Since mid-2010, precisely at the time millions of US citizens used up all of their 99 week of unemployment insurance, disability claims have risen by 2.2 million. Those on disability are not counted in the workforce and are not considered unemployed.
Please consider Disabled Americans Shrink Size of U.S. Labor Force
The number of workers receiving Social Security Disability Insurance (SSDI) jumped 22 percent to 8.7 million in April from 7.1 million in December 2007, Social Security data show. That helps explain as much as one quarter of the decline in the U.S. labor-force participation rate during the period, according to economists at JPMorgan Chase & Co. and Morgan Stanley.
The participation rate -- the share of working-age people holding a job or seeking one -- was 63.8 percent in March after falling to a three-decade low of 63.7 percent in January. Disability recipients may account for as much as 0.5 percentage point of the more than 2 point drop since the end of 2007, the economists calculate, and that contribution could grow when some extended unemployment benefits expire at the end of this year.
“How we measure and understand what’s going on in the economy can be influenced by the degree to which various public- support programs are available and being used,” said Michael Feroli, chief U.S. economist at JPMorgan in New York. “With a rising number of disability beneficiaries, there are both lower unemployment rates and lower participation rates.”
More than 99 percent of all SSDI beneficiaries remain in the program until retirement age, David Greenlaw, a managing director in New York at Morgan Stanley, wrote in a March research note, citing government data. The program provides an average of $1,111 in monthly income to eligible workers with a physical or mental impairment that will last at least 12 months or result in death, according to Social Security.
Unemployment insurance requires that applicants search for job opportunities, while disability insurance requires they be unable to work.
Lax Screening Procedures
Less-stringent screening procedures, more attractive benefits and a waning need for less-skilled workers have bolstered SSDI rolls.
In addition, “difficult-to-verify disorders,” including muscle pain and mental illness, more easily qualify for SSDI under program reforms, [David] Autor [economist at Massachusetts Institute of Technology] wrote in a 2011 paper.
Based on current trends, 7 percent of the nonelderly adult population could be receiving disability benefits by 2018, Richard Burkhauser and Mary Daly wrote in the spring issue of the Journal of Policy Analysis and Management. That’s two years after the SSDI program will run through its trust fund, according to an April report by the Social Security trustees. Costs Increase
Costs have increased with the rolls: The program spent $132 billion last year, more than twice as much as in 2000.
Unemployment Rate with 10% FraudThose numbers are as of the February BLS jobs release and would undoubtedly be worse now given Friday's Payroll Disaster: Nonfarm Payroll +115,000 Establishment Survey But -169,000 Household Survey, Labor Force Drops by 342,000
- 10% of 27.5 million is 2,750,000.
- The civilian labor force would rise to 157,145,000 from 154,395,000
- The number of unemployed would rise to 15,508,000 from 12,758,000
- The resultant unemployment rate would be 15508/157145 = 9.9%
Is there anyone who thinks disability fraud is less than 10%? If not, then the unemployment rate would be at least 9.9% assuming those in fraudulent claims started looking for work.
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