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January 11, 2004 THE UNEMPLOYMENT PARADOX, PART 2....More on the unemployment paradox. Over at Economists for Dean, Lerxst picks up on a New York Times op-ed that says applications for disability payments skyrocketed by more than a million between 1999 and 2003 after staying stable for several years before. If those people were counted as unemployed, the unemployment rate would have peaked at around 8%. There's more there if you want to read the whole argument. The authors aren't arguing that these people don't deserve payments, just that in the past they would have been counted as unemployed and now they're not. The unemployment rate looks lower but it's just a statistical artifact. The interesting tidbits just keep piling up, don't they? Posted by Kevin Drum at January 11, 2004 11:10 AM | TrackBackComments
That is true. People who have been borderline have seen their jobs disappear, and are trying just to get by any way they can. The media is telling us that the economy is booming..yet jobs are leaving and wages are less than stagnant. That leads to feelings of depression and desperation. Like somehow we're not good enough. There's social consequences to economic issues. Posted by: Karmakin at January 11, 2004 11:15 AM | PERMALINKI don't know here, Kevin, what sort of person gets disability payments, other than that they are disabled, but I would assume that these would be manual laborers or low-skill, low-wage jobs that require movement. Is that the sort of job that has been disappearing? I read somewhere that the new public dole for America's poor is the disability payment and the prison system (which warehouses a great many non-violent drug criminals for exceedingly long periods). If those populations were shifted into the "unemployed" numbers, what would happen? Posted by: Brian C.B. at January 11, 2004 11:30 AM | PERMALINKAlso, at a guess, employers are less willing to hire people with disabilities. In the second half of the 90's, it was an employee's market, and employers were looking to hire people that they wouldn't have before. Now it's the other way around. Posted by: Barry at January 11, 2004 11:31 AM | PERMALINKjust to give historical perspective to that 8% figure (and for future reference), here is a timeline of the great depression. I've pulled out the GNP and unemployment figures below: 1930: The GNP falls 9.4 percent from the year before. The unemployment rate climbs from 3.2 to 8.7 percent. 1931: The GNP falls another 8.5 percent; unemployment rises to 15.9 percent. 1932: This and the next year are the worst years of the Great Depression. For 1932, GNP falls a record 13.4 percent; unemployment rises to 23.6 percent. 1933: The free fall of the GNP is significantly slowed; it dips only 2.1 percent this year. Unemployment rises slightly, to 24.9 percent. 1934: The economy turns around: GNP rises 7.7 percent, and unemployment falls to 21.7 percent. 1935: Economic recovery continues: the GNP grows another 8.1 percent, and unemployment falls to 20.1 percent. 1936: Economic recovery continues: GNP grows a record 14.1 percent; unemployment falls to 16.9 percent. 1937: Economists attribute economic growth so far to heavy government spending that is somewhat deficit. Roosevelt, however, fears an unbalanced budget and cuts spending for 1937. That summer, the nation plunges into another recession. Despite this, the yearly GNP rises 5.0 percent, and unemployment falls to 14.3 percent. 1938: The year-long recession makes itself felt: the GNP falls 4.5 percent, and unemployment rises to 19.0 percent. 1939: GNP rises 7.9 percent; unemployment falls to 17.2 percent. Posted by: rebecca blood at January 11, 2004 11:32 AM | PERMALINK"I don't know here, Kevin, what sort of person gets disability payments, other than that they are disabled, but I would assume that these would be manual laborers or low-skill, low-wage jobs that require movement. Is that the sort of job that has been disappearing?" Carpal tunnel would impair use of a keyboard. Vision problems might make staring at a screen for a length of time painful. Frequent sick days from any number of different conditions. Or Inability to travel, or difficulty working shift work. Posted by: Barry at January 11, 2004 11:33 AM | PERMALINKIn strong labor markets, and/or with suitable public help disabled people may be able to find a job they can do and keep. Employers may be willing to make allowances for them, public services might provide transportation or smooth over some of the edges in other ways... And, of course, the big issue is I'm sure health care. If you have a chronic ailment, better to be on disability and qualify for Medicaid than not. Posted by: Atrios at January 11, 2004 11:38 AM | PERMALINKYeah, I normally eschew anecdotal evidence, but here it may serve some qualitative purpose. I know two people that are about to be laid- off due to privitixation of a government operation (they're both clerical type staff). Both have been out looking for alternative employment, yet cannot find anything that pays and has