Several different sites (Calpundit, A Fistful of Euros, Frolic) linked to this business about a rise in applications for disability benefits somehow masking the true unemployment rate. It's definitely the case that more people apply for disability benefits as the employment situation worsens (I can tell you this from experience, since I used to work for the Social Security Administration), but unless the government is somehow approving more applications - which is highly doubtful - it's hard to see how this would pollute the employment numbers. Even if you want to argue that people recieving disability benefits should be counted as unemployed, that fact that they're not wouldn't hide anything, since our only point of reference is past statistics, calculated the same way.
The interesting question to me is whether folks who are in the chute (a grueling 6-9 month process exacerbated by the federal government's use of underpaid state contractors to decide medical facts) are counted as disabled or not, since the government requires applicants to be unemployed while their applications are considered.
Hi,
Im one of the people you linked to (on Fistful).
Really I can't comment on the construction of the employment numbers in the US from where I am.
However, the issues I think are three. Firstly, this rise can be seen in itself as prima facie evidence that the job situation is getting more complicated in the US (perhaps this is obvious, but some people do seem to want to dispute it). Many macro issues seem to me to hang on this.
Secondly, The demographic factor. The fiscal sustainability of the OECD economies seems to depend on raising participation rates, especially over 55, and in raising the retirement age. Again we have soem evidence here that this is going to be difficult. What we need are realistic policy projections.
Thirdly, I don't know the situation in the US, but here in Spain when someone applies for long term disability, most of the successful cases come about when the employer is involved, that is there is legal and medical assistance in proving the disability. The employer has an interest in this since normally they want to practice age churn, but often they may not be as hard hearted as they are made out to be, and want an amicable solution, paid for by the social security system. I don't know if this has any relevance to the US system?
Wow, I just saw, you like Raymond Roussel and Oulipo. Keep up the good work.
I would definitely take this phenomenon of increased disability applications as a sign of a worsening employment environment. I also agree with the suggestion you made at Fistful about obesity as a likely cause, at least for the trend over years an years. That trend should continue, even taking into account a recovery, since the baby boomers are getting older and will be more likely to apply for disability.
In terms of the disability program here, it sounds like it's very different from the situation in Spain, in that employers have almost no involvement in the applicatin process. They contribute to the program of course, through employee wages and direct taxes as well, but this seems to be the full extent of their involvement with the social insurance system. I will say that there seem to be a lot of private pension plans and disability programs, so in a sense they cooperate with what the government is doing by integrating the systems. I assume this is the result of the fact that the American system is less comprehensive...
No ideas here on how to increase participation over 55 - over here we've had a complete failure on the part of the governing admin to take responsibility for the looming failure of the Social Security system, and policy suggestions run the gamut from privatizing the system to increasing the retirement age to 70. I suspect the US employment problems are less severe though, since people generally have longer careers here.
Maybe this is one of the issues Bush is trying to get at with his immigration reforms? Keeping immigrant workers on a three year leash seems like a sure way to keep them in low paying jobs, essentially servicing the Social Security and Medicare systems... but if you ask me that's a pretty sick moral equation.
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