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April 29 2019

Disability Rolls Falling in Good Economy

by Charlotte Hays

Social Security's Disability Insurance has been one of the most abused programs in government.

As early as 1995 in a groundbreaking article Heather Mac Donald predicted that SSDI would be  "welfare's next Vietnam."

But something strange is happening. SSDI rolls are actually falling. The Wall Street Journal sums it up this way: "Faster growth and less fraud draw more people into the workforce."

The Social Security Administration (SSDI is under their umbrella) reports that “applications and award rates are both near historic low levels.”

The rolls have declined by 260,000 since 2014. This might seem small, but it meant a savings for the disability trust fund of about $3.7 billion in one year.

According to the Wall Street Journal, SSDI claims have been declining since 2010. Tightening up on reviewing applicants and being on the lookout for fraud contributed to the decline.

Fraud prevention, however, is not the whole story. Job growth is also a big reason. The Journal notes:

The main reason for the decline is that better economic opportunities have attracted workers who had filed for disability after losing jobs. According to the Bureau of Labor Statistics, the number of disabled in the workforce hit a trough of 4.5 million in January 2014 but has since grown by 1.5 million. The labor-force participation rate for disabled working-age men has climbed to 38% from 30%. This suggests that for many Americans disability had become another form of unemployment insurance.

Notably, the modest increase in the national labor-force participation rate over the past several years has been driven mostly by the uptick among disabled workers. Amid a tightening labor market, employers have needed to become more accommodating of disabled workers and have also had to raise wages, which increases the incentive to return to the labor force.

Consider West Virginia, which has historically had the highest disability claim rate and lowest labor force participation in the country. Over the past four years, its disability rolls have shrunk by 8%. Its civilian labor-force participation rate has ticked up to 54.4% from 53% in the past two years despite a rapidly aging population, and its job growth over the last year ranked third in the nation after Nevada and Utah.

Some credit also goes to former Senator Tom Coburn:

Following former Oklahoma Senator Tom Coburn’s dogged investigation and the SSA Inspector General’s documentation of fraud, administrative law judges have also become more scrupulous in reviewing applications. Judges are demanding more medical evidence, examining witnesses and considering whether applicants are capable of performing other jobs.

Unfortunately, it's not often that you read a story about welfare rolls dropping. But this is good news indeed and should remind us that it's important to actually tackle problems rather than just grandstand on them.

 

 



Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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