ILO 2015 -- Decent Work Report(Third Edition)

2 Work and employment options

People with disabilities should enjoy equality of opportunity and treatment in respect of access to, retention of and advancement in employment which, wherever possible, corresponds to their own choice and takes account of their individual suitability for such employment, according to ILO Convention No. 159 and Recommendation No. 168. The CRPD reinforces and complements the principles of ILO Convention No. 159, requiring States Parties to recognize the right of persons with disabilities to work on an equal basis with others, and stating that ‘this includes the right to the opportunity to gain a living by work freely chosen or accepted in a labour market and work environment that is open, inclusive and accessible to persons with disabilities’.

It remains common, however, that for many persons with disabilities, only sheltered (often segregated) employment opportunities are available and provided. There are numerous variations of these options across countries, depending on factors such as tradition and culture, economic, social and labour market conditions, social welfare benefit systems, availability of trained personnel, and influence of stakeholders, including organizations of and for persons with disabilities.

This Chapter gives an overview of employment for persons with disabilities under four broad headings:

• Open/competitive employment, including self-employment;¹⁴
• Sheltered employment;
• Supported employment;
• Social enterprises.

It also highlights the situation of women with disabilities, who face particular disadvantages in entering the labour force and finding decent jobs. Chapter 3 discusses measures to facilitate entry to and retention in employment under each approach, with particular reference to employment policy and practice in industrialized countries.

2.1 Open/competitive employment

The absence of adequate and comparable data on the labour market situation of people with disabilities in many countries makes generalization difficult. From the information available, however, it is possible to draw some tentative conclusions about the current situation in open or competitive employment (Schur, Kruse & Blanck, 2013).

• People with disabilities are less likely to be in full time employment than non-disabled persons. In countries of the Organisation for Economic Co-operation and Development (OECD) in the decade of 2000s, 44 per cent of people with disabilities of working age were in employment, compared to 75 per cent of the population at large, and their employment rates were reported to be falling in many countries (OECD, 2010). In the European Union in 2010, one in six persons (about 80 million) had a mild to severe disability (EC, 2010a) and additionally, at least 83 million people had mental health problems (Cyhlarova et al., 2010), yet only 45 per cent of disabled people of working age were employed compared to 74 per cent of people without a disability (Grammenos, 2010).
• The employment rates of people with certain disabilities – in particular those with mental health difficulties and those with intellectual disabilities - are reported to be particularly low (WHO, 2011). Women with disabilities are reported to be less likely to have a decent job than either non-disabled women or men with disabilities (OECD, 2010; Eurostat, 2002; Bjelland et al, 2008). Evidence for several low income countries reveal a similar pattern to those in high-income countries (WHO, 2011).
• When they are employed, people with disabilities are more likely to be in part-time, low-paid jobs with poor promotional prospects and working conditions (see, for example, Erikson et al, 2008; Korea MOL, 2007.) For example, 44 per cent of workers with disabilities have been found to be in some contingent or part-time employment arrangement, compared with 22 per cent of those without disabilities (Schur, L. 2003, cited in WHO, 2011).
• The unemployment rate of disabled persons tends to be higher than that of non-disabled persons. Registered unemployment rates of persons with disabilities in OECD countries was generally double that of non-disabled people in the mid-2000s: 14 per cent were registered as unemployed, compared to 7 per cent of non-disabled persons (OECD, 2010). Comparable data is not available for many developing countries.
• The participation rate of persons with disabilities in the open labour market tends to be lower than that of others. Slightly less than half (49 per cent) of persons with disabilities in OECD countries were economically inactive in the late 2000s, compared to one in five non-disabled persons (20 per cent) (OECD, 2010).

Reasons for this high inactivity vary between countries. Benefit traps and risks of losing benefits on starting work are major disincentives. Another possible reason may be the reluctance of employers to recruit disabled workers for fear of having to make expensive workplace adjustments or because of the difficulty of’ “letting someone go” once appointed (Shur et al., 2013).

Employment data - country examples

In Australia, the labour force participation rate for persons with a disability was 54 per cent in 2009, compared with 83 per cent for persons without a disability. The unemployment rate among persons with a disability was 7.8 per cent compared with 5.1 per cent for persons with no disability (Australian Bureau of Statistics, 2012).

In Canada, the employment rate for persons with disabilities in 2006 was 53.5 per cent, whereas the rate for those with no disability was 75.1 per cent (Human Resources & Skills Development, 2009).

In France, the unemployment rate for persons with disabilities in 2007 was double that of non-disabled people - 19 per cent compared to 9 per cent of persons without disabilities (ANED, 2009).