healthcare benefits. So now they are both going to do their best to qualify for disability; one due to some kidney problem and the other due to carpel tunnel syndrome. Odd that these conditions hadn't affected their ability to work until the lay-off was announced. I suspect that the NYT is on to something here. Thanks Kevin for the ongoing investigation into the current unemployment situation. I would add that when we hear talk of the growing economy it would be nice if the overly entheusiastic reporters (often stock brokers) wouls clarify the terms(eg) the growth in productivity that we are constantly told is a sign the economy is growing, is not. Productivity growth means that you are getting more productivity from your capital. If a worker was producing 5 widgets an hour and now he is producing 10 widgets an hour, that is productivity growth. To some extent productivity growth signals a lower employment rate because firms are getting more productivity with less labor. I won't go into the GDP growth figures, but suffice it to say not all increases in GDP are equal. You have to have a detailed analysis of where the growth is coming from. Anyhow, thanx again Kevin for following this important election year topic.
"If those people were counted as unemployed" Why in the hell would you do that? Hey, if employed people were counted as unemployed, the unemployment rate would be 100%! Shocking! Posted by: Al at January 11, 2004 11:43 AM | PERMALINKWhat the hell? Al, it's time to move on. Posted by: scarshapedstar at January 11, 2004 11:53 AM | PERMALINKIf this was Europe we would take some of the tax revenue and give these people who could not find jobs some money. Since this is the United States, we say to hell with them and just too make sure that we are not tempted to give them anything we reduce taxes, especially on the rich. Even though I am employed and would pay higher taxes under the first scenario, I prefer it to the second. Posted by: ____league at January 11, 2004 11:55 AM | PERMALINKBrian C.B.: I wouldn't make that assumption. I suspect that many of these people are middle class and clerical types with complaints such as carpal tunnel, bad backs, etc. More data is needed here, of course, but I'd hold off assuming the disabled are all manual laborers. Posted by: Kevin Drum at January 11, 2004 11:57 AM | PERMALINKOT but This morning Faux News was trashing ONeill and his book. They then asked for comments by phone or email. (below is the gist of what I then heard) The first guy on the phone said "I am from Texas and I don't think we should just dismiss what he says. Next is a woman who says "I watch Fox News a lot but ... Third also was willing to consider what ONeill said. Then they went to the emails. Big stack in their hands. They shuffled through them and found two that said "Bush is wonderful and how dare ONeill criticize him." Then they quit showing the phone number and the email address. Maybe even Faux News viewers have reached their limit? Posted by: ____league at January 11, 2004 12:00 PM | PERMALINKscarshapedstar - what the hell? The NYT op/ed is asinine. The "books" are not "cooked" - more people are taking advantage of more generous social security payments. No f'ing kidding! But the question remains, why would you count people on disability as unemployed? Just to get a higher "unemployment" number? Posted by: Al at January 11, 2004 12:11 PM | PERMALINKOK, I'll give you the exact 2 sentences that makes the op/ed so asinine: "The point is not whether every person on disability deserves payments. The point is that in previous recessions these people would have been called unemployed." Says who? Maybe these people would have been, you know, EMPLOYED! It's as if the only people who apply for disability are people who otherwise would have been fired. Posted by: Al at January 11, 2004 12:15 PM | PERMALINKAh, so it's a compassionate conservative thing. Posted by: scarshapedstar at January 11, 2004 12:21 PM | PERMALINKPosted by Al: "Says who? Maybe these people would have been, you know, EMPLOYED! It's as if the only people who apply for disability are people who otherwise would have been fired." Why do you toss out your logic so loudly when it's so full of noisy holes? There are only so many jobs. If they were "EMPLOYED" then others would not be. Presumably, those others would not also be on disability and, thus, would have been included in the unemployment rate--raising it. No one said the only people applying for disability are those who otherwise would have been fired. The point being made is that the -rise- in people applying for disability has caused the unemployment rate to appear lower than it otherwise would have been. Posted by: jayarbee at January 11, 2004 12:58 PM | PERMALINKI was sent a fascinating bit of statistical analysis which profiled new disability applicants; blue-collar white males are disproportionately represented in the total. The authors hypothesized that these guys are in a real vise as a result of prevailing policy. There are fewer jobs total in blue-collar work, as many previously viable