The Rising Tide of "Disability": It Shouldn't Be That Big of a Mystery

The fallout of the 2008 financial crisis has been largely focused on its effect on long-range unemployment rates.  While this is perfectly understandable and represents a much bigger long-term problem for this country than does the deficit, there's a related issue that gets far less attention, and that's the dramatic escalation of Americans who have qualified for and are receiving SSI disability payments.  When confusing jobs numbers get released every month, frequently showing a relatively small number of new jobs yet a decline in the national unemployment rate based on "people dropping out of the labor force", unemployed workers shifting to disability represent a large share of those decreed to have "dropped out of the labor force".  And even as jobs numbers have modestly increased over the past couple of years, the rate of people going on SSI has increased faster.  And while commentators are starting to take notice, few seem to have the vaguest hint of why this trend was predictable and inevitable, and why it may in fact get much, much worse.

Just this past week, Harvard economics professor and Bloomberg News columnist Edward Glaeser wrote a column snarkily and cluelessly entitled "2013 Is The Year To Go To Work, Not On Disability", and proceeds to tell us all the ugly statistics about SSI's unaffordable escalation with effectively no context on the cause of the problem.  And on Friday evening's edition of "Inside Washington" on PBS, panelist Evan Thomas talked about how white males have effectively "checked out of life", going on disability, not showing up to vote, and spending their days hunting and fishing.  It's almost too much of a cliche to even bother chastising a Harvard professor and a panelist on a talking heads show called "Inside Washington" about their failure to understand this issue, as simple as it is, but I'm gonna do it anyway.

The problem, Messrs. Glaeser and Thomas, is that males over 50--particularly blue-collar males over 50--who lost their jobs during the financial crisis are never going to be hired to work again.  Challenging as it would be for dislocated workers in that age demographic to be hired in any context, it's infinitely more challenging for them to be hired in America where the employer is on the hook for higher health care premiums for these older workers.  A "lucky" few may get a part-time gig making pizzas at the corner gas station for a fraction of what they earned at their old jobs, but they will still be without health insurance until the day they are eligible for Medicare.  With that in mind, finding a backdoor way to get on SSI is less about trying to avoid working for a living than it is continuing to exist in a nation that is no longer interested in the services you are able to provide.

During the health care debate, there was talk about lowering the Medicare eligibility age to 55, and the Americans described above are exactly the people such a policy would help.  If an employer didn't have to take on the health care premium of an older worker, they'd be much more attractive to hire.  But Joe Lieberman led the way in killing that proposal, and so the plight of older working-age Americans continues with no solution in sight other than continued hand-wringing about more and more people going on disability.

Whenever the media reports on this issue, they talk about how loose the guidelines are for qualifying for a disability, ultimately allowing just about anybody to file a successful claim and jump on the SSI bandwagon.  Ultimately, I'm wondering if this isn't by design....that the government is letting most applicants on with a wink and a nod, simply because there is no other alternative for these people, and the economic fallout of more home foreclosures and higher emergency room costs is ultimately deemed costlier than simply sending them a disability check long enough for them to hold on until Medicare.

Meanwhile, in the alternative universe occupied by Washington politicians and the out-of-touch commentariat, all of the talk is about how we need to raise the eligibility age of Medicare still higher, meaning that a nation of 57-year-olds who have no chance of ever working again due to the cost of their insurance will be joined in the unemployment line with 67-year-olds fruitlessly attempting to find a job with health insurance.  The detachment between policymakers and the media with the plight of working-class America has always been pretty striking, but their failure to comprehend why disability claims are on the rise really showcases just how extreme the detachment has become.