In Germany in 2005, the unemployment rate for disabled persons was 14.5 per cent, compared to 11.1 per cent for non-disabled persons (Waldschmidt & Lingnau, 2007; see also http://www.disability-europe.net).

In Hungary, as of 2011, the unemployment rate of persons with disabilities was 27 per cent compared to the rate of the entire population at 10.1 per cent (Komiljovics, 2013).

The employment rate of disabled people in Norway was 42.7 per cent in 2013, compared to 74.2 per cent for the whole population (4-traders, 2013).

In Sweden in 2008, 66 per cent of persons with disabilities participated in the labour force, compared to 55 per cent of persons with disabilities who had a reduced ability to work, and 81 per cent of persons without disabilities. Unemployment rates among these three groups were 6.5, 9.1, and 4.9 per cent respectively. 8.7 per cent of those with reduced work ability were unemployed compared to 4.3 per cent of the total population (Danermark, 2009).

Disabled workers in Switzerland were likewise unemployed to a greater degree than non-disabled workers in 2006, but their 52 per cent employment rate is relatively high compared to other OECD countries (OECD, 2006).

In the United Kingdom, the employment rate of persons with disabilities was 46.3 per cent in 2012, compared to 76.4 per cent of non-disabled persons (Department for Work & Pensions, 2013). The difference between the two figures represented more than 2 million people.

In the United States, the employment rate of people with disabilities aged 21-64 in 2012 was 33.5 per cent, compared to 76.3 per cent of people without disabilities (www.disabilitystatistics.org).

Labour force data for developing countries show a similar pattern of relatively low employment rates for persons with disabilities. In India, an employment rate of 37.6 percent was reported in 2002 among disabled persons, compared to 62.5 per cent of the overall population; in Peru, 23.8 percent of persons with disabilities were in employment in 2003, compared to 64.1 per cent overall; and in Zambia, in 2005, 45.5 per cent of persons with disabilities were employed, compared to 56.5 per cent overall (WHO, 2011, p 238).

In general, persons with disabilities in the labour market tend to have a lower level of education than others. They are also more likely to be in part-time jobs. Unemployment rates vary between types of disability, being highest among those with mental health disabilities. One study shows that the employment rate was as low as 10 per cent for this population (Papworth Trust, 2011).

In Switzerland, mental illness has become the single most important basis for persons to receive disability benefits, accounting for over 40 per cent of the total (OECD, 2006, p. 21), a trend that has been evident in other countries (Gabriel & Liimatanen, 2000; OECD, 2011). The World Health Organization (2010) reports that mental and psychosocial disabilities are associated with rates of unemployment as high as 90 per cent.

Based on a review of available information, reasons given for low employment rates among persons with disabilities include:

• low level of education and training;
• declining demand for unskilled labour;
• reductions in the workforce of large enterprises and the public service;
• concern about accidents and insurance costs;
• reluctance to register as having a disability;
• lack of information on work opportunities;
• lack of awareness among employers of needs and abilities of persons with disabilities;
• “benefits trap”;
• fear of losing welfare benefits;
• discouragement due to experiences of failure in obtaining jobs and/ or internalized negative images; and
• inadequate technology and technical/personal supports.

Gender gaps in employment

As noted above, people with disabilities in general face difficulties in entering the open labour market. But, seen from a gender perspective, women with disabilities face higher barriers to employment: men with disabilities are more likely to participate in the labour force and almost twice as likely to have jobs than disabled women. For example, according to a study carried out in the US in the early 1980s, almost 42 per cent of men with disabilities are in the labour force, compared to 24 per cent of women. In addition, while more than 30 per cent of disabled men work full time, only 12 per cent of disabled women are in fulltime employment. Women with disabilities who work full time earn only 56 per cent of the earnings of full-time employed men with disabilities (Bowe, 1984). Only 3 per cent of disabled women are registered in the labour force in Ghana (1996), 0.3 per cent in India (1991) and 19 per cent in the Philippines (1992). Most working women with disabilities are to be found in the informal sector (Messell, 1997). When women with disabilities work, they often experience unequal hiring and promotion standards, unequal access to training and retraining, unequal access to credit and other productive resources, unequal pay for equal work and occupational segregation, and they rarely participate in economic decision-making (IL, 1996).