manufacturing jobs which could be done by minimally educated persons are exported due to lowballization. Of those jobs which remain, there is severe pressure from below because of subminimum-wage illegal immigrants, who are preferred by employers for reasons in addition to their low cost and lack of benefits: illegals are quite docile and reliable because they fear being sent home. What's left for the blue-collar white guy? Move up into management? Not only does that require educational credentials which they don't typically have, but a large share of those upward avenues have also been closed off by preferential hiring of women and minority applicants. At least some of these guys are clearly gaming the system by applying for disability. But it's hard to blame them; they're out of options. This is anecdotal without an URL, but I'm away from my records at the moment. Will dig for the article and file it if I can. Posted by: marquer at January 11, 2004 01:03 PM | PERMALINKMy question, and I don't have the answer, is how welfare reform plays into this. It would seem that in previous decades that many of the "discouraged" ended up on welfare. Because of welfare reform, the rolls are now smaller. So my question, did we just move the unemployed from welfare to disability rolls? Anyone have any data on the total size of welfare plus disability over the years? Posted by: Proper Response at January 11, 2004 01:25 PM | PERMALINKPosted by marquer: "What's left for the blue-collar white guy? Move up into management? Not only does that require educational credentials which they don't typically have, but a large share of those upward avenues have also been closed off by preferential hiring of women and minority applicants. ... This is anecdotal without an URL, but I'm away from my records at the moment. Will dig for the article and file it if I can." Even with the article, any point regarding a statistically significant number of blue-collar white males turning to disability benefits as a result of management opportunities going disproportionately to women and minorities will remain anecdotal for its absurd face. Only a small percentage of the males in question would ever make it to management, no matter such dubious preferences -- which, even if they exist, would not exclude all the males who might rise to management; and among the portion who are ostensibly shut out, certainly only a small percentage of them would resort to a disability scam in favor of simply continuing to work their blue-collar positions. The very suggestion of women and minorities somehow being a factor in the matter at hand smacks of sexism and racism. Posted by: jayarbee at January 11, 2004 01:27 PM | PERMALINK"The very suggestion of women and minorities somehow being a factor in the matter at hand smacks of sexism and racism." ... Wait a minute...what he said might be total bullshit, but let's just say minorities and women really ARE being given preferential treatment. Let's just assume that. Now...remembering that we're making an assumption...if this is true, then pointing out that it is true is racist and sexist? Posted by: rat-ore at January 11, 2004 02:43 PM | PERMALINKAgain, just anecdotal evidence, but from a different source .... the Americans with Diabilities Act (which is supposed to bar discrimination in employment against disabled people) is invoked far more often for invisible "disabilities" like chemical sensitivity, charpel tunnel, back injuries, etc., than for the classic deafness/blindness/spinal cord injury that people thought it would mostly cover. It would be interesting to see a breakdown of the increase in disability claims by the disability claimed. I think it's very plausible that some of the increase is due to obesity (and diabetes, which really will disable and kill you) but I'd be curious to know how much more it is due to these new phantom illnesses like acute sensitivity to chemicals. Posted by: Diana at January 11, 2004 02:55 PM | PERMALINKAs someone alluded to above, the gains in this so-called recovery are disproportionately going to corporations. Gains are due to productivity gains, which mean getting more from the same workers, or using machines to operate more efficiently. Corps are not sharing the gains opf the recovery with workers. Incomes are stagnating. Debt is rising. When interest rates start to go up, and people start losing their houses, then what? Who buys the stuff? How does the economy keep going? Sure, we can sell stuff to the Indians and Chinese, but what happens here? Posted by: Mimikatz at January 11, 2004 02:56 PM | PERMALINKThis is true. Beyond Kevin's reciting it, I happen to have a friend who's brother has discovered this scam. There's nothing wrong with this guy -- I know him well -- he just feels that his genius isn't recognized in the marketplace, and that he's been massively underpaid for years. He's computer programmer type guy. He claims now that he suffers from depression. Can't work because of this. If you talk to him, he'll admit that $100,000 a year jobs aren't easy to get anymore -- although he