Fairer Scotland for disabled people - employment action plan: progress report - year 2

4. Measuring Progress

When we published A Fairer Scotland for Disabled People: Employment Action Plan, we had also identified and agreed the key indicators against which we would report on an annual basis. This is to measure and demonstrate progress towards achieving the overall aim of at least halving the disability employment gap in Scotland by 2038.

In this report, we refer to Annual Population Survey (APS) January-December 2019 data. This is the latest data which can be compared with our baseline year. However, we recognise that it precedes COVID-19 and the pandemic's impact on employment. Therefore this year, in addition to providing an update on our key indicators from the 2019 data, we have also included a section on the emerging evidence of the impact of COVID-19 on disabled people in our labour market.

The impact of COVID-19

It is likely that the COVID-19 crisis could exacerbate existing structural labour market inequalities, and we continue to monitor and report on the latest employment statistics for disabled people^[10]. The most recent results, from the Labour Force Survey^[11] for October-December 2020 (not directly comparable with the Annual Population Survey but more recent), show the employment rate of disabled people fell by 5.7 percentage points over the year with the disability employment gap widening by the same amount^[12]. In addition, recent evidence for the UK as a whole shows that disabled employees were more likely to be made redundant than non-disabled employees in September – November 2020^[13].

Prior to the crisis, households in which somebody is disabled were more likely to be in poverty^[14] and we also know that disabled people earn less on average than non-disabled people^[15]. Recent analysis by the Joseph Rowntree Foundation^[16] estimated that around 56% of disabled people in the UK who were employed at the start of 2020 had reported a loss of earnings by the middle of the year. This is 2 percentage points higher than the proportion of non-disabled people who reported a loss of earnings. Disabled people were also more likely to report they had zero earnings by mid-year (45% of disabled people compared to 41% of non-disabled people).

Other indicators highlight the wider impacts the crisis is having on workers. Recent survey evidence from the ONS^[17] (September 2020) shows that a lower proportion of disabled people in Great Britain reported that COVID-19 was affecting their work than non-disabled people. This may be because disabled people are less likely to be in employment. However, when examining the ways in which people reported that their work was being affected, disabled people were much more likely to be worried about their health and safety at work than non-disabled people (24.3% vs 13.7%), were more likely to have experienced a decrease in hours worked (22.6% vs 18.8%), and were also more likely to report being asked to take leave – which includes unpaid leave (3.6% vs 1.4%).

The ONS survey results also highlight the broader ways in which disabled people in Great Britain have been affected, which could have implications for individuals' employability and/or ability to work in both the short and long-term. Disabled people were much more likely than non-disabled people to report that their health was being affected (27.8% of disabled people vs 6.7% of non-disabled people) and 42.7% of disabled people reported that their access to healthcare and treatment for non-coronavirus related issues had been disrupted. Almost half (45.4%) of disabled people who had experienced reduced access to treatment reported that their health had become worse as a result. COVID-19 has also had a greater negative impact on the wellbeing of disabled people relative to non-disabled people (62.2% vs 42.0%).

The section below reports on progress of our key indicators:

4.1 Halving the Disability Employment Gap (DEG)

The Disability Employment Gap (DEG) is the difference between the employment rates of disabled people and non-disabled people. In 2016, when we set our aim to at least halve the DEG, this was 37.4 percentage points (p.p.). Since 2016, Scotland's DEG has fallen: to 35.9 p.p. in 2017; to 35.5 p.p. in 2018; and to 32.6 p.p. in 2019. The narrowing of the gap since 2016 has been driven by a rise in the employment rate of disabled people.

Figure 2: Change in the disability employment gap ( DEG) since baseline in 2016

	2016 - Baseline	2017	2018	2019	2038 - Aim to ½ the gap	Progress in reducing the DEG
Disability Employment Gap (DEG)	37.4 p.p.	35.9 p.p.	35.5 p.p.	32.6 p.p	18.7 p.p.

Source: ONS Annual Population Survey, Jan-Dec 2016-2019

Source: ONS Annual Population Survey, Jan-Dec 2019

4.2 Interim Milestones

We also set out two interim milestones in the Action Plan to help track progress towards halving the DEG:

A) To increase the employment rate of disabled people to 50% by 2023; and

B) to 60% by 2030.

To reach these milestones, and ultimately halve the gap, the employment rate of disabled people will need to increase by at least 1 percentage point every year on average. This has been achieved so far. The employment rate of disabled people has increased by 6.2 percentage points over the last three years – from 42.8% in 2016 to 49.0% in 2019.

