Minimum wage – What’s it worth?

EconomyPeoplePoverty
ViewsJune 30th, 2011

Phillip Davies MP recently suggested that disabled people should be allowed to ‘opt out’ of the minimum wage in an effort to improve their employment prospects. Understandably, the subject dominated some blogs over the weekend. This is because the minimum wage, or
anything associated with it, is one of the most debated subjects on the internet. Urban legend (or perhaps that should be online legend) has it that
the wikipedia page on the minimum wage is the most edited page in Wikipedia history.

This largely stems from the great divide in political debates between those who have exclusively studied economics, and those with knowledge
of other disciplines in the social sciences. For the first group, the minimum wage is a hindrance to the labour market finding equilibrium, and hence a cause of unemployment. So naturally this group would support the efforts to allow disabled people to ‘opt out’ of its requirements (quite how much the decision to ‘opt out’ will be made from a position of  strength is a separate issue).

The problem is, such an approach completely misunderstands the nature of disability. Those supporting proposals to tackling low employment
rates amongst disabled people through abolishing min wage requirements are essentially seeing the process by which people obtain jobs as a pure labour market. In this theory, if somebody can’t get a job, all they need to do is lower their wage demands (price) and they’ll get a job.

The only problem is this concept of the labour market bears little relationship to the real world. In the real world the process by which
people get jobs isn’t by attaching a price tag to their necks and marching off to the labour market. Employers don’t march down to a version of Tescos or Asda and browse the aisles looking for workers to hire. And people who are unemployed aren’t going to be picked by those employers if they put a ‘reduced to clear’ sticker on their foreheads.

In the real world people obtain jobs by applying for jobs that are advertised in various publications and attending interviews with prospective employers. Hence your ability to get a job largely depends on your ability to do interviews rather than your ability to lower your wage demands to
the market equilibrium.

There is no intrinsic reason why people with aspergers syndrome, facial disfigurements, deafness, wheelchairs etc cannot perform equally as well as ‘normal’ people in most jobs . Even those with more severe impairments have skills and abilities that would make them valuable employees if
employers made special adjustments. So the issue with regards to high rates of unemployment amongst disabled people is the way society constructs the process of how to get a job. The issue really isn’t about minimum wage regulation preventing the market reaching equilibrium, it is about how society’s structures are themselves disabling. This is standard social model of disability stuff, and people in positions of authority within the political process should really know this.

What the proposal would do, if implemented,  is remove the legal protections disabled people face. It means those disabled people already in work will immediately be singled out for cost cutting by employers, and those out of work will automatically have an additional barrier to work – they will be expected to work for less doing the same job.

It would also reinforce the idea that people with disabilities are less capable of being productive employees than those without, and entrenches the idea that it is the disability that is the problem, not the attitudes of society.

So instead of suggesting that we solve unemployment by enabling more discrimination, how about we start to look at ways of enabling people instead, and try to understand that other social sciences can say a lot more than simply drawing supply and demand curves and applying the conclusions to every aspect of life.

Leave a Reply

Search

Search and filter the archive using any of the following fields:

  • Choose Type:

  • Choose Focus:

  • Choose Tag:

Close