Disability Soars
In 2010, Social Security’s disability program cost $124 billion plus another $59 billion for Medicare (after two years, disability recipients automatically qualify for Medicare). This exceeded $1,500 for every U.S. household. For the past two decades, disability spending has increased at a 5.6 percent annual rate, compared with 2.2 percent for the rest of Social Security. As a result, disability represents nearly one in five dollars of Social Security spending, up from one in 10 in 1988.
All these facts come from a fascinating paper by economist David Autor of the Massachusetts Institute of Technology. The disability program, Autor writes, is a “central component of the U.S. social safety net” but doesn’t help “workers with less severe disabilities” to stay in the labor force (By law, recipients can’t be employed because disability is defined as the inability to work.)
Source: Robert Samuelson in The Washington Post.
That paper points out some of the key challenges for social security in the future, especially related to its unsustainable growth.
Experience rating could prove to be workable.
Some people (with the help of sympathetic Administrative Law judges) use Social Security disability as a welfare program. As such it’s a rather arbitrary way to extend benefits to some people but not others. This program should not be allowed as a way for people to essentially retire early because they are so-called sick of work.
We know that disability claims are excessive because surveys show that the rate of disability in the population is falling.
Ironically, while a disabled quadraplegic who has to type by blowing air through a straw might demand the right to work, someone with carpel tunnel syndrome might be deemed unable to work because he can’t type using his fingers.
This is very worrisome.
I think the New York Times did a story on disability claims a couple of months ago, in which they analyzed the timeframe from unemployment to unemployment insurance running out to claims for disability coverage. Essentially, they concluded that American workers are increasingly using disability, as Buster said above, to act as a backup safety net. It’s a last shot in the dark for those who don’t believe there’s a job for them out there, regardless of physical capacity.