certainly had one -- before being laid off. He'll even grant you that the changes in the market were inevitable -- BUT THAT THEY SHOULDN'T HAVE HAPPENED TO HIM. His viewpoint is that he's "depressed" -- why should he work for less than he's worth? Believe it or not, he got disability. I don't know how. What I do know is that it's a massive abusive of the system. It makes me sick. Anyway, he's off the unemployment rolls. Posted by: Tony Shifflett at January 11, 2004 03:09 PM | PERMALINKIt sounds like Kevin's compassionate liberal reaction is that of course all these new people on the disabled rolls must truly be disabled. I have a friend I went to grad school with who receives disabilty payments for mental problems. He now spends his time traveling around low cost parts of the world and stays with parents when he is back in the U.S.. I do not know the details of his medical condition, but I really question whether he is truly disabled. This is a program that could use some additional scrutiny IMO. Of course Bush is mismanaging everything else so why should this be any different. Posted by: GaryL at January 11, 2004 03:34 PM | PERMALINKDo any of you who think that people on disability are scamming the system know how much disability payments amount too? SS disability payments are very low. Private disability policies normally pay 60% or less of what the person formerly earned. Sure the availability of disability is going to lead to some people with real conditions who would like to work but could not get jobs to apply for disability. I challenge any of you to find several people who chose disability pay over a real job. Quote me job names and pay and disability pay numbers please. Posted by: ____league at January 11, 2004 03:44 PM | PERMALINKThere is an entire private investigation industry set up to prove workman's compensation beneficiaries are frauds. Why is disability any different? Anybody on disability who is healthy and sane enough to be photographed playing golf is stealing taxpayer money. Posted by: me oh my at January 11, 2004 04:24 PM | PERMALINKjayarbee responds:
The posting suggested that they turn to disability because of an interlocking complex of factors, of which affirmative action is only a single one. I would suggest that a careful re-reading is in order. The very suggestion of women and minorities somehow being a factor in the matter at hand smacks of sexism and racism. Oh, dear. Am I supposed to turn tail and run, rhetorically speaking, because I've been accused of the dreaded "isms"? I suppose it's part and parcel of the present dreary age, in which one cannot, for example, critique the past antics of the Rev. Sharpton without being called racist, or, for a further example, be permitted to take issue with the smallest bit of Israeli government policy without being tagged as an anti-semite. Sheesh. Hypersensitive PC speech codes were shopworn in the 1980s. Let me postulate that the plural of anecdote is not data. That said, I have seen undeniable reverse discrimination against white males attempting to move into management ranks. Someone did it right in front of me, with my implicit collusion. In my last management post, I had a technical subordinate, sort of the Valley equivalent of blue-collar, a wire-rerouting guy, who was puppyishly eager to move up out of his entry-level position to supervise others. I thought he showed some promise, and floated it up the memo ladder. My boss called me in the next day, and said, "Tell him that he's much too valuable where he is. Flatter him as best you can. And don't let this come up again." He went on to relate that HR had required our department to flag a certain number of junior management positions as aff-ac slots. He then observed that making this known to the candidate would possibly result in a reverse-discrimination case, and cautioned me to say nothing of the matter to the person, and to put nothing in writing regarding the matter. It was made clear to me by him that it was a hot potato which he had no intention of grasping, and that my own career prospects would be jeopardized unless I did exactly as he said. I don't think that this is hugely widespread, but there is enough of it going on that, in concert with the other huge economic and social pressures on blue-collar white guys (many of which are pressures which afflict all low-income workers generically), it can and does constitute a discouragement to work, and a corollary encouragement to game the system with bogus disability claims. rat-ore chimes in:
Thanks, RO, good to see that someone gets it. There's a difference between descriptive comment ("this is how the situation appears to me to be") and prescriptive comment ("this is how I would prefer for the situation to be"). For some reason, many people have incredible difficulty distinguishing between the two. Which often leads to these hasty invocations and accusations of "isms". (Including on the right. Remember all of the cries of "defeatism" when various persons expressed principled opposition to the proposed military adventure in Iraq?) Go figure.
