The Prime Minister gave a speech on sickness and work last week.
British workers take few days off work. The reason is simple: incentives matter. Britain has exceptionally stingy sickness benefits, so workers try really hard to turn up to work. Statutory sick pay is around 10% of average private sector wages, and people average 4 days off a year. In Denmark and France people receive more than half their regular salary, and take twice as many days off. In Germany, where workers get their full salary, they take three times as many days off. Those hard-working Germans are off sick three times as often as our workers. The Resolution Foundation have helpfully produced a graph showing the international evidence.
https://economy2030.resolutionfoundation.org/wp-content/uploads/2023/04/LPB-2023.pdf
As well as comparing Britain with other countries, we can also look at Britain over time, using NHS digital’s data on fit notes issued each month. There are fluctuations, but the number is almost exactly what it was in 2019. The same is true if we look only at long term sickness, of 13 weeks or more.
https://files.digital.nhs.uk/9D/8B0F46/gp-fit-note-eng-ep-dur-dec-23.csv
Of course, more people are dropping out of the labour force. Many cite mental health issues, and many are not on benefits. That is particularly true for young people living at home with working parents, and for older workers with a working partner, or with savings. These people are not eligible for benefits, which are based on household income.
In a market economy firms will find people who take a lot of sick leave costly to employ. It is not difficult to make such people redundant. If you take a lot of sick leave you can, and quite likely will, lose your job.
The public sector is always being urged to act more like the private sector. I argue the opposite.
The public sector should seek to employ these people - because no-one else is going to. Doing so will raise GDP, increase tax revenues, and reduce the benefits bill.
My proposal is for zero hour contracts. When people feel well enough, they can log on, and work. They will be paid either by the hour, or by the piece.
Some people might work a few hours a day, most days. Others will work full-time some weeks, and nothing other weeks, when what Churchill described as “the black dog” descends again. I don’t mind which day of the week people work, or which hours of the day. What works for them, works for me.
Working brings a sense of worth to most people. This proposal therefore directly improves mental health. It also means an income, which also improves mental health by allowing greater engagement with society, with hobbies and so on.
This approach will also work for people with (some) disabilities, who find it hard to work in a predictable manner. This is particularly true for people whose conditions fluctuate. Many people with muscular skeletal issues find that pain comes and goes, affecting their ability to work.
This approach is well-suited to jobs that do not need to be done immediately, and which can be broken up into clear, discrete tasks. An example might be (and I stress might) processing probate applications. There is currently a 16 week expected wait for these to be processed by the Courts and Tribunals Service, even in simple cases. It won’t matter if some weeks more people are working than in other weeks, as these things will average out over any 16 week period. Service will be maintained.
This proposal would reintegrate many people, with physical or mental struggles, back into our labour markets and into society. It will lead to a bigger economy, higher tax revenues and lower benefit spending.
Less sickness. Happier people. A better integrated society. Literally, what’s not to like?
I don't think there's much stopping this happening already - employers use flexible contracts, term time contracts and similar to retain valued people even if they don't want/are unable to work full-time.
Perhaps the question is more what stops it happening more. It is harder to make such accommodations in some fields than in others - and in all there is an overhead of training and supervision that may not be justifiable in the most erratic situations. But I suspect the barriers may be more with individuals than with employers:
- by the time someone ends up on ESA/UC, they have often had a significant amount of time off, and be quite disengaged and deskilled from their current job;
- they may not have the skills or interest in the sorts of jobs that could accommodate their health condition;
- the stress and worry about whether the employer is actually going to pay you for the right hours at the right time, and whether DWP will take them into account in the way you were expecting for UC, is off-putting for some;
- the social and other benefits of work are significant, but accrue more to some people than to others.
I think the key point here (which is what people often refer to when saying “the public sector should act more like the private sector”) is that the proposal only pays people when they work. No work - no pay.
With that condition, I’d argue that it would be economically rational for any employer that can should employ such people.
Taking a lot of sick leave imposes costs on the employer because of the volatility and unpredictability in a person’s output; as such these people will command a lower hourly rate than people with the same skills but higher dependability. If you as an employer can handle the unpredictability with sufficiently low costs, you can profit through this wage arbitrage.
So is the argument therefore that
a) The public sector is particularly well placed to handle volatility at an individual level - perhaps because it is so large it’s spreading work over a large number of people
OR
b) The public sector should employ them even if (a) isn’t true (ie some “make-work” scheme) because the costs of doing so will be more than offset by tax revenues and benefit savings?