Honey, I Shrunk the Labor Force. Again

Today the labor the labor force participation rate plunged from an already abysmal 63.5% to 63.3% - the lowest since 1979.



The number of people not in the labor force increased in March by a massive 663,000 to a record 90 million Americans who are no longer working.




Some of these people are retiring. Some are simply giving up looking for work. Some are collecting "disability".  What all of them are not doing is producing. Worse, most of them are being paid for not working (via social security, unemployment, disability, food stamps, rent subsides, etc. etc.) by the shrinking number of people who are working.

This is not a growth scenario.

Disabled Thinking

The number of people claiming to be disabled has increased astronomically in the US.

                     Number on Disability      % Population

1960                       455,000                    0.65%
2011                    8,600,000                    5.60%

The UK had a similar problem. But it asked people on their disability dole to submit to a medical test to confirm they were too disabled to work. A third of recipients didn't even bother to show up and dropped out of the program. Of those tested, more than half (55%) were found fit for work.

Elementary economics tells you that when you tax something you will get less of it. When you subsidize it you will get more of it. In this country we tax people who work. We tax them a lot if they work successfully. We pay people quite handsomely not to work. Should we be surprised that we have increasing number of people not working?
How many more people are we prepared to have not working? How much more money are we willing to borrow so that they don't have to?

Sad? Collect Disability.

Below is a simple table that shows what has happened to the number of people claiming Social Security disability payments over the last 50 years.

                     Number on Disability      % Population

1960                       455,000                    0.65%
2011                    8,600,000                    5.60%

There are two possibilities here:

A. The workplace has gotten incredibly more dangerous
B. The number of people being granted bogus disability claims has increased

You make the call.

Hint: Did you know that you can qualify for disability by claiming a "mood disorder" (otherwise known as "being sad")?

The Disabled Economy

More workers joined the federal government's disability program in June than got new jobs. The workplace must be getting more dangerous?
According to the BLS, there were 80,000 new jobs created in June. But that same month, 85,000 workers left the workforce entirely to enroll in the Social Security Disability Insurance program, according to the Social Security Administration. While the economy has created 2.6 million jobs since June 2009, fully 3.1 million workers signed up for disability benefits. And the "disability" ranks should continue to swell. In just the last month, almost 275,000 put in applications for disability benefits, and changes to eligibility rules enacted back in 1984 have made it far easier to qualify.



Tired of working? Tired of trying to find work? Just go on "disability" and let someone else pay for your expenses.

Enabling Disability

Congress needs to get back to Econ 101 and reality. When you tax something, you will get less of it. When you subsidize it, you will get more of it. In 1984 Congress made it much easier to claim disability under Social Security. Having headaches, feeling depressed? You might be "disabled" and eligible to live off the working. Does anyone really think the workplace has gotten so much more dangerous that there are three times as many disabled now?

A Disabled Nation

As of January, the federal government was mailing out disability checks to more than 10.5 million individuals at a record cost of $200 billion a year. And the rate of increase is growing.

Change in the Ratio of People on Disability to the Labor Force in 1960

Given the advances in medical technology is it likely the the percentage of people who are actually unable to work is increasing that much faster than it was 50 years ago? Or is it more likely that an increasing  number of Americans find disability benefits more attractive than actually working?

Teach a man to fish, and he'll never starve. Teach a man that he'll get fresh fish every day without having to cast a net, and he'll gladly sit on the shore watching you fish.

Disability Pays

The number of people getting Social Security disability payments has increased dramatically over the last three years. Do you think this is because work has suddenly become more dangerous?



Or do you think it might be that not working is becoming increasingly lucrative?