The Story That Everyone Missed-The Disability Industrial Complex
Just caught an episode of This American Life called "Unfit For Work: The Startling Rise Of Disability In America". It turns out those on disability don't get counted on the unemployment roles (since, of course, they are classed as unable to work).
Every month, 14 million people now get a disability check from the government.
The federal government spends more money each year on cash payments for disabled former workers than it spends on food stamps and welfare combined. Yet people relying on disability payments are often overlooked in discussions of the social safety net. The vast majority of people on federal disability do not work. . . . Yet because they are not technically part of the labor force, they are not counted among the unemployed.
In other words, people on disability don't show up in any of the places we usually look to see how the economy is doing. But the story of these programs -- who goes on them, and why, and what happens after that -- is, to a large extent, the story of the U.S. economy. It's the story not only of an aging workforce, but also of a hidden, increasingly expensive safety net.
Chart source.
There were a lot of surprises in this great piece of investigative journalism, including the fact that there are lots of for-profit organizations cashing in on this rush to be unfit for any paying duty. Some law firms help people get their disability approved. Some firms are hired by states to get people off welfare and on disability. Why? It's simple: money. "A person on welfare costs a state money. That same resident on disability doesn't cost the state a cent, because the federal government covers the entire bill for people on disability. So states can save money by shifting people from welfare to disability."
I'm not going to bore you with all the details of this story since you can read the transcript or download the audio yourselves. I'm going to focus on just two aspects of the story that are kinda in the background, but which I think should be moved front and center.
First, consider the people doing the bulk of this disability applying; manual laborers. There was the woman early in the story who the interviewer finally "asked her what job she would have in her dream world." The response was startling. The woman wanted to "be the woman at the Social Security office who weeds through disability applications." Not aiming very high, right?
It's simpler than that, really. This is a poor, black, older woman living in the South who had worked previously "at the fish plant, and then as a nurse's aide," and now drew disability benefits because of severe back pain. In other words, she worked her entire life in jobs where sitting was not an option. The only person she could think of who sat at work was the woman who filed her application for disability.
She was, in hindsight, considering all the seated career options she had personally witnessed being done by older black women just like herself.
Really, folks, what did one expect would happen when the millions of people on welfare- many of them on welfare simply because no one would hire them gainfully, if at all-were kicked off welfare? Would they magically sprout skilled hands and an education and slide right into "normalcy" just as if nothing in their lives previous had happened?
Furthermore, jobs themselves have changed with increasing mechanization. This Planet Money episode provides some background interview material. "Work is somewhat less physically demanding than it used to be," says an economist researching the numbers behind disability (3 minutes, 24 seconds from the start). That doesn't open opportunities for people; quite the contrary. People that lose the physically demanding jobs simply lose the physically demanding jobs. The jobs left are often more physically demanding, often ones too marginal to mechanize. They also pay less.
More demanding work at lower pay . . . or disability. Not much of a choice, especially when one considers another factor; people drawing federal disability insurance benefits also get medical coverage. From the story transcript once again:
People who leave the workforce and go on disability qualify for Medicare, the government health care program that also covers the elderly. They also get disability payments from the government of about $13,000 a year. This isn't great. But if your alternative is a minimum wage job that will pay you at most $15,000 a year, and probably does not include health insurance, disability may be a better option.
"May be?" Try "is."
So, there are the two factors at work moving the country's lower skilled workers onto a transformed dole; increased mechanization reducing the number of gainful employment positions, and the lack of health care options. There are solutions. I noted one myself some time ago; the Work Less Party. If there are fewer jobs, all of us should work less and spread the available work around more equitably. Why work 8 hours minimum? By working only 6, more people can be employed. Also, many of those on disability are not completely disabled; far from it. They are, though, disabled enough to be unable to work a "full" day, and in many jobs the minimum shift is full time. Reduce the full time hours, and many will be able to return to work.
Even if we pay everyone more per hour, the economy will likely boom after this change. Why? William Kellogg of cereal fame tried an experiment. At one factory, he made no changes. At another, he reduced the shift by one hour, but kept the wage the same. After just a few months, the reduced shift factory showed no change, meaning that the workers almost as much done in their shortened shift as they once did. They probably weren't completely exhausted, and thus could work at an increased sustained pace without making mistakes. Further, the town surrounding the factory boomed, as the workers dedicated their new free time to social gatherings and side businesses. Reducing the hours benefited everyone, worker and employer.
Secondly, it's time for a Public Option for health care that is not dependent upon neither holding dream jobs nor paying crushing premiums. I'm talking socialized freaking medicine. Yes, it will cost money; but check it out! Thanks to the disability option, it already is! If people knew they could work for low wages but still get access to medical care when necessary, disability becomes less attractive.
Finally, I am really pissed at our nation's so-called "news." This problem has been growing for 30 years, yet it has also been under- or unreported. Ever since the rout of news budgets following the media consolidation of the '70s, reporting has gotten worse at the same time that number of telly hours featuring "news" has metastacized into Silly Town levels. Empty blather has become the norm, replacing long-form reporting backed by multi-month-and-year-long investigations. The story I cited here took reporter Chana Joffe-Walt six months. And we the consumers of the more available dreck are proving more and more uninformed, becoming more and more examples of the Dunning-Kruger Effect. The more news they watch, the less they know.