Paul Solman, economics reporter for The NewsHour with Jim Lehrer, did long piece on this last July. Here is the link: Posted by: Mark S. at January 11, 2004 04:38 PM | PERMALINKWorkmans comp fraud is much more likely because workmans comp may pay
full or nearly full salary. Even there how much fraud actually is not
detected? Any time an organization is paying out tens of thousands a
year every year into the future they are going to do some checking. Posted by rat-ore: "Wait a minute...what he said might be total bullshit, but let's just say minorities and women really ARE being given preferential treatment. Let's just assume that. Now...remembering that we're making an assumption...if this is true, then pointing out that it is true is racist and sexist?" Even the most casual reading of my post should have revealed to you that my remarks were already giving gender and race preference the benefit of assumption. Let's even suppose the preference was demonstrated statistically. How does such a preference demonstrate any causal relationship between that preference and an increase of disability applicants among white male blue-collar workers? Any postulation to that effect could be based only on unfounded notions, which are the very foundation for prejudicial thinking. It would be equivalent to noting an increase of shift managers at McDonald's named Mary and a coinciding increase in flu symptoms among male counter workers, afterwhich a conclusion is drawn that McDonald's hiring of managers named Mary caused their male employees to get the flu. Of course, those predisposed toward blaming Marys for negative outcomes would be more likely to suggest such a link of causation, but making the suggestion reveals their prejudice. Again, I refer you to my previous post. There are only so many management positions which become available. And only a tiny percentage of male blue-collar workers would even be considered for them. And even a sudden increase in the hiring of female and minority managers that was HUGE--say, 25%--would affect but a tiny percentage of that tiny percentage of male workers who are considered for promotion, of whom, only a tiny percentage of those not promoted would make the decision to apply for disability. A tiny percentage of a tiny percentage of a tiny percentage. If the broadest possible assumptions are made to account for a link based on what amounts to nothing more than a puff of thought, the impact on the overall rate of disability applicants would be negligible. As to more recent remarks posted by marquer: "Oh, dear. Am I supposed to turn tail and run, rhetorically speaking, because I've been accused of the dreaded "isms"?" You were not accused. My "smacks of sexism and racism" comment pertained to the author of the article you were referencing. "Smacks," by the way, means "suggests," not "constitutes." But as you are apparently taking ownership of the viewpoint expressed in the article, you can rightly apply my assessment to your own willingness to make suggestions which have no foundation. "I suppose it's part and parcel of the present dreary age, in which one cannot, for example, critique the past antics of the Rev. Sharpton without being called racist, or, for a further example, be permitted to take issue with the smallest bit of Israeli government policy without being tagged as an anti-semite. Sheesh. Hypersensitive PC speech codes were shopworn in the 1980s" Your straw men have nothing to do with anything that has been discussed by me. You may critique Sharpton and Israeli policy all you like without concern that I'd dismiss it as racist, unless it included conclusions based on nothing more than race. "I have seen undeniable reverse discrimination against white males attempting to move into management ranks. Someone did it right in front of me, with my implicit collusion." Whether true or not, this is irrelevant unless you also have undeniable evidence that a blue-collar white male's attempt to advance to management was thwarted by the hiring of a woman or minority, AND that he subsequently and causally made the decision to apply for disability. "There's a difference between descriptive comment ("this is how the situation appears to me to be") and prescriptive comment ("this is how I would prefer for the situation to be"). For some reason, many people have incredible difficulty distinguishing between the two." Your contention about my "incredible difficulty" ignores your own difficulty in understanding that when a "situation appears to [you] to be" something for which there is absolutely no evidence whatsoever that it IS that way, it is due to your own preconceived notions and prejudices. Posted by: jayarbee at January 11, 2004 05:12 PM | PERMALINKjayarbee, I found marquer's original comment iffy, not because whites may be passed over for promotion (on that count I have no clue) but because they might then go on disability in significant