About Those Exploding SS Disability Benefits
There’s lots of fretting and frowning over the number of folks getting disability payments in the US these days. It seems like everybody’s in on it–established magazines, conservative pundits, educated economists have good theories to explain it, NPR (with a pretty engaging piece), and even WonkBlog has gotten in an explanation (demographics + tough job market, in case you were wondering).
My piece on long-term unemployment got me to wondering–how many long term unemployed, marginally attached, and discouraged workers are leaving the workforce permanently and winding up on disability insurance? In my own work life I’ve known people who really could have qualified for a disability award. But in a solid labor market they were able to find employers who were willing/able to accommodate some special needs. When times are tougher, accommodation above ADA requirements often goes away. So a working person who is technically disabled is pushed out of the workforce by market changes. If I’ve witnessed it myself it can’t be too uncommon. This led me to ask how much it’s going on, and if it’s higher now than in the past.
Fortunately, the Social Security Administration makes figures on disability awards easily available. They also publish the month-to-month number of disability beneficiaries back to 1985, which I copied into Excel and graphed:
I was able to discern four trends in monthly awards in the data:
- An average rate of about 4800 awards per month in the late 1980’s
- That rate to almost 20,000 per month in the early 1990’s
- The rate declined slightly in the mid- and late- nineties and then slightly rose in the aughts
- The average monthly awards fell by 38% to about 12000 awards per month in April of 2012 to present
I attribute the increase in awards in 1990 to a cultural change–Americans began to be more aware and more accepting of individuals with disabilities. Disability accommodation came to be seen as a Civil Rights issue, culminating in the first President Bush signing the ADA. It makes sense that Americans would be more willing to apply for disability benefits, and that the government would be more willing to award them.
Bottom line, folks are bringing up the “explosion” in disability benefits 23 years too late. The rate increase was in 1990. And for the last 15 months, the rate of new awards being added is down, and down by a lot. Sometimes it feels good to go against the conventional wisdom, and this is one of those times.
A piece of Jessica’s art: