Lord Freud’s comments
In order to discuss this rationally then, it’s important that what was actually said is accurately represented. The full transcript shows that Freud was answering a direct question from a Conservative councillor who said that he was dealing with certain individuals who actively wanted to work – primarily for the benefits to their quality of life – but were unable to find employment at the current minimum wage rate. This was simply for the reason that their condition meant that these particular people weren’t economically productive enough to find paid employment at the minimum wage without state assistance – and hence had thus far found they were unable to find work.
Freud reacted to the question by recognising that this was a problem for some individuals (note: not all disabled people or all of those with learning difficulties, as has been implied, most shamefully, by the Business Disability Forum on BBC News). He therefore suggested that for certain individuals – i.e. people like those asked about in the question, one idea might be to offer an exemption from the national minimum wage legislation to encourage private employers to hire them. You could, for example, have a much lower minimum wage at £2 per hour for these most difficult cases. This was discussed in the context of the Universal Credit – so it was clear that Lord Freud was not suggesting that vulnerable people would be living on £2 per hour – but that the state would step in to top up the lower market wage as a means of ensuring that severely disabled people would have the opportunity of employment but would not be living in extreme deprivation.
Now, one might disagree with his specific prescription and believe this is not the best way of enhancing opportunities for severely disabled people in the workplace. One might worry about who will decide who is placed in this sort of scheme. One might worry that some firms would seek to exploit this system. But surely no rational person, who has read the full transcript of what was said, can accuse Lord Freud’s views of being anything other than thinking out loud about how we can help some of the most vulnerable people in society. The trade-offs of minimum wage laws are well documented – and there is a long economic literature to show they tend to reduce the opportunities for the most unskilled workers.
This has not stopped the howls of outrage. Some have sought to imply that Lord Freud’s clumsy wording meant he was discussing the ‘worth’ of some severely disabled individuals as people, rather than the inability of some to be able to do jobs to the ability that firms are willing to take them on at the minimum wage rate. This is just not what he meant. A severely disabled person who finds it difficult doing a particular job can be objectively as valuable as anybody else. But it does not follow that they will receive the same amount in material reward from an employer for their work. The employer is compensating them for their time and effort and rewarding them for what they produce – this is totally distinct from our worth as human beings. Others have implied he was discussing all disabled people. This is just not the case. He was addressing a very specific question about people having difficulties finding work.
Perhaps most revealingly though, many people dislike what he says because they believe it ‘undermines the concept of the minimum wage’. Pointing out that existing laws actively prevent severely disabled individuals from finding employment – even though they would like to work and it would drastically improve their quality of life – is apparently beyond contempt. The ideology of the minimum wage wins out. In this world, it is apparently compassionate to back a policy which self-evidently means some severely disabled individuals cannot fulfil their employment ambitions. It is compassionate for them to be left unemployed. Indeed, one of the great travesties of the past 24 hours is that barely anyone who has expressed outrage about Freud’s comments has articulated a policy idea which would actually help the individuals Freud was discussing. You know, the people who want work – not just for the monetary rewards, but for the other benefits that employment brings. The sorts of people that really do need help from the state and civil society.
Twitter is awash with hysterical reactions. Many seem to think Lord Freud’s views are completely beyond the pale, that any suggestion the minimum wage law might be relaxed for certain groups is completely unthinkable. The irony is not lost on those of us who know a bit about the history and implementation of minimum wage laws.
When minimum wages were debated in the first decades of the 20th century between classical economists and the progressive Fabians, both agreed that they would create some unemployment for the young, the unskilled and many with disabilities. The classical economists saw this as a great problem, the progressives as a good thing. Sidney and Beatrice Webb, at the core of the Fabian Society over many years, said ‘With regard to certain sections of the population [the “unemployable”], this unemployment is not a mark of social disease, but actually of social health’. Wrapped up in eugenics programmes at the time, Sidney Webb said in 1912: ‘of all ways of dealing with these unfortunate parasites, the most ruinous to the community is to allow them unrestrainedly to compete as wage earners’. Several people with Fabian Society associations were extraordinarily critical of Freud yesterday.
I mention this not to suggest that these people share the Webbs’ views, but merely to point out that those who throw around ridiculous slurs and impugn the motives of Lord Freud – and seem to genuinely believe his view is utterly despicable – should have a sense of perspective. Historically, it is precisely the classical liberal economic viewpoint that has been concerned about the effects on the vulnerable of minimum wage rates. Up until 1997 there was a broad consensus that those whose productivity did not demand a particular wage level should be free to find work and have their income topped up by the state. And when the minimum wage was introduced, Mencap too – the charity for those with severe learning difficulties (who yesterday branded Freud’s comments ‘disgusting’) actually understood this impact – pointing out in a report that 1,000 people had probably lost their employment as a result of the minimum wage. At the time they called for precisely the sort of policy Lord Freud articulated yesterday. Since then, of course, the NMW has increased dramatically relative to earnings, meaning this impact is likely to be more significant.
It shows how far our politics has descended since then that anything like this cannot be discussed sensibly – not only a policy suggested by a learning difficulties charity just over a decade ago, but also one implemented in a host of other countries which we regard as perfectly pleasant and fair societies. Unfortunately, logic or reason has little space in this debate. Rather than discussing how policies actually affect the most vulnerable, we’re left discussing perception and emotion. We pretend we live in a world where economics doesn’t matter, that we can simply judge things by their intentions and not actual outcomes.
When I saw this story developing yesterday, I thought: why bother? Expressing a view different to the mob will result in so much bile, so much misrepresentation of your argument that it’s not worth it. You’ll simply be labelled ‘nasty’. But as Matt Sinclair said on Twitter, ‘If it is “nasty” to discuss how to help severely disabled people find work, to improve their self-esteem, the word has lost all meaning’. This is a debate where the instinctive outrage train is worthy of being challenged.