2.1.1 More active labour market policy

Many countries are concerned about increasing levels of unemployment among persons with disabilities and their low rate of labour market participation, linked to concerns about increasing social assistance costs. Details of specific measures are contained in the following chapter, but the general thrust of new policy developments reflects increased emphasis on greater activation of labour market policy through:

• strategies to empower people with disabilities to live with greater fiscal independence;
• more effective implementation of anti-discrimination legislation;
• incentives to participate in educational, training, technology, and work initiatives;
• mainstreaming of employment and training services for persons with disabilities;
• increasing the availability of effective employment support services;
• greater involvement of employers;
• measures to prevent and discourage welfare dependency; and
• greater enforcement of existing quota scheme provisions.

At present, passive measures (income transfers) consume a considerably greater proportion of public resources than active labour market measures, making up 95 per cent of total spending on disability in most OECD countries, with only a few countries, namely Germany, Norway, the Netherlands and Denmark, spending over 10 per cent on active labour market programmes for persons with disabilities (OECD, 2010).

While the scope for shifting the balance may appear to be great, relatively high unemployment rates, coupled with a general economic downturn in many OECD countries, especially after 2007, have made it difficult to implement active labour market measures effectively, where these have been introduced.

2.2 Sheltered employment

It is generally but not universally accepted and at times disputed, that for some disabled persons, open employment may not be a practicable option, for various reasons. In calling for measures to promote employment opportunities for persons with disabilities, the ILO has recommended in the past that such measures should include “appropriate government support for the establishment of various types of sheltered employment for disabled persons for whom access to open employment is not practicable” (ILO Recommendation No. 168, para 11(b)). The UN Standard Rules on the Equalization of Opportunities for Persons with Disabilities state that while the aim should always be for persons with disabilities to obtain employment in the open labour market, “for persons with disabilities whose needs cannot be met in open employment, small units of sheltered or supported employment may be an alternative” (Rule 7 (7)).

In their survey of sheltered employment in various countries, Samoy and Waterplas (1997, p. 6) found that even the concept of sheltered employment does not have the same meaning for all people:

When government officials are asked to present their system of sheltered employment to foreigners (such as the authors), they will sometimes refer exclusively to organizations providing productive work (in industry or services) to persons with disabilities who have an employment contract and receive a wage. Other officials from the same state or officials from another state may want to include organizations where productive work is certainly not the only and often not even the main aim and where persons with disabilities have no employment contract and receive no wages, but only a bonus in addition to their disability pension. Other interested parties, such as workshop organizations or organizations of and for people with disabilities, may share this view or disagree.

In their report, Samoy and Waterplas adopted a broad view of sheltered workshops, including types of organizations close to occupational centres or day centres. However, a minimum of productive activity was required for an organization to be included. For countries where such institutions are normally not considered as sheltered work, some information was gathered in order to make comparisons possible.

The Council of Europe (1992) also uses a broad definition of sheltered employment:

Sheltered employment should be open to people who, because of their disability, are unable to obtain or keep a normal job, whether supported or not; it can cover a number of diversified situations, amongst which are sheltered workshops and work centres. Sheltered work should have a double purpose: to make it possible for people with disabilities to carry out a worthwhile activity and to prepare them, as far as possible, for work in normal employment. To this end, all ways of facilitating the passage from supported to ordinary employment should be devised, such as: the setting up of sheltered work sections in work centres or work centres in sheltered workshops; the setting up of sheltered work sections or work centres within ordinary firms; individual or collective detachment of workers in sheltered workshops or work centres to ordinary firms.

Some countries have found it useful, for planning purposes, to make distinctions between certain forms of work and employment. In Ireland, for example, a committee set up to advise on a strategy for employment for persons with disabilities in sheltered and supported work and employment used the following definitions:

Work is the undertaking of organized tasks which may attract some forms of remuneration, but which is not covered by employment protection legislation or pay-related social insurance.

Employment is remunerated work which complies with statutory requirements in regard to employment protection legislation, pay-related social insurance and income tax liability.

Sheltered Work is work undertaken by persons with disabilities in workshops specifically established for that purpose. People working in sheltered workshops retain their social insurance benefits and usually receive a small additional weekly payment from the work provider. Sheltered workers are not employed and are not covered by employment protection legislation.

Sheltered Employment is employment in an enterprise established specifically for the employment of persons with disabilities and which is in receipt of special funding from the State (NRB, 1997).

