Friday, April 26, 2013

Disabling Economics

By Ellen Cutter, Director of Research. 

A few days ago, I put on my tennis shoes, queued up a recent podcast of NPR’s This American Life, hit the track, and entered YMCA Zen. The episode, Trends With Benefits, was about disability benefits in the United States, which could be a snooze-fest to some. Not me. I spend at least 40 hours a week at Market Street analyzing local economies and discussing strategies to make communities more competitive. When workers drop out of a labor force, it can be a huge problem. 

Planet Money reporter, Chana Joffe-Walt spent six months unraveling disability benefits in the United States, focusing in on Hale County, Alabama where one-in-four working age adults receives federal disability benefits. Being an able bodied person, I felt grateful with each lap I completed. But, as the story continued, I also got dismayed… even angry. One-in-four adults: how can that be? 

In a nutshell: 

• Back pain, developmental disabilities, and other somewhat squishy ailments now account for huge proportions of people on disability. Back in the day, it was mostly people who had suffered a heart attack or stroke. 

• Physicians, state workforce retraining personnel, lawyers – they are all part of a system funneling folks toward applying for these benefits. The multitude of reasons include structural changes in local economies that hinder a person’s ability to find work, how “disability” is defined, compassion, and, of course, money. The federal government will cut checks directly to lawyers who successfully represent clients seeking disability benefits. Leading the pack is the cowboy hat wearing juggernaut of Binder and Binder. Think about it, you’ve seen the commercials. That firm had 30,000 clients last year, according to Planet Money. 

• Further complicating matters, states do not pay anything for residents who are on disability but they do for those who are on welfare. So many states (often assisted by private consulting firms) have worked to identify people on welfare who would likely qualify for disability, help them apply for the program, and transfer them off the state’s welfare program. 

• After a person goes on disability that there’s almost no chance that person will ever return to the workforce, even though many would be able to given the right therapies and job opportunities. One economist put the odds that a person goes back to work at one percent. And these folks are not counted in the unemployment rate. 

• 14 million people (or, about five percent of the nation’s total population) are now on disability, despite anti-discrimination laws and advances in health care, costing the federal government $260 billion a year. This is more than food stamps and welfare combined. 

In all the federal sequestration, unemployment rate, and job creation discussions, you cannot help but notice how this issue has failed to make it into the national dialog. Joffe-Walt provides an effective, albeit, maddening case study about local and national economics and how many people struggle to find meaningful work. Give it a listen. 

And, to see how your community is faring, check out last year’s New York Times interactive map of government benefits by county.