The monthly drama surrounding the nation’s unemployment rate will play out again next Friday when the Bureau of Labor Statistics (BLS) releases its April report. It’s become an industry upon itself with different organizations and media sources making predictions prior to the release and then subsequently debating its merits afterward. The methodology employed by the BLS makes any result unreliable as a true measure of the nations employment situation, yet the results drive policy and have a significant effect on the political climate in America.
The biggest problems are in what defines an employed person and how people are counted in the survey taken each month to derive the nations official measure of the unemployment rate.
The BLS considers one employed if you work as little as one paid hour per month. If you work at least 15 hours unpaid, such as in a family business, you are also counted as employed.
Interpreting the unemployment rate is really a crapshoot. The flimsy requirement to be counted as employed as well as other factors such as marginally attached workers and those considered not in the labor force at all make the rate a truly poor measure of the state of the economy.
However, this post isn’t intended to delve into the BLS methodology and all of its misgivings. Rather, it is to touch on the latest skewing of the nations unemployment rate via the meteoric rise in the number of Americans collecting disability payments. Disability has become the unofficial extension of federal unemployment benefits. After state and federal benefits and extensions are all exhausted, many are moving to disability as the next source of the social safety net.
The BLS recently released a new study concerning disabled Americans – http://www.bls.gov/news.release/dissup.nr0.htm.
In it we find that over 28 million Americans are considered disabled. Keep in mind these numbers are already nearly a year old as of May, 2012.
Just over 18% of the disabled were employed (recall the flimsy BLS definition of employed). That compares to around 64% of the overall working age population of Americans employed.
Here’s where it starts to get a little sticky. Nearly 60% of the disabled received some form of financial assistance in the last year from one or more of the following sources: Workers Compensation, Social Security Disability Income, Supplemental Security Income, Veterans Disability compensation, disability insurance payments, Medicaid, Medicare, and other payments or programs.
Yet over 92.5% of those surveyed stated that the financial assistance failed to impede their search for work. Really? Realistically, the only way for that to be true is that the rocketing numbers of those on the disability rolls are truly disabled and not simply collecting benefits as a source of income when all others have been exhausted. Can this possibly be true despite the tremendous advances in medical technology allowing the disabled to work and function nearly normal? We must be experiencing an unprecedented spike in Americans becoming disabled despite more reasons than ever before to not let it affect their lives.
National Public Radio (NPR) completed a study showing 14 million Americans are receiving disability benefits from the government – http://apps.npr.org/unfit-for-work/.
Reporter Chana Joffe-Walt made this statement during an interview with NPR’s This American Life on March 22, 2013.
since the economy began its slow, slow recovery in late 2009, we’ve been averaging about 150,000 jobs created per month. In that same period every month, almost 250,000 people have been applying for disability.
Can it be pure coincidence that the rise in disability mirrors the high unemployment numbers?
Chana Joffe-Walt calls it the disability-industrial complex. This has the left in a tizzy. They have trotted out a long line of debunkers and consider anyone even quoting the NPR study a right-wing extremist since the results don’t fit the official narrative of the left. You can draw your own conclusions as to the merits of the study. What is undeniable however is the rise in those considered disabled since Obama took office.
If you take any of these studies with a grain of salt perhaps because you consider them partisan or slanted in some manner, numbers from the Social Security Administration itself confirm that nearly one thousand new people each day are enrolling for disability benefits since Obama took office – http://cnsnews.com/news/article/8803335-another-new-record-disability-975-day-under-obama. The SSA is hardly a right-wing extremist source.
Also from the NPR study.
The federal government spends more money each year on cash payments for disabled former workers than it spends on food stamps and welfare combined.
Many people have heard that over 47 million Americans from 23 million households are now on food stamps or SNAP – http://cnsnews.com/blog/joe-schoffstall/record-number-households-food-stamps-1-out-every-5. They probably didn’t know that the cost of disability benefits was exceeding food stamps and welfare combined.
In fact, the fight against poverty is costing America a trillion dollars each year according to the CATO Institute – http://www.cato.org/sites/cato.org/files/pubs/pdf/PA694.pdf.
What can you takeaway from this barrage of numbers through various studies that show conflicting results? The economy stinks for the average American. The crony-capitalists and corporatists may be profiting per usual no matter who is in office, but there’s a reason this doesn’t feel like a recovery. Because it isn’t for most of us despite a booming Dow stock market average and the Wall Street financial markets that benefitted the most from the American taxpayer bailing them out.
So when the unemployment rate is released next week and the debate rages on, just remember to take it all in context with the big picture. Not all of us are suffering as the well-connected keep on living the American dream.