From a politician’s perspective, TDI
(discussed yesterday) has a drawback.
The recipients are still attached to the labor market even though they
are temporarily not counted. Social
Security Disability Insurance fixes that for politicians who are experiencing a
policy failure.
Data for
the month of June presented a very good example of how effectively Social
Security Disability Insurance can be used to paint over failed policies. However, it’s just one illustration of what
has been going on for a while. Interestingly,
John Merline of INVESTOR'S BUSINESS DAILY noticed it. In “Disability Ranks Outpace New Jobs in Obama Recovery,”
he points out how effectively the Obama administration has used it.
“More workers joined the federal
government's disability program in June than got new jobs, according to two new
government reports, a clear indicator of how bleak the nation's jobs picture is
after three full years of economic recovery….The economy created just 80,000
jobs in June, the Bureau of Labor Statistics reported Friday. 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.”
It goes on
to note that: “The disability ranks have outpaced job growth throughout
President Obama's economic recovery. While the economy has created 2.6 million
jobs since June 2009, fully 3.1 million workers signed up for disability
benefits….In other words, the number of new disability enrollees has climbed
19% faster than the number of new jobs created during the sluggish recovery.
(Even after accounting for people who left the disability program because they
died or aged into retirement, the disability ranks have climbed more than 1.1
million in the past three years.)”
It notes
that: “…the
‘labor force participation rate’ — the number of people who have jobs or [are] actively
looking for one compared with the entire working-age population — is now 63.8%,
down from 65.7% in June 2009. This participation rate is lower than it's been
in 30 years. In previous recoveries, the labor participation rate has almost
always risen, not fallen.” Once these
people are out of the labor force, they stop being counted as unemployed. Thus, the unemployment rate looks lower.
Given Obama’s complete lack of understanding of how
the economy works, this isn’t surprising. It’s a success from his
perspective. They’re not
unemployed. They’re disabled. Can’t blame Obama for that, can you? However, one sure can see a trail leading right
to his failed policies; but will voters follow the trail? Alas, each new recipient is a new defender of
his or her disability and his or her entitlement to benefits. So, the response to the policy failure builds
its own constituency. Neat trick. Yet, as
will be discussed tomorrow, it would be wrong to blame the recipient.
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