This story by NPR Planet Money's Chana Joffe-Walt shocked me and totally changed the way I used to think about our economy. What I didn't know, what most people probably didn't know, is that the number of Americans who are collecting social security disability has increased tremendously since 1980. Every month, 14 million people now get a disability check from the government for around $1,000.
Joffe-Walt spent 6 months exploring the disability program. As she reports, the story of the U.S. economy we normally hear is not the full picture, not by a long shot. Our federal disability program is only slightly caused by an aging workforce; it is primarily an increasingly expensive, relatively hidden safety net.
The federal disability program, along with the associated health care benefits, costs about $260 billion a year. That's not only eight times more than we spend on welfare, it's more than we spend on welfare, food stamps, the school lunch program, and subsidized housing combined! And the worst part is that the disability program incentivizes people to stay on the program forever and never get off of it. You know, the opposite of what a welfare program should do.
And another kicker: the landmark welfare reform passed in the 90s encourages states to move healthy people from welfare, in which states have to pay a major share, to disability, which is totally paid by the federal government.
The story is excellent but I was a little disappointed that there wasn't much attention paid to what these people would be doing if they weren't getting paid by the disability program. Simple economics says they would follow demand and move to where the jobs are. But I wonder - most of these people (self-admittedly) are not skilled for the types of jobs needed by our modern economy. So is the disability program really preventing people from bettering themselves, or is it the final and lowest safety net for people left behind by the modern economy? I wish they'd discussed that more, but regardless I highly recommend listening to it or reading it (see below).