The recently increased unemployment numbers, as bad as they are, may actually be significantly worse than reported.
The use—or abuse– of Social Security Disability Insurance (SSDI) may mask a large number of individuals who would otherwise be among those who are counted as out of work. According to Forbes, there is now one individual collecting disability for every twelve in the workforce.
The Social Security Disability Insurance program, established in the 1950s, was intended to provide support and medical care for those incapable of working due to injury or disease.
According to figures released by the Social Security Administration, 8,827,795 people were receiving SSDI in 2012, a significant increase over the 7,427,203 in 2008, the year before the current administration took office. The government spent $132 billion on the program in 2011, over twice as much as it did just about a decade ago.
The relationship between the devastated U.S. economy and the rise in disability claims is not coincidental. According to the Business Insider publication, “Since mid-2010, precisely the time millions of U.S. citizens used up all of their 99 weeks of unemployment insurance, disability claims have risen by 2.2 million. Those on disability are not counted in the workforce and are not considered unemployed.”
The rise in SSDI beneficiaries also clears up another mystery, according to the National Center for Policy Analysis. “The population is growing, yet the work force is shrinking. In 2000, the civilian labor force participation rate peaked at more than 67%. In may [of 2012] it stands at 63.8 percent…Social Security Disability claims may be having an impact…Since the beginning of 2009, more than 5 million people have applied for social security disability. About one and one-half million have started receiving benefits. In 1980, about 2.8 million workers were receiving disability, along with about 1.8 million of their dependents. By 2010, those numbers had increased to 8.2 million workers and 2.1 million dependents (not including adult disabled children.). To put this in context, in 1980 about 3% of the working age population (ages 18 to 65) received disability payments. In 2010, more than 5 percent of the working age population received disability payments.”
Investors.com notes that “since the recession ended in June of 2009, the number of new enrollees to the Social Security Disability program is twice the job growth figure. …the big factor in the recent surge is the slow pace of the economic recovery…the number of applicants was up 24% compared with 2008.”
The Brookings Institute’s Gary Burtless, notes that “disability is a fuzzy legal concept. Large numbers of jobless workers manage to meet the legal standard when work prospects are poor to nil…Sadly, once workers are enrolled in the SSDI program, few ever return to work.”
The “fuzzy legal concept” of disability is described by the Organization for Economic Cooperation and Development. Mental disorders such as depression and anxiety have increased by more than three times from the 10% of awards thirty years ago to thirty-three percent currently. The study found that “less stringent screening procedures, more attractive benefits and a waning need for less-skilled workers have bolstered SSDI claims.”
The long range effect of increasing numbers of SSDI assistance is going to be particularly dire. Business Insider notes that at current growth rates, 7% of the adult population could be receiving benefits by 2018.
The system is headed towards bankruptcy just five years from now, according to the Social Security Administration.