numbers. Yes, that's stretching it all out of shape...but it's not racism so much as mere unreason. A genuine charge of racism (in real life, not here in blog-land) can ruin careers, and shouldn't be lightly given. Posted by: rat-ore at January 11, 2004 05:29 PM | PERMALINKPosted by rat-ore: "A genuine charge of racism (in real life, not here in blog-land) can ruin careers, and shouldn't be lightly given." Rather doubt that it often occurs, in the absence of convincing evidence, that the mere charge of racism has such affect. Most such charges are effectively put aside by means available to the powerful, more likely damaging the accuser than the accused. Will keep your advice in mind, though, should I ever decide to make a "genuine charge of racism." Really can't think of anyone to whom it applies whose ruined career would not be just desserts. Posted by: jayarbee at January 11, 2004 05:48 PM | PERMALINKThere used to be a number of programs that subsidized the employment of people with disabilities. If you shop at Wal-Mart you may have seen workers that have developmental disabilities collecting carts or cleaning. Many of those programs have been eliminated in the current "downturn" and the participants have returned to their SSI/disability payments. They don't count as unemployed, even though they are. If any of you are considering scamming the system, it might be possible, but I personally know two people who are disabled with back problems that can be seen seen in x-rays and that are the result of documented incidents. It took one five years to receive assistance, and three years for the other. The payments are in the range of minimum wage, but they get medical coverage that both need. Posted by: Bryan at January 11, 2004 05:50 PM | PERMALINKPosted by Bryan: "If any of you are considering scamming the system, it might be possible, but I personally know two people who are disabled with back problems that can be seen seen in x-rays and that are the result of documented incidents. It took one five years to receive assistance, and three years for the other." Precisely. One does not simply declare one's self to be disabled then sit back and watch the money pour in. It seems much more reasonable to me to assume that there are far more genuinely disabled persons who are denied benefits than there are those who are able-bodied and receiving them. Posted by: jayarbee at January 11, 2004 06:02 PM | PERMALINKThere are two ways to look at this result. 1. Current numbers are "too low" because the disabled are no longer counted as unemployed because now they qualify as "not in the labor force". 2. Or past employment/unemployment numbers were "too high" those people who would have used disability, but didn't and hence became unemployed and were counted as such. Also Jayerbee, it is you who are being illogical, not Al. The point Al is making is that with the relaxing of disability requirements people who had jobs are now leaving them for disability. Now some would have left their jobs anyways and been considered unemployed and some would not have left their jobs and struggled along with the disability (this latter is especially true for the "fake" disabilities such as hard to quantify things like "back pain"). So saying everybody who is now on disability should be considered unemployed is pure bravo sierra. I haven't read the research on this so I don't know if that is what they are arguing. Also, I don't think it is accurate to call this a statistical artifact, but actually a result of policy. Policy changed so peoples behavior changed as well. Wow, big shock! Posted by: Steve at January 11, 2004 11:29 PM | PERMALINKI can speak to most aspects of this from personal experience. I used to be a computer programmer. A damn good one, too. On a scale of one to ten, I was a nine-point-something (I've known a couple of tens, for what it's worth, and that's how I know I wasn't one). As a point of reference, if you've ever used a credit card at a Kinko's, I'm a lot of the reason the correct charge made it to your statement (and if you've ever signed for an order there on one of those signature pads, that's just about 100% my code at work). Anyway, a couple of years ago, I got sick. And sicker. And sicker still. And aside from the overt physical symptoms which caused me to miss more and more work, I began to suffer from increasing degrees of cognitive impairment. The code I wrote was still good code (in the nine years I was at this job, we did not have to spend so much as one single hour fixing a bug in my delivered production code), but I was having more and more trouble knowing what code to write, and more and more difficulty following the interrelationships between different bits of code. Even after I was diagnosed with Myalgic Encephalomyelitis, I continued to work, as best I could, at my job. I worked at a small company, and my bosses worked with me to try to structure my work in ways which