Disability Insurance: America's Secret Welfare Program, Pt. II

Disability Insurance: America's Secret Welfare Program, Pt. II

by Jordan Weissmann

Earlier this week, I argued that Social Security's disability insurance had transformed over the past 30 years into a form of welfare for middle-aged, blue-collar Americans with withering job prospects. In the face of an ever-more hostile economy, unemployed coal miners and factory workers in states like West Virginia and Michigan -- people who are physically worn down, but probably capable of at least some work -- are deciding they're better off with a meager government check and health care than they are chancing it on the market.
Not everybody agrees. Yes, the program's rolls have doubled since the early 1990's. And it's not that disabilities have become so much more common. But most of that growth, they argue, can be explained by population changes. Women entered the workforce in droves, and they now qualify for disability insurance as a result. The Baby Boomers are getting older and hence more disability prone. It's not an economic story, they say. It's a demographic story.
Fine argument, but this really, really is an economic story. And one of the clearest illustrations of why is contained in a graph recently presented by the Social Security Administration's chief actuary. It shows just how tightly the size of the disability rolls have been tied to the health of the job market, ever since reforms in 1984 made it easier to qualify for the program. http://www.theatlantic.com/business/archive/2013/03/disability-insurance-americas-secret-welfare-program-pt-ii/274390/