The Disabled Unemployment Crisis
Sizing up the social and financial impact of addressing it
One of the most under the radar issues of our time is the disabled (some may call it special needs) unemployment crisis. An estimated 10% of the U.S. population has some form of physical or mental disability, and every state faces thousands of parents with disabled children pressuring lawmakers to help them find jobs. According to the APSE (an organization that advocates for employing disabled people before giving them government-funded benefits), this demographic has the highest un-and-underemployed rate in the country, at a staggering 79%. Clearly, states are really struggling to address the issue.
The Federal Government pays out nearly $110 Billion annually in disability benefits. Certainly there are many people receiving them who are incapable of holding a job. But there are also many who with the right support can be gainfully employed, productive members of society, and lessen the burden on government budgets. By reducing disabled unemployment, we can reduce government spending, while giving the dignity of having a job and feeling productive, to those who in the past have been shunned from the workforce. But what about the bottom lines of companies who hire more disabled workers?
As corporate DEI (Diversity, Equity, Inclusion) programs have come into vogue, evidence is starting to show hiring a diverse workforce - including disabled workers - actually increases profitability and corporate value. Given this, you’d think the private sector would be lining up to “disrupt” this market and solve the problem.
To date it has not. There are many misconceptions about what disabled means, and data does not exist to paint the complete picture of how valuable addressing this problem with a private sector solution can be.
States drowning
Every state in the United States has parents with disabled children pressuring state and local representatives to find employment opportunities for them. States in turn spend what turns out to be inadequate resources with a hodgepodge of programs aimed at addressing the issue. Major Choice has a contract with the NH Dept. of Education to provide career guidance service for neurodiverse students. The problem is these students need mentors after settling on a career direction, then they need to find a job, and Major Choice isn’t a job placement agency.
Given so many struggle with social interaction, there is a need to pay people to place disabled workers. But that requires finding employers who will hire them, and educating them about why they should, to say nothing of actually paying people to be trained and do the placement for very low pay.
Major Choice believes disabled unemployment is so severe that even though it is contracted to provide career choice services - not find jobs for its clients - it will lose its state contract if it doesn’t improve soon. In this case, NH will basically just give up trying to solve the problem - as other states apparently have already done - if its disabled unemployment rate doesn’t drop with the investments it has made that already are inadequate. To put it bluntly, if the disabled unemployment problem that is already daunting doesn’t improve soon, it will get even worse. Sounds like a crisis, doesn’t it?
Silicon Valley shuns the disabled community
Recently, I had the opportunity to speak with a software engineer and entrepreneur based in San Francisco, plugged into the Venture Capital community, about the market potential for addressing the disabled unemployment problem. I explained how Helpiing is partnering with Major Choice to provide a networking community called Inclusive NH aimed at addressing disabled unemployment in that state. Then I added that our research with Northeastern University students and our own discussions have shown a good number of employers will pay to participate in what they understand as a “virtual job fair” in the community that shows support to the disabled and welcomes them to apply for jobs with their organizations, because they see value in hiring them.
The response was a little surprising. Effectively, the guy said any employer sponsoring such a community would be doing so for charity. Charity means it is optional (not mission-critical), so investors wouldn’t see a scalable business opportunity and thus no ROI for themselves from solving the problem. This didn’t seem right to me, so I did a little research.
I found a McKinsey & Company article that talked about the value of strong DEI programs. McKinsey is not going to be publishing articles on its website advising companies to have robust DEI programs for charity. After all, this is a company that gets paid millions of dollars to tell other companies to fire people.
Then I saw this on the APSE website:
There is no doubt a social benefit to be gained by increasing the disabled employment rate, but this APSE data demonstrates it would hardly be charity to invest resources into accommodating, recruiting and hiring disabled workers. This means allocating resources from the private sector to solve the problem would also make sense from a value return on investment perspective.
Now the question is how to make the case with data and explanation?
Big Problems = Big Opportunity
There is no doubt the disabled unemployment crisis is a multi-faceted problem involving multiple constituencies, and it is a supreme challenge to take on. That also means making headway toward reducing it makes for tremendous potential rewards for those same constituencies; parents of disabled, disabled, employers, their shareholders, government, tax payers, and those who invest in solving the problem.
In order to attract the resources needed to adequately address and have a chance to make a dent in disabled unemployment, data is required that can prove doing so is a good use of capital. Data must be available that can demonstrate to even the most cold-blooded capitalist investor only concerned with wealth creation, not solving social problems, that allocating capital to address this crisis will provide a compelling return on investment.
Social Impact
How many jobs can be created if employers are adequately educated about the value hiring disabled workers has for them? What impact will reducing disabled unemployment have on parents, in the form of their own mental and physical health? What about the mental health of the disabled? How much money can government save in disability benefit payments by reducing the unemployment percentage? Like, how many government dollars can be saved per un or underemployment percentage rate drop? What money can states save if a private sector solution addresses the problem?
Financial Impact
How much will employers increase their profit by if they invest in hiring more disabled workers? What would be attributed to pure operational profitability? What would be the Corporate Social Responsibility (CSR) impact in terms of customers being more inclined to purchase if they know the company they buy from employees disabled workers? How much money are employers allocating to recruit disabled workers? What kinds of investments are they making to accommodate disabled workers and what is being spent? What do they need to spend? What role are DEI budgets playing here? Is there a ratio for spending on disabled recruiting vs. overall? How much more value and profitability would each employer in a given state realize if they hired an appropriate number (percentage) of disabled workers; based on job value, retention, CSR, tax benefits. It would be ideal to have a generic multiplier that calculates how each company will increase profits by X% or value by Y% by hiring disabled workers. Could even possibly demonstrate increased tax revenue for states.
These are some of the questions Northeastern MBA Marketing students will be tasked with answering. It will be fascinating to see them develop:
Numbers that prove the impact of addressing disabled unemployment
Conclusions that explain the numbers
Recommendations for demonstrating the value of hiring disabled workers to employers so investors can see the value in tackling the problem