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Home Publications Blogs Beat the Press Washington Post Beats Up on Disabled Workers, Again

Washington Post Beats Up on Disabled Workers, Again

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Saturday, 21 September 2013 21:33

The Washington Post might not be very aggressive when it comes to billionaire too big to fail bankers, hedge and private equity fund swindlers, or pharmaceutical companies exploiting patent monopolies by pushing bad drugs, but when it comes to beating up on people getting $1,150 a month for disability, there is no one tougher. The Post is on the job again today with an editorial warning about the "explosive recent growth" in disability roles. 

The Post conveniently ignores facts and reality in pushing its case. For example, it counters the views of "defenders of the program" with the views of "critics, including a significant number of academic economists." Of course there are a large number of academic economists who are among the defenders of the program, but the Post did not think this point was worth mentioning; it could distract readers.

This sentence continues:

"suggest that the program’s manipulable and inconsistently applied eligibility criteria have enabled millions of people who could work to sign up for benefits instead."

"Millions of people," really? The work linked to in the paper won't give you this number. One careful study that was produced by the University of Michigan a few years ago, identified categories of applicants that it deemed marginally eligible. It found that if this group was denied disability, 28 percent would be working two years later. Since this group accounted for 23 percent of applicants, that would mean 6.4 percent of applicants (28 percent of 23 percent) would be working in two years, if they were denied benefits.

There are currently just under 10 million disability beneficiaries. If we assume that 6.4 percent of these people would be working if they had been denied benefits that comes to 640,000 people. That is considerably short of "millions of people" in places other than the Washington Post opinion pages. Furthermore, the Michigan study found that the share of these marginal refusals who were working four years later fell to 16 percent, so the 640,000 figure is undoubtedly too high based on this analysis.

Of course the other point to keep in mind for those looking to crack down on these freeloaders is that our system will never be perfect. The inappropriate beneficiaries will not identify themselves. Any effort to tighten criteria to ensure that ineligible people don't qualify will inevitably lead to more eligible people wrongly being denied benefits. In other words, the Post's policy could mean that some people with terminal cancer don't get benefits. 

 

The piece then cites a study by economists at the San Francisco Federal Reserve Board:

"They found that technical and demographic factors such as those cited by defenders of SSDI explained no more than 56 percent of the program’s growth, suggesting that a substantial portion — at least 44 percent — is because of the kind of structural defects and perverse incentives that critics have cited."

First, this misrepresents the study's findings. It did not say that at least 44 percent of the growth in disability roles is "because of structural defects and perverse incentives." It said that only 56 percent could be explained by technical and demographic factors. It is widely recognized outside of the pages of the Washington Post that it is more difficult for a person suffering from a disability to get a job in a weak economy than in a strong one. That does not mean that if these people apply for and receive disability benefits that it is due to the "structural defects and perverse incentives" of the program. The Post is simply ascribing its view to economists who certainly did not espouse these views themselves in the piece cited.

The cited paper also missed an important factor behind the increase in disability rates that the Congressional Budget Office noted in a 2010 study. CBO noted that the mortality rate for people with disabilities had fallen sharply since 1980. This means that if a person has a disability that keeps them from working they are likely to live much longer and therefore collect disability for a longer period of time.

The CBO study put the drop in the mortality rate between 1980 and 2008 at around 2 percentage points. With the lower mortality rate there is a 74 percent probability that a person on disability would survive ten years, with 1980 mortality rate the probability would have been less than 60 percent. This drop in the mortality rate would be an important factor explaining the rise in the number of people on disability which for some reason the Fed study neglected.

But there is no doubt that the bad economy is a major contributor to the rise in disability roles. In the reality based community this would be yet another reason for aggressively pursuing policies such as stimulus or a lower valued dollar that could bring us back to full employment. After all, in addition to the millions of lives being ruined by sustained periods of high unemployment we are also needlessly losing a trillion a year in output.

But the Post can't be bothered talking about policies that would get us back to full employment, they're worried that someone is running around with an $1,150 a month disability check to which they're  not entitled; only in the Washington Post.

 

Note: Typos, including in headline, fixed.

Comments (6)Add Comment
...
written by ComradeAnon, September 22, 2013 9:22
Interesting typo in the title.
How to Give to Disabled Millionaires and Billionaires
written by Last Mover, September 22, 2013 9:33

Brother, sister, won't you spare a dime to the disabled millionaires and billionaires of America in these hard times?

There's many ways to give:

Pay twice as much for health care as other nations or just don't have it all. Same for internet, cell phone and tv service. The disabled who provide these services need the extra economic rent just to keep up with others while providing half the quality at twice the price. And don't forget the added bonus they require from subsidies of negative externalities in areas like climate change, without which they could never survive.

Pay more in taxes because of voodoo tax cuts that don't raise more revenue, pay regressive tax rates in general and take the blame for driving debt through the roof with unearned entitlements and liar loans that caused asset bubbles to bust, all laid at the feet of government redistribution programs. For this America, you can be proud and wear the same badge of rugged individualism worn by struggling disabled millionaires and billionaires.

Last but not least is jobs. Disabled millionaires and billionaires who cannot earn income and accumulate wealth otherwise must not be crowded out by hordes of deadbeat welfare bums flaunting fake crutches and wheelchairs to get themselves on disability.

This would be unfair competition based on privatized gains at the expense of socialized losses, the only kind of economic competition millionaires and billionaires understand. And to really level the playing field America, it is even more unfair to compete with them in the middle of a great recession when jobs are not available anyway.