Figure 4: Changes in the employment rate of disabled people

	2016 - Baseline	2017	2018	2019	2023 – 1st interim goal	2030 – 2nd interim goal	Progress towards interim milestones
Employment rate of Disabled People	42.8%	45.3%	45.6%	49.0%	50.0%	60.0%

Source: ONS Annual Population Survey, Jan-Dec 2016-2019

4.3 Young People and Transitions

In 2019, the employment rate of disabled 16-24 year olds was 42.0%, 6.2 percentage points higher than 2018 (35.8%) and higher than the baseline rate of 35.6%. However, the employment rate of non-disabled 16-24 year olds still remains much higher (60.8%), although this was unchanged between 2018 and 2019.

Figure 5: Employment rate of disabled young people (16-24 years)

	2016 - Baseline	2017	2018	2019	Progress over the latest year
Employment rate of disabled young people (aged 16-24 years)	35.6%	43.0%	35.8%	42.0%

Source: ONS Annual Population Survey, Jan-Dec 2016-2019

The unemployment rate of disabled 16-24 year olds declined by 1.9 percentage points between 2018 and 2019 to 16.0%. Despite this progress, the rate still remains more than double the unemployment rate of non-disabled 16-24 year olds (7.2%).

The definition of labour market inactivity is broad, with people categorised as being inactive in the labour market for many different reasons. These reasons include students, those looking after family/home, those who are long-term or temporarily sick, early retirees, and discouraged workers. The inactivity rate of disabled 16-24 year olds declined (-6.4 percentage points) over the last year to 50.0%. The inactivity rate of non-disabled young people increased (+1.0 percentage points) to 34.5%.

Young people have been one of the most affected groups in our labour market by the COVID-19 crisis. The latest data shows that the employment and unemployment rates of 16-24 year olds have worsened to a greater extent than other age groups^[18]. Whilst we don't have data reflecting the impact of the pandemic on the labour market outcomes of disabled 16-24 year olds yet, it seems likely they will have been disproportionately impacted, which we could see reflected in the 2020 data once available.

4.4 Supporting Employers to Recruit and Retain Disabled People

We are not able to report on individual employer's recruitment and retention levels of disabled people in this report. However, the disability pay gap provides a measure of equality for disabled people in employment. It represents the difference between average hourly pay of disabled and non-disabled people, as a percentage of non-disabled people's pay.

Figure 6: Disability Pay Gap

	2016 - Baseline	2017	2018	2019	Progress over the latest year
Disability Pay Gap	13.8%	13.3%	8.3%	16.5%

Source: ONS Annual Population Survey, Jan-Dec 2016-2019

Scotland's disability pay gap worsened between 2018 and 2019. In 2019, average pay for disabled employees in Scotland was 16.5% lower than non-disabled employees. This means for every £1 that a non-disabled employee earned in 2019, a disabled employee earned £0.83 on average.

We don't know the exact reasons for the increase in the pay gap over the latest year. The ONS did previously note that this data for Scotland is volatile which can make it difficult to identify consistent change over time^[19]. However, occupational data (discussed in more detail in the following section) shows that the proportion of disabled people employed in some of the highest paid occupational groups in our labour market fell between 2018 and 2019. This may be a factor contributing to the rising gap.

4.5 Supporting Disabled People to Enter Employment

Types of occupations that people move into

Disabled people are employed across all sectors of Scotland's economy and across all occupation types. However, disabled people are generally underrepresented in the better paid occupations in our labour market and overrepresented in lower paid occupations.

This is a particularly important point in the context of the COVID-19 crisis as some of the most impacted sectors are often the lowest paid. Disabled workers may therefore be at greater risk of job losses or work disruption (e.g. being furloughed) due to their overrepresentation in these roles. In 2019, 22.3% of disabled people in employment were employed in the Distribution, Hotels, and Restaurants sector compared to 18.4% of non-disabled workers. Disabled workers were also more likely than non-disabled workers to be employed in Sales and Customer Service occupations (12.0% vs 8.1%).

We know that the hospitality industry and customer facing staff have been some of the most negatively affected by the crisis. Take-up of the Coronavirus Job Retention Scheme has been consistently high in the Accommodation and Food Services sector, with 56.3% of UK employees in that sector on furlough as at 31stJanuary 2021, compared to an overall take-up rate for all sectors of 16%^[20]. HMRC PAYE administrative data^[21] for the UK also shows that the Accommodation and Food Services sector saw the joint largest fall (-15.2%) in payrolled employees between March 2020 and January 2021. The Arts, Entertainment and Recreation sector also experienced a 15.2% decrease in payrolled employees and also had relatively high furlough take-up (54.8%).

The 2019 data shows there has been limited progress over the last year in terms of increasing the representation of disabled people in the better paid occupations in our labour market. The proportion of disabled people employed as Managers, Directors and Senior Officials fell by 1.0 percentage point and the proportion employed in Professional Occupations fell by 1.7 percentage points (although the number of disabled people employed in this occupation increased by 2,200). These are, on average, the highest paid occupational groups. More positively, there was a 3.0 percentage point increase in the proportion of disabled people employed in Associate Professional and Technical Occupations (another relatively high pay occupational group).