Many countries continue to operate some form of sheltered employment system, as evidenced by the reports of States Parties to the Committee on the Rights of Persons with Disabilities (Committee on the Rights of Persons with Disabilities, n.d). These are generally OECD countries that set up sheltered workshops many years ago, before the policy shift to inclusion started to emerge. Changes are underway, however, given the policy emphasis on inclusion in the open labour market, and increasing attention paid to the cost effectiveness involved as well as to the expressed wish of people working in sheltered workshops to have ‘the opportunity to work in outside employment’, in several countries where studies have been conducted, (McConkey and Mezza, 2001; Migliore et al., 2007; Verdugo et al., 2009).

In the United Kingdom, for example, Remploy was established in 1945 to rehabilitate and train disabled people to help them secure ‘ordinary’ employment. In 2011/12 financial year, Remploy employed more than 2,150 disabled people in its factories, but made an operating loss of £49.5 million (Remploy, 2013). It was supported by government funding from its inception until 2012, when public subsidies were withdrawn and government funding moved to other disability employment schemes, in line with the recommendations of an independent review. All Remploy factories have now either closed or been sold to new owners, following a closure programme which ran from March 2012 to October 2013 (McGuinness and Dar, 2014).

Outside the Remploy factory network, there has been a decline in the number of sheltered factories operated by local authorities and the voluntary sector, coinciding with a decline in the manufacturing industry as well as an increasing government policy emphasis on seeking employment for persons with disabilities in the mainstream workplace rather than a sheltered environment (Prime Minister’s Strategy Unit, 2005).

In New Zealand, a similar process of reform has been underway since the 1990s. The general exemption of sheltered employment from general wage rates and working conditions ended in 2007 to be replaced by a limited scheme of individually assessed exemptions that allow reduced wages to be paid according to individual productivity – with around 1,200 workers with disabilities remaining under such exemptions (Committee on the Rights of Persons with Disabilities, 2011).

In the United States, the U.S. Ability One Commission implements the AbilityOne programme, which under the authority of the Javits-Wagner-O’Day Act, employs approximately 50,000 individuals who are blind or have other severe disabilities through non-profit organizations in producing goods and providing services under contract with federal agencies (see http://www.abilityone.gov/).

Public policy in the Netherlands, Sweden, Norway and Finland, among other countries, has linked funding of sheltered workshops to specific ‘transition’ targets, involving a specified percentage of workers with disabilities moving to more open forms of employment each year; and encouraged greater market-orientation and a more business-like approach in these workshops (OECD, 2010).

Comparison between countries is difficult for a number of reasons, not least because the concept of sheltered employment does not have the same meaning to all, even within the same country. A number of general points may, however, be made:

• The philosophy of sheltered employment has been hotly debated in some countries (e.g. Australia, United States) in recent years, with other supported employment measures coming more into favour. In Europe, there appears to be little consensus, with some countries providing a significantly smaller number of sheltered employment places than others, relative to the size of the workforce. The debate continues, given the emphasis in the CRPD on the right to work in the open labour market.
• Many sheltered workshops owe their origin to voluntary effort, often charities, religious groups or groups of concerned parents. Gradually, they became subject to state regulation and eligible for state subsidization.
• In general, sheltered employment was intended for persons who were unable or unlikely to obtain or retain a job in the open labour market because of the severity of their disability or limited working capacity. In many cases, a minimum level of disability is specified as an entry requirement. The majority of those employed tend to have an intellectual disability, though in some cases no distinction appears to be made between intellectual disability and other cognitive and mental disabilities (Blanck et al, 2003).
• In most countries, improving transition to the regular labour market is a stated policy goal of sheltered employment. In reality, transition rates have ranged in the past from under 1 per cent to about 5 per cent, with most countries near the lower end of the scale (see, for example, Thornton and Lunt, op. cit.; Samoy and Waterplas, op. cit.; Council of Europe, 1993). Reasons given for low transition include reluctance of employers to recruit; reluctance on the part of workshops to release their key workers; the low technological level of workshop activities which restricts the potential skill levels of employees; and skills training which often does not reflect the requirements of the labour market.
• Sheltered employment has been criticized in some countries for failing to provide proper working conditions and employment contracts. In many cases, employees are paid less than the minimum wage. In some cases, they receive only “pocket money” in addition to their normal disability benefit. Employment and occupational safety and health laws often do not apply. There is generally no right to freedom of association (to unionize).

Some of the criticisms of sheltered employment in relation to low transition, lack of employment contracts, and poor pay, may reflect differences – or even uncertainty – in the philosophy underlying the concept rather than inadequacies in policy, management or cost-benefit returns. To assess the performance of sheltered workshops in terms of the issues that have been raised is open to question, when those operating the system see their responsibility more in terms of care and social service rather than employment promotion or economic returns.

