A record 5.4 million workers and their dependents have signed up to collect federal disability checks since President Obama took office, according to the latest official government data, as discouraged workers increasingly give up looking for jobs and take advantage of the federal program.
This is straining already-stretched government finances while posing a long-term economic threat by creating an ever-growing pool of permanently dependent working-age Americans.
Since the recession ended in June 2009, the number of people who’ve signed up for disability benefits is twice the job growth figure. (See nearby chart.) In just the first four months of this year, 539,000 joined the disability rolls and more than 725,000 put in applications.
As a result, by April there were 10.8 million people on disability, according to Social Security Administration data released this week. Even after accounting for all those who’ve left the program – mainly because they hit retirement age or died – that’s up 53% from a decade ago.
To be sure, disability rolls have grown steadily as a share of the workforce since the 1990s.
The main causes of this broader trend, according to a study by economists David Autor and Mark Duggan, are the loosening of eligibility rules by Congress in 1984, the rise in disability benefits relative to wages, and the fact that more women have entered the workforce, making them eligible for disability.
Their research found that the aging of the population has contributed only modestly to the program’s growth.
But the big factor in the recent surge is the slow pace of the economic recovery after the severe recession. That has kept the unemployment rate above 8% and created an enormous pool of long-term unemployed and discouraged workers. More than 5 million people have been jobless for 27 weeks or more, nearly twice the previous high set in 1983, according to the Bureau of Labor Statistics.
“We see a lot of people applying for disability once their unemployment insurance expires,” said Matthew Rutledge, a research economist at Boston College’s Center for Retirement Research.
The number of applications last year was up 24% compared with 2008, Social Security Administration data show.
As the Congressional Budget Office explained : “When opportunities for employment are plentiful, some people who could quality for (disability insurance) benefits find working more attractive … when employment opportunities are scarce, some of these people participate in the DI program instead.”
{Investor’s Business Daily/Matzav.com Newscenter}
It’s the economy, stupid. Unemployment insurance eventually runs out, disability doesn’t. And if you have a borderline disability, it’s a lot harder to get hired nowadays, since employers can be much pickier.
And then there’s the moral issue – when you see CEOs getting huge raises and bonuses even when their companies are in trouble, and the banks who caused the crash are still raking in the profits, why should a little guy go hungry? The oil companies are getting plenty of welfare, so why shouldn’t Joe down the street?
A fish begins to rot from the head, as the old Yiddish saying goes, If we have problems with personal integrity in the middle class, perhaps people are merely following the example of their “betters?”