Unemployment Dropping as Jobless Turn to Disability Instead

By | March 24, 2011

The recent drops in first time unemployment claims should be great news, but it may not be. Certainly, economic news is turning south so why the positive news on unemployment figures?

The Wall Street Journal may just have the answer:

A huge wave of applicants joined the program over the past decade, boosting it from 6.6 million beneficiaries in 2000 to 10.2 million in 2010. New recipients have come from across the country, with an 85% increase in Texas over 10 years and a 69% increase in New Hampshire.[1]

It would appear that as unemployment benefits wear out or job seekers give up, they turn to Social Security Disability Insurance. State government’s may well be helping that happen as it takes the burden off of the unemployment insurance funds that they are responsible for and puts it on the Federal government, more specifically, Social Security.

Certainly the unemployed find it easier to deal with. They would no longer be required to hunt for a job in order to collect the check. If their disability is permanent, so is the check.

States have no incentive to ramp up enforcement, it’s not their money and it takes some pressure. The claimant has no reason not to do it, they get a check even though they’ve already exhausted unemployment benefits. The only people with incentive to fix it would be those paying the payroll  taxes to fund the SSDI: working people and business owners – and what can they do?

 


Sources:
[1] http://online.wsj.com/article/SB10001424052748703752404576178570674769318.html?mod=googlenews_wsj

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One thought on “Unemployment Dropping as Jobless Turn to Disability Instead

  1. Daniel

    This is a nice pick-up by the WSJ.

    We need to go back to the real way of figuring U/E.

    http://www.valueline.com/Markets/Commentaries/The_Real_Unemployment_Rate_-_January_13,_2011.aspx
    For example, the official rate counts only those not working who have seriously tried to find a job in the last four weeks. That rate, the aforementioned 9.4%, does not include those working temporary jobs, who are doing so only because they cannot find permanent employment. The official rate also precludes those working part-time jobs who would want full-time work, if it were available. Finally, this so-called official rate does not count those who are no longer looking for work as they sense that there are no opportunities out there for them. When those several categories are added to the official 9.4% rate,** the cumulative total is probably closer to 18%**–or just under one in five Americans who want full time, permanent employment, who are unable to secure such work, at present.
    If the GOP wasn’t spineless, they would get us the real numbers and let us inform the nation of the truth every single day until the 2012 elections. The Obama admin. surely doesn’t want this truth broadcast across the nation, as that shows the people the truth.

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