2.3 Supported employment

Supported employment originated in the United States as an alternative to traditional rehabilitation programmes for persons with severe disabilities. It is defined by US law as paid work in integrated work settings, with on-going support services, for persons with severe disabilities (29 USC Art 705(35)). The provision of a minimum wage was added to US federal regulations in 1997 for persons engaged in supported employment (Wehman et al., 1997).

Supported employment may be provided in a variety of ways. These include individual placement, enclaves, mobile work crews and small business arrangements (Parmenter, 2011). An enclave is a group of individuals, usually three to eight, who work in a special training group within a host company. Not all members of the group may move into the company’s regular workforce. A mobile work crew may be a similar sized group, with one or more supervisors, which travels through a community offering specialized contract services, such as gardening or grounds-keeping. The small business option could be a manufacturing service or a subcontract operation, with a small number of workers with and without disabilities. The business might provide only one type of product or service (Department of Health and Human Services, 2008).

The individual placement option would appear to be the dominant one in the United States. In 2012, 83 per cent of supported employment participants were in individual supported employment positions compared to 77 per cent in 1995 (Wehman et al., 1997) and fewer than half of supported employment services provided a group model. However, there is no one “best” model because by definition and regulation, supported employment must be flexible, variable, accommodating, and require a collaborative approach. Collaboration is often necessary to put together the short-term funding needed for an individual to achieve job stability (Haines et al., 2012).

Some of these methods include job coaches, Employment Training Programmes (ETPs), Ticket to Work Programmes, personal assistance services, peer support services, and self-directed models. Each of these methods may be encountered within supported employment in order to meet the very different needs of each person requiring services (United States, Medicaid.gov).

The interpretation of supported employment varies from country to country (see ILO 2004a, pp. 78-80; Parmenter, 2011).

