Archived Story

A present day epidemic

Published 11:00pm Wednesday, December 11, 2013

By Daniel Sutter

The United States is experiencing an epidemic of disability. New awards under the Social Security Disability program (SSDI) have risen from an average of 630,000 a year between 1992 and 2000 to over 1 million in 2010, an increase of over 50%. One sixth of all Social Security payments now go to the disabled, and an estimated 6% of working age Americans are disabled. Alabama ranks in the top five states nationally, and in Hale County nearly one in four adults is on disability.

The rise in disability is both mysterious and surprising. The mystery arises because other measures suggest that Americans overall are healthier now than in the past. People are living longer, with fewer workers killed or seriously injured on the job. Medical innovations like hip replacements and back and heart bypass surgeries mean that many previously debilitating conditions are no longer so.

The surge is surprising for two reasons. First, the Americans with Disabilities Act, passed in 1990, sought to integrate people with disabilities fully into life and work. Employers can no longer discriminate against people with disabilities and must offer reasonable accommodations. Enhancing work opportunities should reduce the number of people with disabilities needing government assistance.

An ever increasing division of labor also makes the rise in disability surprising. Specialization drives the prosperity of the modern economy, a point I often make in this column. But the division of labor also particularly enhances the economic prospects of people with disabilities. A subsistence agrarian economy where everyone hunts or works in the fields offers few opportunities for the blind, deaf or invalid. Dividing labor into small enough tasks creates jobs where the abilities of people with disabilities can contribute. In our modern economy, Stephen Hawking became a world famous physicist despite his disabilities.

Taken together, the division of labor, spurred by technology like artificial intelligence, the Disabilities Act, and modern medicine mean that the economic opportunities of people with disabilities have never been greater. Fewer should need government assistance, and yet this has not happened.

Why are the ranks of the disabled swelling? The surge might be more legal than real. News reports document that many of the newly disabled are reasonably healthy and do not fit a traditional image of disability. The fastest growing causes of disability, back pain and mental illness, are the most difficult diagnoses to document or disprove. This suggests possible subterfuge, and perhaps able-bodied individuals seeking disability status.

Why then has there been so much effort by individuals to qualify for disability? Several factors appear involved. Disability claims increase with unemployment, so the 2008 recession explains some of the recent disability surge. SSDI, however, is not a temporary welfare program; very few working age Americans ever reenter the work force after being designated as disabled. History suggests that many of the newly disabled during the recent recession will never work again.

Welfare reform has also contributed. In 1996 Congress and President Clinton passed a landmark reform ending the entitlement to cash welfare payments. Welfare now has a lifetime limit and strict work requirements. Yet these conditions do not apply to the disabled. The nation’s welfare rolls have been reduced by over 60% since 1996, but some former welfare recipients have simply been shifted to SSDI.

States have contributed to the surge in disability. States operate our nation’s welfare programs, albeit with significant Federal funding, while SSDI is a purely Federal program. Consequently states have a financial incentive to move potential welfare recipients to disability. Some states have paid private companies to help welfare recipients get declared disabled, with bonuses for each “success.”

Americans are very caring and want a safety net to take care of the disabled, and yet also do not like for their generosity to be abused. And it is valuable for the talents of people with disabilities to contribute to our economy. Operating a safety net without disrupting the incentive to work is challenging. The recent disability epidemic demonstrates that our government-run welfare state continues to struggle with this task.

 

 

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University. Respond to him at dsutter@troy.edu and like the Johnson Center on Facebook.

 

  1. wayfaroff

    An increase in disability claims doesn’t necessarily implicate abuse of the system or fraud, in fact I’d be willing to gamble a lot of it is simply due to greater awareness of the program along with stigmas against the disabled being defused with time. A more telling number would be if you could find out the number of people in 1992 who qualified for the program, no matter if they actually applied for it or not, and then compared that to the numbers today.
    But, hey! Let’s just target the weakest among us instead!

    Also, your numbers went back as far as 1992 and then you somehow made a leap back in time to the Industrial Revolution.

    ‘An ever increasing division of labor also makes the rise in disability surprising. Specialization drives the prosperity of the modern economy, a point I often make in this column. But the division of labor also particularly enhances the economic prospects of people with disabilities. A subsistence agrarian economy where everyone hunts or works in the fields offers few opportunities for the blind, deaf or invalid. Dividing labor into small enough tasks creates jobs where the abilities of people with disabilities can contribute. In our modern economy, Stephen Hawking became a world famous physicist despite his disabilities.’

    While we’re on the topic, the ‘specialization’ you are referring to also ushered in repetitive labor intensive jobs, longer working hours and production expectation rates not dictated by the individual worker, but by market forces and businesses which has led to greater productivity but also a greater risk of injury and……disability.

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  2. wayfaroff

    From the US Census:

    ‘There are 36 million people who have at least one disability, about 12 percent of the total U.S. population.

    Those with vision difficulties number 6.5 million, while 19.4 million have problems walking or climbing stairs.

    Another 13.5 million have difficulty concentrating, remembering, or making decisions.

    Population Distribution:

    36 million – Number of people who have a disability. They represent 12 percent of the civilian non-institutionalized population.

    By age:

    * 5 percent of children 5 to 17 have disabilities.

    * 10 percent of people 18 to 64 have disabilities.

    * 37 percent of adults 65 and older have disabilities.

    12.3% – Percentage of females with a disability, compared with 11.6 percent of males.

    18.8% – Percentage of people with a disability in West Virginia, highest of all states. Utah has the lowest with 8.9 percent of its residents reporting a disability.’

    Thus at least 4 percent of working age Americans have a disability and are not on disability via comparing the number above to your own. Therefore, claims could still grow another 4 percent without it being due to fraud at all.

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  3. wayfaroff

    But, nice try.

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