Adding another dimension to Jim’s post on the unemployment figures released on Friday is this IBD piece by John Merline. It seems not only is labor force participation at multi-decade lows, the number of people seeking to join the Social Security disability program is growing ever larger:
Many of those who’ve quit looking have instead signed up for disability benefits.
So far this year, nearly 1 million workers have applied to get on the disability program, according to the Social Security Administration. More than a third will eventually be enrolled.
Almost 90,000 workers enrolled in the program in April, pushing the total for new enrollees above 333,000 in the first four months of the year.
Add in spouses and dependents, and the number of beneficiaries added to the program so far this year climbs to 539,000.
Over 5 million workers have joined the disability roles since the President took office in January, 2009.
How on earth can this happen?
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.
What we have, then, is rising dependency, fed by more generous and more available federal support programs that make work — any work — less enticing than going on the dole.
Perhaps this condition will change if the economy begins to show substantial signs of improvement. If not, then we are much closer to becoming a nation of “Julia’s” than we realize.