• In the United Kingdom and Ireland, for example, supported employment includes programmes providing financial subsidies to employers in respect of disabled workers with reduced productivity, as well as job coach-based activity as in the United States.
• Ireland implemented a national Supported Employment Programme (SEP) in 2000 providing services to between 2,200 and 2,500 clients at a time. A 2008 review of SEP found that people with intellectual and mental health impairments made up one-third each of the total clients served, and people with physical impairments comprised about one-fourth. However, only about 35 to 40 per cent of clients are actively employed and supported (WRC, 2008).
• In Norway, supported employment measures often end when a job has been found. The usual duration is six months, with the possibility to extend follow-up support for a further six months, rising to three years in special cases (OECD, 2013). However, supported employment represents a small proportion of work-related measures for people with vocational disabilities and is typically provided as an “add-on” service (Spjelkavik, 2012).
• In the Netherlands, the Parliament in 1992 asked the Government to find a solution to wage differences between supported employment programmes and sheltered employment. In the supported employment programmes, wages were related to productivity and supplemented with a disability benefit of up to 85 per cent of the statutory minimum wage, while in sheltered companies full wages were paid. In addition, the Government was asked to cover the costs of job coaches. As a first step, the supplementary benefit was raised to a limit of the minimum wage and a subsidy was introduced towards the cost of job coaches. Under 1996 legislation, local authorities may fund supported employment (Krug, 1996). Data on the number of people with disabilities using supported employment is limited. Of the estimated 73,000 adults with an intellectual disability in the Netherlands in 2005, 30,000 persons were in sheltered employment and only 3,000 persons were supported in the open job market (Schoonheim & Smits, 2009).
• In New Zealand, the supported employment programme provides a wage subsidy for two years (Saloviita, 2000). Similarly, the Mainstream Employment Programme offered through the Ministry of Social Development provides a 100 per cent salary subsidy for the first year and 80 per cent the second year (Ministry of Social Development, n.d.).
• In Finland, supported employment is provided as a municipal service under the Social Welfare Act. Additionally supported employment falls under social and health services instead of under employment policy, and has thus been medicalised (Teittinen, 2009). A survey of supported employment projects found that few defined supported employment as supported, paid work in integrated settings: “generally, it was understood to mean a variety of support options for employment or employment-related activities” (Saloviita, op. cit. p. 91).
• Other European countries, including Malta and Slovenia, provide long-term support during the job-seeking and employment process (EC 2005, Annex 3: 3.3.1). There are contrasting views on this however. According to the former President of the European Union of Supported Employment, Malta lacks the structure and personnel to run such support systems (Federation of Organisations for Persons with Disability, 2012). In Slovenia, new legislation appears to favour sheltered employment over supported employment. Pilot enterprises exist, but lack the accessibility to wide audiences and extension of the programmes (Flaker, Dolinšek & Nagode, 2007).
• In 2013, the United Kingdom introduced a Supported Internship scheme to support young people with complex learning difficulties or disabilities to find work. Further Education colleges run the scheme, working with employers to identify a job that suits each intern’s abilities and developing an individualized study programme, including on-the-job training, to enable interns to learn the skills required for the job (Gov.uk, 2013).
• In several countries of Asia, supported employment has been introduced by non-governmental organizations, with varying levels of government support. In Hong Kong, the Department of Labour provides support to NGOs that run support employment programmes for people with disabilities. One example is the New Life Psychiatric Rehabilitation Association that provides a Supported Employment Service for people with psycho-social disabilities, through work services in cleaning, security, retail and catering to businesses and organizations; and job-coaching and on-going support to individuals it places in open employment and to the employers who hire them (ILO, 2007). In Malaysia, the INTOWORK programme of the Joy Workshop supports the transition of workers from the sheltered workshop environment into supported employment (Parmenter, 2011); and in Mainland China, the China Association of People with Intellectual Disabilities has adopted supported employment as a key element of its five-year plan 2014- 2019 , building on the initiatives of several small voluntary associations (ILO, 2014 b). Public funding support for these innovative services has not yet been widely developed, although Guangzhou City in China is about to introduce a provision that funding will be provided for supported employment, drawing on the quota-levy fund.
• In Peru, the Centro Ann Sullivan del Peru (CASP) set up a supported employment programme in 1996, and by October 2006, had placed 90 persons with disabilities in 26 businesses. In addition to job-coaching and on-going support, if required, to individual workers the programme involves orientation for co-workers when new employees begin, retraining when new assignments arise, helps manage challenging behaviour and on-going consultations with co-workers and supervisors as needed (Mandic and Heymann, 2008). As in the case of some examples from Asia, however, the programme is challenged by lack of government support and the constant need to fund-raise, with implications for the long-term sustainability of the programme. There is some indication that this may change, however, as the Ministry of Labour initiated a pilot project on supported employment in 2013, coinciding with the entry into force of an employment quota, in which support to the companies is provided through job coaches employed by the Ministry itself.
• In Africa, there are very few examples of supported employment for people with disabilities in general, linked to lack of government initiatives to ensure the long-term sustainability of programmes for people with high support needs as well as a remaining tension between the welfare and human rights approaches to support for people with disabilities. Some examples point to the potential of this approach, however. These include the Living Link, a non-profit organization, founded in 2000 in Johannesburg, South Africa that supports the inclusion of people with intellectual disabilities in society and facilitates their transition from school to work to independent living; and a Supported Employment project for people with intellectual disabilities, introduced in Zambia with funding from the Government of Finland, leading to over a hundred graduates placed in employment (Parmenter, 2011).

2.3.1 Evaluation

Because of the variations in definitions of supported employment, findings from studies evaluating supported employment carried out in one country are difficult to generalize to others.

A number of studies in the United States have shown that supported employment has produced greater social and psychological benefits for workers, as compared with sheltered placements, and has been cost-effective for workers, taxpayers and society as a whole (Saloviita, 2000). There is no up-to-date corroborating evidence of this pattern, so it is not possible to judge whether this continues to occur or how extensive it may be. In 2012, financial benefits of supported employment were highlighted, with relative wages earned by supported employees found to have increased by 31.2 per cent since the 1980s, while the wages earned by sheltered employees decreased by 40.6 per cent over the same period (Cimera, 2012, p.109).

However, the practice of ‘creaming’ has been found to be prevalent. Barbour (1999) reviewed studies that accused many programmes of ‘creaming’, or taking less severely disabled persons as participants, because they are thought to be more likely to succeed and reflect positively on the agency providing supported employment. Cimera (2012) found evidence of the ‘creaming’ effect, “where the most competent workers go into supported employment while those with more limited skills and challenging behaviours enter sheltered workshops.” (p. 115).

In the United Kingdom, many supported employment jobs are part-time and below 16 hours per week. Where participants opt to retain their welfare benefit and earn a small allowable amount in addition, welfare benefit expenditures are not reduced and there is little, if any, flow back from tax (Beyer, Goodere and Kilsby, 1996). This is not so much a feature of the supported employment concept, but is rather due to the relationship between benefit entitlement and job earnings.