minimized the disruptions of my condition, even as my doctors tried a truly impressive array of different treatments (without much hope, really -- there isn't a treatment, and there isn't a cure, although some folks do get lucky and hit upon some regimen which helps). Thanks to the fact that I had spent nine years working in the same code base, I had enough "muscle memory," so to speak, to hang on by my fingernails. I wasn't really pulling my weight, but the drag on the company was manageable, the opportunity cost of replacing me was high, my bosses were nice, and there was still a chance that things would improve. Until the company hit a wee bit of a rough patch, that is. Not a huge, catastrophic rough patch, but a rough patch nonetheless. And all of a sudden my drag on the company wasn't manageable. They had to cut one programming position (they also cut one marketing position), and I was obviously it. Heck, I would have let me go. As it turned out, my condition has continued to deteriorate; there's no way I could have maintained employment for much more than a few months longer, even if things had been going swimmingly. But still, there was a window of time during which I would have been employed if business were better, despite being functionally disabled. Repeat this often enough throughout an economy, and you may see a statistically significant number of people go straight from "employed" to "disabled." In happier times, businesses have more room to work with valuable employees, rather than risk losing their expertise. [I'll discuss the Disabilty process next] Posted by: Ray Radlein at January 11, 2004 11:35 PM | PERMALINK"I suppose it's part and parcel of the present dreary age, in which one cannot, for example, critique the past antics of the Rev. Sharpton without being called racist, or, for a further example, be permitted to take issue with the smallest bit of Israeli government policy without being tagged as an anti-semite. Sheesh. Hypersensitive PC speech codes were shopworn in the 1980s" - Marquer Your straw men have nothing to do with anything that has been discussed by me. You may critique Sharpton and Israeli policy all you like without concern that I'd dismiss it as racist, unless it included conclusions based on nothing more than race." - Jayarbee Jayarbee, you may not dismiss these things as racist or anti-semite, but a number of people would. And in the case of Israel, the threat of being tarred as an anti-semite has been a MAJOR impediment to a rational discussion of the Arab-Israel conflict in the United States. Antoinetta III
I researched the process of applying for Social Security Disability, and I began to collect the appropriate medical evidence, both from my regular doctor, and from specialists. And I began to fill out forms. I took my time, in an effort to maximize my chances of being approved for Disability. Myalgic Encephalomyelitis is one of those slippery conditions which lacks immediately obvious overt physical signifiers, and which lacks a single comprehensive medical test; as such, it has historically been difficult to get approved for SSA Disability for it, regardless of how impaired you were. Since the aforementioned procedure changes, it has gotten somewhat easier, but it's still not a gimme. So I really tried to get all my ducks in a row, and express as accurately and completely as possible just how my condition had affected my ability to work. Eventually, I had all the forms filled out, all the supporting data ready, and I submitted my claim. Several months later, I was turned down. Only about 30 percent of all Disability claims are approved on the first try; as you can imagine, most of those tend to be the most obvious of the claims (paralysis, multiple amputations, organ failure, blindness, whatnot). When a claim is denied, the claimant has some period of time to request a reconsideration. I did this immediately, of course. In the reconsideration phase, they basically take your folder and hand it to a different claims evaluator; only about 10% of all claims succeed at this level. A month or more after I requested reconsideration, they sent me some additional forms to fill out. I returned those forms promptly. The SSA office handling my case is so overworked that it took them a full month to open my letter with the new forms, put them in my folder, and send it back to the claims people. That was a month ago, now; it'll probably be a couple of months before they turn me down again. Once a claimant is turned down for reconsideration, the next step is to go to the courts. The smart petitioner hires a lawyer from the National Organization of Social Security Claimant Representatives. The standard fee for their services is one-fourth of the back award (with a ceiling of $4000 or $5000) owed to the claimant, if the claimant wins. Armed with a lawyer who specializes in this sort of thing, the claimant goes to an Administrative Law Court and