase both labour force participation and the employment rate most often concentrate on programs which focus on the disabled labour supply-side, less is done to encourage employment from the demand-side of the equation. Without appropriate attention on the latter, substantial changes will have reduced effect.

The primary identified labour demand side problem is the lack of knowledge and stereotypes that exist with regard to disabled labour. Lack of ability to fit in, higher employer and training costs, capability of performing basic jobs only, higher insurance and safety costs, higher absenteeism and lack of productivity, are all common misconceptions of disabled employees. Although it may be the case that changes are needed to adapt working environments and training regiments for individuals with disabilities, these may not be as drastic or expensive as employers believe.

Individuals with disabilities are capable of more than just basic jobs with 19% of those employed working in professional positions, 15% working in clerical positions, 15% in technical positions and 13% being business owners themselves. According to the Australian Network on Disability, individuals with disabilities also have a low incidence of workplace injury, a lower absenteeism and a lower turnover rate than non-disabled individuals. Fifth Quadrant Analytics’ Return on Disability Rating has evaluated and shown that ‘companies that perform well in disability are highly responsive to their customers, and thus outperform peers in revenue growth.’ Successful companies such as Walgreens and Telstra have proven that employing individuals with disabilities makes them more competitive and thus increases their profitability.

Changing the stereotypes about individuals with disabilities is a necessary first step for an increase in demand for disabled labour. This change must be coupled with a change in cultural attitudes from employers and society as a whole. The hiring process will require appropriate leadership at the employer level. It will also necessitate adequate government resources for businesses, especially small businesses, as well as community support. These changes make economic sense both for companies as well as society. If Australia increased its performance with regard to the employment of individuals with disabilities and moved into the top eight OECD countries, this could add between $31–50 billion to GDP by 2050. This excludes the additional income from caregivers who would be freed for increased labour force participation and the reduced health expenditures from improved mental health outcomes associated with work and social participation.

At present, though, Australia’s disability policy is failing and not just economically. Out of 27 OECD countries it ranks 21st for employment participation rates and last for relative poverty risk of individuals with disabilities. It should be infeasible that such an advanced and affluent country does not better address this discriminatory problem. It is a human rights imperative, a social imperative and an economic imperative that greater inclusion of individuals with disabilities be tackled.

Image: ‘Disability symbols 16’ by National Parks Service Graphics (, put together by WCcmmons, Licence at domain mark