The concept of supported self-employment for persons with severe disabilities has been receiving some attention, particularly in the United States. A number of articles which appeared in a special edition of the Journal of Vocational Rehabilitation (2002), published to introduce its readers to the concept, show how self-employment may be helpful in promoting individual satisfaction for persons with significant disabilities, but they are also generally forthright in acknowledging the high level of support required at every stage of the business start-up and operation.

2.4 Social economy enterprises

The social economy, according to the European Information Centre for the Social Economy (ARIES), is “based on the values of economic activities with social goals, sustainable development, equal opportunities, inclusion of disadvantaged people, and civil society”.

The European Commission, which sometimes refers to the social economy as the third sector (in contrast to private business and the public sector), describes it as embracing a wide range of community, voluntary and non-profit profit activities. There is a growing number of economic initiatives within this sector, focusing on social aims and driven by a new entrepreneurial spirit (European Commission, n.d.).

Enterprises of the social economy have been defined as

‘those entities that function between the public sector and the private sector, are run and managed in a democratic way, provide equal rights to their members, and adhere to a special regime of property and distribution of profits whereby any surplus is reinvested in the growth of the entity and the improvement of services offered to its members and society at large (USAID, 2009, p. 24).

A wide variety of social economy enterprises exist, all sharing similar values. They include social firms; social businesses; social enterprises; community enterprises; development trusts; community, neighbourhood, worker and social cooperatives; credit unions; and microcredit and mutual guarantee societies.

The European Union (EU) views the social economy as an important part of the European economic model. The social economy in Europe (including cooperatives, mutuals, associations and foundations) was estimated to engage over 14.5 million paid employees in 2009/10, equivalent to about 6.5 per cent of the working population of the EU Member States, compared to 11 million in 2002/03 (EC 2013b). The EU introduced a Social Business Initiative in 2011 to foster and support the growth of these enterprises through improved visibility and recognition; simplification of the regulatory environment; and facilitating access to funding.

Cooperatives, associations and mutual societies are becoming increasingly important for creating and maintaining employment (Campos &Ávila, 2007). Campos & Ávila reported:

• In the EU-27, over 207,000 cooperatives were economically active in 2009. They are well-established in every area of economic activity and are particularly prominent in agriculture, financial intermediation, retailing and housing and as workers’ cooperatives in the industrial, building and service sectors. These cooperatives provide direct employment to 4.7 million people and have 108 million members.
• Health and social welfare mutuals provide assistance and benefits to over 120 million people. Insurance mutuals have a 24 per cent market share.
• In the EU-27, associations employed 8.6 million people in 2010; they account for over 4 per cent of GDP and their membership comprises 50 per cent of EU citizens.

The social economy has developed in different ways in EU Member States, largely because of different regulatory frameworks. In Italy, for example, a new regulation on social cooperatives has led to a major expansion of the sector, and assisted the reorientation of the cooperative sector from a direct focus on delivering benefits for members to providing wider benefit to the local community (UK Dept. of Trade and Industry 2002). According to Social Enterprises in Finland (n.d.), the Act on Social Enterprises of 2004 defined a social enterprise as being any sort of enterprise on the open market that is entered on the relevant register and at least 30 per cent of the personnel ‘are either persons with disabilities or a mix of those and long-term unemployed persons.’ As of March 2010, 154 such enterprises had been registered.

In the United Kingdom, there has been increasing interest in social cooperatives since the mid 1990s. Recent estimates indicate that there are 70,000 social enterprises, a significant growth since 2006 when 55,000 social enterprises were identified, compared to 15,000 in 2004. (Social Enterprise UK, 2013; Harding, 2006). There is no single legal model for these social enterprises, which include companies limited by guarantee,industrial and provident societies, and registered charities. Just over half (52 per cent) of social enterprises surveyed in 2013 actively employ people who are disadvantaged in the labour market including disabled people (Social Enterprise UK, 2013). Government policy to support this includes the improvement of the legal and regulatory framework governing social investment, the improvement of opportunities for social entrepreneurs through the establishment of a Social Incubator Fund to support the development of new social businesses and a social investment tax relief, among other measures (UK Government, 2014),

In the United States, the not-for-profit sector dates mainly from the 1960s. Enterprises in this sector benefit from a range of tax exemptions. In 2006, the Social Enterprise Alliance (SEA), based in the United States with a membership drawn mainly from Canada and the United States, widened its definition of “social enterprise” from “any earned-income business or strategy undertaken by a non-profit to generate revenue in support of its charitable mission” to “an organization or venture that advances its social mission through entrepreneurial earned income strategies”. Today, its definition states: “Social enterprises are businesses whose primary purpose is the common good. They use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas.” The SEA identifies three characteristics to be found in all social enterprises: directly addressing an intractable social need and serving the common good, commercial activity as a strong revenue driver, and the common good as its primary purpose (SEA, 2013). This change brought within its scope for-profit bodies with a social mission.