argues their case before a judge. The Social Security Administration does not have standing to argue against them. It's just you, a lawyer who specializes in these claims, and a judge who specializes in these claims. The majority of claimants who take their case to court win (that's one reason Congress realized that they needed to streamline the process somewhat -- it was obvious that too many qualified claimants were having to wait too long). By that time, of course, years will often have passed. And what is the reward at the end of this process? The payment amount is equal to what your Social Security payments would be if you retired today -- in other words, without all that extra money you intend to earn between now and when you're 65 or whatever. The SSA even has a program -- it's Open Source, for what it's worth -- that you can run against your earnings history to see what you would get. In my case, it works out to roughly $1,500 a month. This may come as a shock, but that's not quite the going rate for experienced, hard-core programmers. On the other hand, it's $1,500 a month more than I would have otherwise, given that a good week for me these days is one in which I am healthy enough to make one trip to the pharmacy to pick up my fistfull of meds (last week wasn't good, for what it's worth). Benefits are only 85% taxable, at most, however, which is something; and after two years (dated from the start date of your claim) you can get Medicare as well. Posted by: Ray Radlein at January 12, 2004 12:23 AM | PERMALINKNow, then: If an experienced computer programmer, with a commensurate salary history, works out to $1,500 a month, you can well imagine what a teacher, or a line worker, or a clerical worker of my age would receive in benefits -- after, remember, up to several years of effort expended in qualifying for them. Somehow, I don't see the "rewards" being entirely worth it for anyone who has any other options available to them.
On the other hand, the opportunity cost before you are approved is enormous, thanks to the extreme time and effort required to get approved. Shortly before Christmas, I was out shopping on one of my very rare "good" days, when I received a call from a headhunter on my cell phone (well, my wife's cell phone, but still). The offer sounded interesting; but even if I thought that there was some chance I would be physically capable of doing the job (ha!), attempting to do so would mean throwing away the entirety of my efforts to date, and starting over from scratch (down to resetting the start date of my disability for Medicare purposes) when I discovered that it was a no-go. So that's something to consider: The same lengthy application process which tends to prevent false claims also tends to lock individuals in to seeing it all the way through once they have started it. Surely there are some folks who have passed up opportunities which might have taken them off the rolls of the Disabled because they couldn't afford the risk. Posted by: Ray Radlein at January 12, 2004 12:47 AM | PERMALINKWell unsurprisingly Kevin gets it wrong. First, in looking at the BLS data, even adding all 1,000,000 people who filed for disability to the number of unemployed and those in the labor force then unemployment peaks at 6.9%. Second, it is probably incorrect to add all 1,000,000 people. The research that is mentioned in Kevin's link is only for low skilled workers and based on the model they have developed it is not clear that those who are higher skilled (and thus tend to have higher wages) would have as strong an incentive to move over to disability when the labor market conditions worsen. Link to my post which actually links to the initial research on this. Posted by: Steve at January 12, 2004 10:32 AM | PERMALINKSteve, i'm trying to find (i spent 5 minutes looking through the various links) who said 8% in the first place, but what of it if the correct number is 6.9%? The question on the table for analysis is understanding the employment situation in america today, and if one reason that unemployment numbers today look better than those of the past because of the disability factor, who really cares whether the number would be 6.9% or 8.0%? Second, i have no idea what your second point means. Are you denying the empirical data about the number of disability claimants? If you aren't, then what exactly are you talking about? If anything, people with higher incomes who can't find a job have more incentive to try and get disability, because typically people with higher incomes are locked into higher expenses (such as a higher mortgage or more expensive car payments).... Posted by: howard at January 12, 2004 11:10 AM | PERMALINKCause during the Clinton admin, nothing _ever_ "piled up"... Posted by: Jake at January 12, 2004 12:41 PM | PERMALINKYou have a pretty nice blog. English is not my native language but it
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