In this game there is only enough room for the "competitively challenged" disabled few at the top to survive and create jobs for others below them. There is nothing more honorable than to give up one's job and stay off disability for this noble goal.

Wake up America. Don't crowd out the disabled millionaires and billionaires who employ you. As first movers, they have exclusive rights to these jobs and will not be giving them up anytime soon to the likes of real free market competition.
...
written by watermelonpunch, September 22, 2013 10:33
Yes, I'm quite tired about hearing about "perverse incentives", where the speaker somehow seems to be suggesting that the answer is to have people languishing on the streets, instead of some kind of help that would enable them to live in poverty at the same standard of penury as a horrendously shitty job might afford them.

Seems the answer is quite clear.
More jobs.
Better paying jobs.

Problem solved.


Unless of course your aim is to have people languishing on the streets. If you want sick poor people to suffer and die unnecessarily because you think that's the way it should be, I guess there really is no logical argument you can make without seeming like a monster, so you have to come up with illogical arguments.
Though that attitude of severe animosity toward unfortunate people seems to be gaining social acceptance. So perhaps it won't be long before the Washington Post simply starts advocating openly for Soylent Green style government forced suicide centers for the elderly & disabled as a way to "fix the debt".
640,000 is undoubtedly too high
written by DisabilityFacts, September 23, 2013 12:11
Do "millions of people who could work" qualify for Social Security disability? The Washington Post is asking the wrong question. Many "people who could work" legitimately qualify for Social Security disability benefits, so long as they could not do SUBSTANTIAL, GAINFUL work on a sustained basis. Minimal earnings or off-and-on work do not disqualify you. Only the ability to do substantial gainful activity (SGA) disqualifies. SGA is carefully defined in Social Security's regulations based on monthly earnings and a few other factors found in the Code of Federal Regulations, title 20 sections 404.1571-76. Employee earnings in 2013 of $1,040 per month or more, on a regular basis, are the starting point to define SGA. That is significantly less than minimum wage for full-time work.

So people are legitimately disabled even if they "could work," so long as the work would pay less than SGA.

The study from the University of Michigan (RAND and Social Security Administration) mentioned above, that found that 28% of "marginally eligible" applicants who were denied disability were working two years later, also reported that the 28% decreases to 19% if you only count those who were working at the SGA level
two years later. The 28% figure comes from people who earn as little as $1,000 per year. Check out the report at page 4. Since it is the SGA level, not just any work, that is the legitimate disability test, the 19% figure should be used instead of the 28% figure to give the rough estimate. The 640,000 estimate becomes about 440,000.

Even the 440,000 is an over-estimate. Some unknown number of people were counted in the 19% whose earnings looked like they were at the SGA level ($1,040 per month in 2013), but whose earnings actually did not achieve the SGA level because Social Security's rules sensibly allow for several kinds of exemptions from the monthly-income limit. People who have impairment-related work expenses (IRWE), such as specially-equipped vans or medical equipment, can deduct those expenses from earnings before applying the SGA test. People who earn SGA amounts for only a few months because of their impairments can have SGA-level months disregarded as unsuccessful work attempts (UWAs). People who work in sheltered, subsidized employment can have the subsidy subtracted from earnings. This includes those people in the 19% in the study whose earnings looked like SGA, but were really from agencies, family members, or friends who created subsidized "made work" for a person who was just denied disability by Social Security. It would have taken much more detailed, case-by-case analysis of the data in the RAND/SSA study to determine how many of the marginally (in)eligible applicants who were denied disability, and who were working at the SGA level two years later, actually were performing work that would still qualify as SGA after all exceptions and deductions were accounted for. In other words, the RAND/SSA study cannot tell us how many less than the 440,000 (19%) were doing work that is actually inconsistent with disability. That would be the relevant policy question.

It should also be noted that the medical conditions of some denied applicants will have improved by two years after the denial, so they would have returned to work regardless of whether they were granted disability. Social Security disability does not have to be PERMANENT disability, just one year or more. Someone who recovers from a bad car accident in 18 months qualifies for disability during the 18 months. An additional reduction of the 440,000 may be necessary.

Beyond the details, the RAND/SSA study shows that the denied applicants as well as the granted applicants have suffered huge losses of earnings capacity. Surely the Washington Post would not advocate that Social Security disability benefits should go only to those individuals who cannot work at all. That has never been the test, and that would not be an effective disability safety net.
paid because you are too old
written by Jeremy, September 24, 2013 9:01
What Mr. Baker ignores is that a significant percentage of favorable disability determinations/decisions are based on age, not inability to work. Whether or not a particular individual can find a job is supposed to be irrelevant, but that is only true if you are under fifty. If you are fifty and capable of doing only sedentary work, you are presumptively disabled unless you have done a sedentary job in the past fifteen years that meets certain criteria and which you can still perform or have transferable skills to a sedentary job you can still perform. At 55, the presumption is for people capable of doing light (or sedentary) work. As a result, large numbers of applicants who are capable of performing sedentary or light jobs are granted disability benefits simply for being "old" and "unemployed", not because they are truly disabled in any meaningful sense of the word.
Exactly.
written by Herringbone, September 24, 2013 10:31
Because, don't you know, if you put an infinite number of disabled, untrained, and undereducated senior citizens in a room doing sedentary work—typing random keys on laptops, say—you'll eventually produce an updated edition of Atlas Shrugged. There are a bunch of startups seeking capital right now to do just that, and venture capitalists are showing a great deal of interest. Soon those millions of malingerers will have no excuse.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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