After the financial crash of 2008, how will the UK’s welfare to work policies affect the attitude of Scottish private sector employers towards hiring jobless people who have been disabled by mental illness?

McNally, Bernard (2018) After the financial crash of 2008, how will the UK’s welfare to work policies affect the attitude of Scottish private sector employers towards hiring jobless people who have been disabled by mental illness? PhD thesis, University of Glasgow.

Abstract

During the economic boom of the late nineties and early noughties, the last Labour government identified paid employment obtained from the competitive labour market as a realistic goal for people disabled by mental illness. Despite the effects of the financial crash of 2008 and the consequent recession, its successors have continued to argue this is the case.
One of the foundation stones of the policies they have used to pursue this goal is a biopsychosocial model of health, which sides with medicine in the longstanding dispute about the validity of the concept of mental illness. This model was used by the UK government to identify paid employment obtained from the competitive labour market as evidence of recovery in and recovery from mental illness. It did this by drawing on the belief recovery is an individual journey, the outcomes of disabled people's lives are determined by acts of agency; the language, but not the thinking, used by the disability movement to draw a distinction between disability and impairment; and research arguing people with a history of mental illness want to work and that they can obtain work from the competitive market when they are provided with appropriate support.
Another one is neoclassical economics: a static, deductive and utilitarian theory-driven economic model that has dominated UK policy since the late seventies. Like the government's preferred approach to recovery, neoclassical economics prioritises agency over structure. It argues labour market activity is a risk-driven endeavour and that economies have natural rates of unemployment, which can only be reduced by the state dismantling institutions preventing scarce resources such as labour from being distributed via price competition. As with medical thinking about mental distress, the neoclassical idealisation of the labour market has its critics. Amongst them are the old institutional economics, the new institutional economics, stratification economics and the new economic sociology. Different mixtures of empiricism, inductive thinking, theorising and attitudes towards neoclassicism ranging from relative enthusiasm to outright hostility, have for different reasons, led them to conclude to various degrees that institutions are necessary to impose order on uncertainty, unemployment can be a consequence of their influence and the state has to take this on board when taking policy initiatives.
The disputes within economics and between economics and sociology about the role of agency, structure and the state in the labour market raise doubts about the efficacy of the UK government's welfare to work policies regarding people disabled by mental illness. Doubts that have been echoed in comments made by the OECD in 2014, which voiced concern about the UK governments marginalisation of structural influences on the labour market. Surprisingly, the literature on disability and employability has not engaged with this dispute. This study starts to address this failure by drawing on the above models mental illness and the labour market activity to analyse how the UK government's welfare to work policies have affected demand from private sector employers in Scotland for labour from jobless people who have been disabled by mental illness. The analysis was conducted in two stages. First, it used evidence about the financial crisis of 2008 and statistics from the Westminster and Holyrood governments to paint a macroeconomic picture of the Scottish labour market for the period between 2008 and 2013. Then it conducted semi-structured interviews with thirty private sector employers about their understanding of mental illness and the labour market.
The initial part of the analysis argues rational price competition between private financial organisations caused the flow of money through western economies to dry up and that this caused the global financial crisis of 2008 and the deepest worldwide recession since the 1930's. Then it shows the UK government's adherence to neoclassicism led it to respond to these developments by directing government spending away from redistribution and service provision towards facilitating market competition and that the current tranche of welfare to work policies are part of this response. Finally, it uses figures from the Scottish and UK government for the period between March 2008 and March 2013 to look at the challenges facing these policies. Here it is shown that although the rise in unemployment has been relatively small given the depth of the recession. However it is also shown that there has been a sharp rise in underemployment, a significant drop in the number of vacancies and that private sector demand for labour will have to grow by as much as a third if the Scottish labour market is to successfully absorb those people with a history of mental illness the UK government hopes to move off disability benefits.
The second part found employers tend to link mental illness with strange and unpredictable behaviour; hold stigmatising beliefs about people with a history of these conditions; only hire them when information, which has been obtained independently of any vacancy, suggests they possess the technical and social skills necessary to fit in with how they do business; and they can discount the value of their labour. It then goes on to demonstrate five things. The first is that employers think workplace teams are different from the sum of their parts and that this has led them to believe the outcomes of recruitment decisions are always uncertain. The second is they protect themselves against uncertainty by taking a sequential approach to recruitment, one that involves ranking the sources of information they use to make recruitment decisions in terms of cost and reliability. In order of preference, these are personal experience, the experience of people they trust, recruitment agencies and open competition. The third is that their behaviour as they descend this hierarchy initially mirrors the thinking of the new economic sociology and stratification economists, then the new institutional economics until finally, it comes to bear its closest resemblance to neoclassical economics. The fourth is that employers descend the hierarchy for as long as their desire for profit outweighs their fear of harm.
The implications of this sequential multifaceted approach to recruitment for the ability of the UK governments welfare to work policies to improve the employability of people disabled by mental illness are identified by drawing on Zelizer's ideas about the role of connected worlds, circuits of commerce and media of exchange in economic activity. These ideas emerged in response to the under and over socialised thinking about the economy such as that offered by the new neoclassical economics, the new institutional economics and the new economic sociology. They form a line of thought that resonates strongly with the heterodox approach to economic analysis of the old institutional economics and stratification economics. They also provide a theoretical framework - that does not automatically blame the jobless for being unemployed - to hang the findings of this study about employers’ multifaceted approach to recruitment; the co-existence of large numbers of vacancies and high rates of unemployment; the peripheral role played by human resources professionals in most recruitment decisions; the ignorance of employers about the UK government's welfare to work policies; and employers’ hostility towards welfare to work contractors.
Taken together, the findings of this study indicate the people with a history of mental illness who will benefit most from the UK government's welfare to work policies will be those who inhabit the same social circles as private sector employers or those who have access to them. They also suggest these policies will be unlikely to increase the demand for their labour to anything like the degree necessary to absorb the numbers of them that will be moving off disability benefits. However, by using Zelizer's thinking about circuits of commerce and connected worlds to frame them, they offer hope welfare to work policies can be developed that recognise the importance of paid employment to recovery without conflating them. A set of policies that acknowledge the influence of impairments, social structures, job-related skills, and competition on employability, which accepts people diagnosed with mental illnesses will often need to be provided with rights and access to resources over and above those that support them to look for work.
Realising this possibility will require researchers in disability studies to engage with the economic and sociological debates about the labour market and build relationships with businesses, economists and other branches of sociology that are conducive to investigating how the economic and social lives of employers influence their targeting of pools of labour; clarifying when it is possible to include people with a history of mental illness in these pools, establishing how to go about doing this, determining when it is in their interests to do so and identifying what to do when it is not.

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Subjects: H Social Sciences > H Social Sciences (General); H Social Sciences > HC Economic History and Conditions; H Social Sciences > HD Industries. Land use. Labor
• Colleges/Schools: College of Social Sciences > School of Social and Political Sciences
• Supervisor's Name: Watson, Professor Nicholas, Beaumont, Professor Phillip and Findlay, Dr. Jeanette
• Date of Award: 2018
• Depositing User: Mr Bernard McNally
• Unique ID: glathesis:2018-9117
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 25 May 2018 12:33
• Last Modified: 04 Jul 2018 07:48
• URI: https://theses.gla.ac.uk/id/eprint/9117