The Hong Kong Social Enterprise Resource Centre was set up in 2008 to provide a one-stop-shop service to social enterprises. The Centre provides advice, consultancy, training and other support services (see www.socialenterprise.org.hk).

Legislation in Lithuania on social enterprises aims to improve employment opportunities for persons from disadvantaged groups: 40 per cent of those employed in social enterprises should be from disadvantaged groups, including persons with disabilities. Wage compensation amounts to 50 per cent, or 60 per cent for persons with severe disabilities (EC 2005, Annex 3: 3.3.1).The law further provides that a “social enterprise for the disabled” must average 50 per cent of employees having disabilities. In 2012, there were 137 social enterprises in Lithuania (Ščerbickaitė & Moskvina, 2013). These social enterprises can benefit from government funding schemes in the form of wage subsidies and reduced social insurance premiums, incentives for each position created, grants to cover the cost of workplace adaptations and purchase of equipment as well as funding to cover the cost of the employee’s training, and to hire a disability assistant, interpreter or guide (European Blind Union, n.d.; SESP, 2012).

A key question to be raised in relation to these enterprises is whether they were set up as social enterprises, employing a diverse workforce including persons with disabilities from the outset, or whether they evolved from sheltered workshops and only employ workers with disabilities, inheriting similar practices as in the past.

2.4.1 Current employment of persons with disabilities in social enterprises

A European Commission review of employment policies for persons with disabilities in 18 industrialized countries found little evidence of enterprise strategies directly targeting disabled individuals (EC, 2000). While a number of countries offered start-up grants to persons with disabilities proposing to become self-employed or to start up a new business, few mentioned social enterprises as specific strategies to create additional employment opportunities for persons with disabilities. The EU Disability Strategy 2010 - 2020 aims to promote employment opportunities for people with disabilities by, inter alia, encouraging social entrepreneurship with concrete actions to be rolled out in a “Social Business Initiative”.

In Italy, the growth of work integration cooperatives started in 1974 when workers with mental illness rebelled against working without pay, and set up a cooperative to do the same work under contract (quoted in Thornton and Lunt, op. cit, p.225). The movement advanced with the closure of psychiatric institutions in the late 1970s. Law 381 of 1991 introduced a new model of employment for persons with disabilities based on social cooperation. Legislative decree 276/03 (reform of the labour market) provides new paths to widen employment opportunities for people with disabilities through greater involvement of social enterprises (EC 2005, Annex 3: 3.3.1). In 2008, 13,938 active social enterprises employed 317,339 workers (Carini et al., 2012).

In Spain, ONCE (the Spanish Organization of Blind Persons) established a foundation (ONCE Foundation for Cooperation and the Social Inclusion of the Disabled) in 1988, involving representation of the most representative national organizations of persons with disabilities. The primary goal of the Foundation is to provide employment for disabled people. In 1989, the Foundation set up Grupo Fundosa as a holding or parent company of more than 50 enterprises, which in 2011 employed more than 16,000 workers, of whom 70 per cent were disabled. The enterprises operate in diverse sectors, including laundry, retail sales in hospitals and community centres, telephone marketing, food production, accessibility services and data processing (Grupo Fundosa, n.d.).

In the United Kingdom, approximately 1 million people were employed in social enterprises in 2013, compared to 450,000 people in 2004 (Social Enterprise UK, 2013).

In Singapore, examples of social enterprises for persons with disabilities are a car wash ‘crew’ which works in a regular community setting, and a ‘thrift shop’ that sells recycled clothing. In both cases, though, the employees are paid by the welfare associations, rather than receiving wages generated by the business. While sometimes located in regular community settings, these enterprises tend to project a welfare impression, rather than a regular commercial image (Parmenter, 2011).

2.4.2 Future potential

The social enterprise sector has considerable future growth potential and may offer significant possibilities for new employment opportunities for persons with disabilities. For this to happen, adequate specialist support and advice would need to be available from government and businesses; adequate training would need to be provided for managers and staff; measures to facilitate access to finance would need to be introduced and an enabling legal and policy environment be created.

For further discussion of social enterprises providing employment opportunities for people with disabilities, see Katz & Kauder (2011), in the United States; Kim (2012), in Korea; and Ketsetzopoulou & Chiaf, (2012), in eastern and southern Europe).