Worker Disability Problems Rising in Industrialized Countries

Solution Sought in Washington, D.C. Conference

Released in Washington, D.C.

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Gabriele Stoikov, ILO labor expert, will be in Washington D.C. on Tuesday, May 19th and is available for interviews. Ali Taqi, ILO Assistant Director General, will be available in Washington, D.C. on Wednesday, May 20th. Please call 703-820-2244 to schedule a time.

The International Symposium and Colloquium on Job Retention and Return to work, Strategies for Workers with Disabilities, will be held at the Hotel Washington, located at Pennsylvania Avenue NW at 15th Street, from May 20-22. [/sws_white_box]

Claims for disability benefits are surging in industrialized countries — up to 600 percent in some nations — encouraging governments, private companies and unions to search for ways to get disabled people back to work, according to the International Labour Organization (ILO).

The ILO estimates that there are some 600 million people with mental and physical disabilities, or 10 percent of the world population. Statistics show a steady increase in these numbers. The reasons include:

  • projected increase in the number of disabled children, particularly in the developing countries, due to malnutrition, diseases,child labor and other causes;
  • increasing life span and numbers of elderly persons, many of whom have impairments;
  • increasing number of industrial and transportation accidents that cause impairments;
  • emergence of diseases and other causes of impairment, such as HIV/AIDS, stress and alcohol and drug abuse;

“The new economic reality — growing global competition, shrinking profit margins, a declining resource base — is forcing firms the world over to seek ways of decreasing personnel costs, but such cost reductions should not come on the backs of disabled workers,” says Ali Taqi, ILO Assistant Director General. “Instead, creative ways must be found to keep them in the work force, and bring back those disabled people who can and want to work.”

According to the ILO survey:

  • In the United States, the number of working age people benefiting from Social Security disability benefit programs increased 60 percent between 1984 and 1994, with less than one-half of one percent of such beneficiaries ever leaving the disability rolls to return to work.
  • The number of beneficiaries of disability benefits increased sixfold in the Netherlands, to more than 600,000 people, between 1968 and 1985;
  • Expenditures for workers’ compensation increased by more than 700 percent in Australia between 1976 and 1986, and averaged $5 billion annually during the 1980s in direct costs, with indirect costs at four times the direct ones. Indirect costs include productivity losses from lost time and skills, and retraining costs;
  • In Sweden, between 1980 and 1990, the people receiving supplementary disability pension or sickness allowances for more than one year increased from 300,000 to 436,000 — which triggered a reduction in benefit levels and an increased pressure by employers to return the disabled to work;

The recent innovations in national laws to assist the disabled have not been adequate to assist the new classifications of disabled, the survey finds. “This is particularly true for those workers suffering from the ‘new’ occupational diseases, for example those related to stress, and for those who have invisible disabilities that do not fall within the scope of legal definitions,” Mr. Taqi says.

The ILO International Research Project on Job Retention and Return to Work Strategies for Disabled Workers covers eight countries — Canada, France, Germany, the Netherlands, New Zealand, Sweden, United Kingdom and the United States. Preliminary findings suggest that new laws protecting the disabled may only increase the reluctance of private companies to hire them.

The preliminary findings of the study will be presented at the International Symposium and Colloquium on Job Retention and Return to work, Strategies for Workers with Disabilities a conference on job retention and return to work strategies for workers with disabilities, a joint initiative of the U.S. President’s Committee on Employment of People with Disabilities, the U.S. Social Security Administration and the ILO. It will be held in Washington, D.C. from May 20-22, 1998.

The ILO survey finds that in the more regulated German, French, Dutch and Swedish systems, laws that control how workers are hired, the conditions of their employment and how they are dismissed provide the foundation of support for public employment policies to protect persons with disabilities. Laissez-faire approaches in the United States, New Zealand and the United Kingdom, on the other hand, avoid imposing restraints on business and open the door to voluntary or profit-maximizing disability employment policies.

“Public subsidies to employers to hire the disabled are incompatible with the free-market philosophy in the USA,” the ILO survey says. “The United Kingdom has not developed wage subsidies specifically for disabled people in the competitive labor market, although if unemployed they will benefit from a new ‘Welfare to Work’ program which includes retirement benefits.”

The ILO says, however: “Across mainland Europe, wage subsidies, recruitment grants and relief of national insurance contributions are widely used to create jobs for long-term unemployed and other disadvantaged groups, including disabled people. There are also special incentive schemes in Germany, France and Sweden to promote employment of disabled people. Swedish active labor market policies positively favor disabled people. Incentives (to employ the disabled) are a new feature of Dutch policy.”

“Staying in work has become more difficult for workers with disabilities in general, due to the deregulation of the labor market in many countries, and as a result of pressures on enterprises to remain competitive in an increasingly global market,” says Mr. Taqi. Mr. Taqi leads the ILO delegation to the Washington conference and will give the keynote speech.

“At the same time, the escalating costs to public and private insurance systems of compensating workers who leave employment due to disability are driving a search for strategies to keep such workers in employment, who can and want to work,” Mr. Taqi adds. “Some enterprises have found job retention to be a cost-effective option and have developed their own practices for managing disability.”

The ILO says that corporations, unions, insurance and rehabilitation service providers and medical practitioners in many countries are increasingly recognizing the costs of disability and the benefits of return to work. Such organizations are making re-employment the primary objective for the disabled worker who can and wants to continue to work.

“New approaches to medical and vocational rehabilitation that emphasizes early intervention and rapid return to work have shown positive results,” Mr. Taqi says.

Unions are becoming involved in the return to work through the direct provision of services through disability management programs in the workplace, the ILO says. The ILO survey also finds that private insurance providers are introducing more flexible arrangements so that workers who become disabled and who attempt a gradual transition to work do not lose their benefits. Companies are looking for ways to reduce costs by introducing disability management programs in the workplace.

“Our analysis of the situation suggests that while any one component of a national system of legislation, regulation, social security benefits, worker compensation, vocational rehabilitation services, or company level practices may favor return to work, the system as a whole may not,” Mr. Taqi says. “In fact, to the disabled worker, the overall system may offer many incentives not to return to work, or disincentives to doing so.”

The ILO says this problem stems from fragmented, uncoordinated and often contradictory policies and practices, and the interplay between different parts of national systems. Discriminatory practices continue to deny persons with disabilities, as well as workers who become disabled, access to the world of work.

The Washington Symposium will examine the ILO findings with the goal of identifying best practices for encouraging job retention or the return to work for disabled workers. Participants will include representatives of government departments, social security agencies, workers compensation corporations, employer organizations, trade unions, rehabilitation agencies and disabled persons organizations from the eight countries examined in the ILO report.

Among the long-term goals of the project is to develop cost-effective strategies between workers, employers and government agencies which favor job retention and rapid return to work for disabled workers.

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