Tuesday, March 26, 2013

Disability: The New Welfare

From, of all places, National Public Radio, a most insightful piece on the explosion of disability in recent years.

They are not the first to notice this rapid rise, but they provide a lot of insight into how it has happened.

Essentially, it is too easy to get on disability, even on the basis of vague or ill-defined medical problems. When one looks at the vastly increased numbers in recent years, it’s hard to avoid the conclusion that most of these people could work. But why do that, when you can draw a regular check?

In the 1990s, led by the state of Wisconsin, “welfare” (technically, AFDC) was reformed, and women on the program required to work. Welfare had long been stereotyped (with considerable justification) as a program that discouraged work and supported idleness. Thus highly effective work requirements were put into effect.

But while “welfare” had a bad reputation, few people had any desire to get tough on people who were “disabled.” It’s not your fault, after all, if you have a medical condition. Of course, there are medical conditions and there are “medical conditions.” There has been a marked shift over time in the composition of the “medical conditions” that allow people to be on disability. Conditions that can produce a hard diagnosis (heart disease, cancer, respiratory disease) have either remained constant or declined as a proportion of those on disability, while back pain and mental illness have radically increased. But the American people have not become less healthy over the past (say) 30 years.

Ironically, the growth of disability has vitiated another piece of Federal legislation: the Americans With Disabilities Act. That Act was based on the assumption that people with disabilities can work, especially if employers are required to make an “accommodation” for their disability. But the trend, unfortunately, has not been to get disabled people into the workforce, but to take them out of the workforce with government assistance.

This, like the growth of AFDC in the 60s, 70s and 80s, is another example of how good intentions can get out of hand and produce highly negative results. The graphs below tell the story.



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4 Comments:

Blogger jimspice said...

MediaMatters has a fairly thorough fisking of the report: http://mediamatters.org/blog/2013/03/26/right-wing-media-hype-nprs-myth-filled-disabili/193263 and NPR has already walked back a bit.

9:18 AM  
Anonymous Anonymous said...

Oh, Dr. McAdams. Your characteristic disregard for facts has led to yet another embarrassingly naïve post. Let’s dissect a few of your claims:
If welfare reform led to more people on disability, one should expect that the projections for DI expenditures made shortly before welfare reform was passed to underestimate the cost of the program, say, a decade out. However, if you take a look at the 1996 Social Security Trustees Report from 1996 (prior to welfare reform), you see that DI is expected to cost 1.93% of payroll in 2005 (http://www.ssa.gov/history/reports/trust/1996/tbiif13.html). However, the actual expenditure was only 1.85%, or four-percent below the 1996 projection (http://www.ssa.gov/oact/tr/2012/IV_B_LRest.html#452803).
The cost did explode in recent years (reaching 2.48% in 2011), but the explanation for this is rather simple. There are nine million fewer jobs in the economy than the pre-crisis trend would predict. At the height of the crisis, there were over six unemployed persons per job opening. Even today that number is greater than three (http://www.bls.gov/web/jolts/jlt_labstatgraphs.pdf). Simply put, there IS NOT a job for anybody who wants to find one. That’s simple math, and I’m not sorry if it doesn’t conform to your view of the unemployed as a bunch of lazy moochers. So yes, there probably are people currently receiving disability benefits who do not need them from a pure health perspective. But that is a consequence of temporary labor market conditions. When the labor market improves there will be a sharp decrease in DI spending; the 2012 Social Security Trustees Report predicts spending to drop below the projections made in 1996.
I’ve conceded that there are people receiving benefits who probably should not, just as there are people who deserve benefits but are denied. The administration is extremely understaffed, with huge backlogs, so some people slipping through the cracks is not a surprise. If you want to improve efficiency you could hire more staffers, though I’m sure you would oppose such a change. However, the fact that the distribution of claims has changed over time does not prove that there has been an increase in fraud. The relative incidence of back pain has (predictably) risen with an aging population. This has been proven, but I also speculate that behavioral factors are a contributor (less emphasis on posture and more hunching over computers). Mental health problems have also increased in recent decades, and not just in terms of the number of diagnoses. On the other hand, cardiovascular disease has been declining, and although the trend has slowed in the past decade or so, it is well down from 1961. I’m also curious what you mean when you say “Americans are getting healthier.” It is true that overall life expectancy has increased, but not for the poor. The life expectancy of poor white males is actually declining.

I know you like to jump on any story that portrays programs that help the needy as wasteful handouts to moochers, but when what you write is so blatantly out of line with the facts you lose credibility. If your misleading claims were limited to this silly blog I wouldn’t really care, but the fact that you present similar misinformation to students who don’t know better is a disgrace to Marquette University.

10:17 AM  
Blogger John McAdams said...

Jimspice,

I looked at the Media Matters thing, and all it is is blather. It's a simple fact that disability claims have skyrocketed, and spite of there being no reason to believe that more Americans are disabled. It's true that an aging population could explain part of that, but things like the Americans with Disabilities Act and better medical care should have counterbalanced that.

11:55 AM  
Blogger John McAdams said...

Anonymous,

the explanation for this is rather simple. There are nine million fewer jobs in the economy than the pre-crisis trend would predict.

So what you are saying is that disability is not the "new welfare," but rather the new unemployment insurance?

If disability is "the new unemployment insurance," then why have disability rolls increased over the page 3+ years as unemployment has decreased, and jobs have been added?

And why are there so many fewer jobs? Doesn't this suggest problems with current policy?

So yes, there probably are people currently receiving disability benefits who do not need them from a pure health perspective.

Glad you admit that.

In calling disability the "new welfare," I was not embracing a literal causality between the decline of welfare and an increase in disability (which the NPR thing seemed to do) but rather saying that disability is "the new form of virtually permanent government dependency."

The administration is extremely understaffed, with huge backlogs, so some people slipping through the cracks is not a surprise.

Glad you admit that.

I know you like to jump on any story that portrays programs that help the needy as wasteful handouts to moochers,

Apparently you are unwilling to admit that government programs have problems, and that the welfare state has an inherent momentum of increasing dependency.

12:15 PM  

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