Media Split Over Relationship Between Social Security Disability and the Unemployment Rate

Media Split Over Relationship Between Social Security Disability and the Unemployment Rate

On Friday, the U.S. Department of Labor released the latest national employment statistics.  And, though the unemployment rate fell to a four-year-low of 7.6%, that trajectory is seen largely to be a mask for another, less encouraging trend.  Labor force participation rates—meaning, the percentage of work-age individuals who are working or looking for work—is at its lowest level since 1979.

And in a recent article, The Wall Street Journal laid the blame for at least a quarter of the drop in labor participation at the feet of Social Security Disability.

According to the newspaper, “[e]conomists say relatively few people are likely to trade their disability checks for paychecks, in part because the program doesn’t give much incentive to leave.”

With average disability payments at about $1,130 per month (more than the federal poverty line for an individual), the number of Americans on disability has reached almost 9 million, about 5.4% of the workforce, as opposed to 1.7% in 1970.

But Mother Jones, another news outlet, is not so sure about the conclusions that should be drawn.  First, it’s worth noting that the raw uptick in disability claims is not entirely unexpected.  In 1985, the Social Security Administration expected 7.6 million workers to be on disability by 2009.  The actual number?  7.8 million.  Higher, certainly.  But not by a relatively large amount.  Granted, the number predicted for 2012 was almost a million claimants less than are currently on the roles.  But the inaccurate prediction still foreshadowed some increase.

More importantly, though, is the reasoning behind the increased claims.  The Wall Street Journal implies some kind of abuse of the system—disability as a welfare-esque substitute for those who don’t deserve to be receiving such help.  But, according to Mother Jones, “[i]t’s equally likely that other factors forced the labor participation rate downward, and workers who found themselves with little prospect of ever getting a job were more aggressive about applying for disability coverage.”

Just because disability benefits are more needed, doesn’t make them less deserved.

For The Wall Street Journal article, see