X-posted to talk_politics.
Every month, 14 million people now get a disability check from the government.
The federal government spends more money each year on cash payments for disabled former workers than it spends on food stamps and welfare combined. Yet people relying on disability payments are often overlooked in discussions of the social safety net. The vast majority of people on federal disability do not work. . . . Yet because they are not technically part of the labor force, they are not counted among the unemployed.
In other words, people on disability don't show up in any of the places we usually look to see how the economy is doing. But the story of these programs -- who goes on them, and why, and what happens after that -- is, to a large extent, the story of the U.S. economy. It's the story not only of an aging workforce, but also of a hidden, increasingly expensive safety net.
Chart source.
There were a lot of surprises in this great piece of investigative journalism, including the fact that there are lots of for-profit organizations cashing in on this rush to be unfit for any paying duty. Some law firms help people get their disability approved. Some firms are hired by states to get people off welfare and on disability. Why? It's simple: money. "A person on welfare costs a state money. That same resident on disability doesn't cost the state a cent, because the federal government covers the entire bill for people on disability. So states can save money by shifting people from welfare to disability."
I'm not going to bore you with all the details of this story since you can read the transcript or download the audio yourselves. I'm going to focus on just two aspects of the story that are kinda in the background, but which I think should be moved front and center.
First, consider the people doing the bulk of this disability applying; manual laborers. There was the woman early in the story who the interviewer finally "asked her what job she would have in her dream world." The response was startling. The woman wanted to "be the woman at the Social Security office who weeds through disability applications." Not aiming very high, right?
It's simpler than that, really. This is a poor, black, older woman living in the South who had worked previously "at the fish plant, and then as a nurse's aide," and now drew disability benefits because of severe back pain. In other words, she worked her entire life in jobs where sitting was not an option. The only person she could think of who sat at work was the woman who filed her application for disability.
She was, in hindsight, considering all the seated career options she had personally witnessed being done by older black women just like herself.
Really, folks, what did one expect would happen when the millions of people on welfare- many of them on welfare simply because no one would hire them gainfully, if at all-were kicked off welfare? Would they magically sprout skilled hands and an education and slide right into "normalcy" just as if nothing in their lives previous had happened?
Furthermore, jobs themselves have changed with increasing mechanization. This Planet Money episode provides some background interview material. "Work is somewhat less physically demanding than it used to be," says an economist researching the numbers behind disability (3 minutes, 24 seconds from the start). That doesn't open opportunities for people; quite the contrary. People that lose the physically demanding jobs simply lose the physically demanding jobs. The jobs left are often more physically demanding, often ones too marginal to mechanize. They also pay less.
More demanding work at lower pay . . . or disability. Not much of a choice, especially when one considers another factor; people drawing federal disability insurance benefits also get medical coverage. From the story transcript once again:
People who leave the workforce and go on disability qualify for Medicare, the government health care program that also covers the elderly. They also get disability payments from the government of about $13,000 a year. This isn't great. But if your alternative is a minimum wage job that will pay you at most $15,000 a year, and probably does not include health insurance, disability may be a better option.
"May be?" Try "is."
So, there are the two factors at work moving the country's lower skilled workers onto a transformed dole; increased mechanization reducing the number of gainful employment positions, and the lack of health care options. There are solutions. I noted one myself some time ago; the Work Less Party. If there are fewer jobs, all of us should work less and spread the available work around more equitably. Why work 8 hours minimum? By working only 6, more people can be employed. Also, many of those on disability are not completely disabled; far from it. They are, though, disabled enough to be unable to work a "full" day, and in many jobs the minimum shift is full time. Reduce the full time hours, and many will be able to return to work.
Even if we pay everyone more per hour, the economy will likely boom after this change. Why? William Kellogg of cereal fame tried an experiment. At one factory, he made no changes. At another, he reduced the shift by one hour, but kept the wage the same. After just a few months, the reduced shift factory showed no change, meaning that the workers almost as much done in their shortened shift as they once did. They probably weren't completely exhausted, and thus could work at an increased sustained pace without making mistakes. Further, the town surrounding the factory boomed, as the workers dedicated their new free time to social gatherings and side businesses. Reducing the hours benefited everyone, worker and employer.
Secondly, it's time for a Public Option for health care that is not dependent upon neither holding dream jobs nor paying crushing premiums. I'm talking socialized freaking medicine. Yes, it will cost money; but check it out! Thanks to the disability option, it already is! If people knew they could work for low wages but still get access to medical care when necessary, disability becomes less attractive.
Finally, I am really pissed at our nation's so-called "news." This problem has been growing for 30 years, yet it has also been under- or unreported. Ever since the rout of news budgets following the media consolidation of the '70s, reporting has gotten worse at the same time that number of telly hours featuring "news" has metastacized into Silly Town levels. Empty blather has become the norm, replacing long-form reporting backed by multi-month-and-year-long investigations. The story I cited here took reporter Chana Joffe-Walt six months. And we the consumers of the more available dreck are proving more and more uninformed, becoming more and more examples of the Dunning-Kruger Effect. The more news they watch, the less they know.
X-posted to talk_politics.