For less well paid occupations, there was a fall in the share of employment of disabled people over the year for all occupational groups with the exception of Sales and Customer Service Occupations, where there was a 1.5 percentage point increase in the proportion of disabled people employed.

Changes in how disabled people move in and out of employment

In our previous Progress Report^[22] for our first year of implementing A Fairer Scotland for Disabled People: Employment Action Plan, we reported on flows into and out of employment. This analysis showed that disabled people were around twice as likely to fall out of work than non-disabled people. It is not possible to provide an update on this analysis as the ONS data used in the previous report remains the most up-to-date.

Working Patterns and Types of Work

Working patterns data shows that more than one third of disabled employees in 2019 worked part-time (36.4%) compared to less than a quarter of non-disabled employees (23.5%). We don't know the extent to which this reflects personal choice – it could be that disabled people are more likely to want to work part-time – but we do know that disabled employees were more likely than non-disabled employees (9.1% vs 6.9%) in 2019 to be underemployed. Underemployment reflects people in work who would like to work more hours in their current job, obtain an additional job, or move to a different job with more hours. This suggests some of that higher proportion of disabled people working part-time than non-disabled people is explained by disabled people being less likely to secure full-time work when seeking it. Disabled employees were also less likely than non-disabled employees to be in contractually secure^[23] employment (95.2% vs 96.6%) in 2019.

Since 2016, the underemployment rate of disabled people has consistently been higher than the underemployment rate of non-disabled people. Additionally, the proportion of disabled employees in contractually secure employment has mostly been lower than the proportion of non-disabled employees in such employment.

4.6 Intersectionality

We are keenly aware that disabled people experience barriers to employment on the basis of multiple characteristics, including gender, ethnicity and sexuality. When someone has multiple protected equality characteristics they are likely to experience greater disadvantage in the labour market, and we are committed to understanding more about these intersectionalities and to take action where possible.

Gender

Disabled women will face greater labour market barriers than non-disabled women and the experience of women in Scotland's labour market tells us that disabled women will face greater disadvantage than disabled men. However, although for Scotland's labour market as a whole the employment rate of men is consistently higher than women, disabled women have had a higher employment rate than disabled men in recent years, which was again the case in 2019 (50.6% vs 47.0%).

Rates of economic inactivity can help explain this. Whereas for non-disabled people, women are around twice as likely to be inactive than men – driven by women being much more likely to be looking after the family/home than men – for disabled people, rates of inactivity are similar by gender. This is because 'sickness' is overwhelmingly the most common reason given for inactivity by both disabled men (75.1%) and women (60.5%). (ONS, Annual Population Survey, Jan-Dec 2019).

Race

The employment rate of people from minority ethnic groups in Scotland is consistently lower than the employment rate of white people. And for people from minority ethnic groups who are disabled, multiple disadvantage and labour market barriers are reflected in a lower employment rate (39.8%) than people from minority ethnic groups who are not disabled (62.7%). A non-disabled white person is more than twice as likely to be in employment (82.8% employment rate) than a disabled person from a minority ethnic group (39.8% employment rate).

However, the minority ethnic employment gap – the difference between the employment rates of white people and people from minority ethnic groups – is much smaller for disabled people (9.6 percentage points) than non-disabled people (20.1 percentage points). This is primarily because disability has such a large negative impact on employment rates, that rates for disabled people are low – irrespective of race. (ONS, Annual Population Survey, Jan-Dec 2019)

Qualifications

The disadvantage faced by disabled people with lower qualifications is evident in the particularly low employment rate (43.4%) for disabled people with below degree level or no qualifications. But even with a degree or higher qualification, disabled people are still less likely to be employed (71.7% employment rate) than non-disabled people without one (78.7% employment rate). Non-disabled people with a degree had an employment rate of 86.3% in 2019, almost 15 percentage points higher than equally qualified disabled people.

However, there are indications that obtaining a degree improves the employment prospects of disabled people more than non-disabled people, and can act to reduce the disability employment gap. Having a degree boosts the employment rate of disabled people by 28.3 percentage points compared with 7.6 percentage points for non-disabled people. (ONS, Annual Population Survey, Jan-Dec 2019).

Conclusion

The 2019 data shows improvement in some of our key indicators over the year including the employment rate of disabled people, the employment rate of disabled young people, and also the disability employment gap. However, at the same time, the disability pay gap has worsened and there has been limited progress in terms of improving the representation of disabled people in the better paid occupations in our labour market.

Evidence of the impact of COVID-19 on the labour market outcomes of disabled people is still emerging, but we recognise that disabled people could be disproportionately impacted, and we may see that reflected in the 2020 data once available.

Further information

The Scottish Government publishes a range of labour market data on its website here.