..... WHAT CAUSED THE DECLINE, despite the tight labor market? Some analysts, impressed by the degree to which government programs can cause disincentives to work, point out that the drop coincided with the mid-1960s advent of the Great Society programs. ..... < skip > ..... WHEN IT COMES TO the millions of people receiving Social Security disability income, however, it is fairly certain that virtually all of them are outside of the labor force. The SSDI program "creates a very strong incentive against meaningfully participating in the formal labor market," says Massachusetts Institute of Technology economics professor David Autor, author of the November 2011 study, "The Unsustainable Rise of the Disability Rolls in the United States." ..... < skip > Disability Explosion (The share of men and women receiving SSDI payments has soared over the past few decades - JPEG image ..... The surge in the number of recipients hasn't been driven by the aging of the population, argues Stanford University economics professor Mark Duggan, because the percentage receiving benefits has risen sharply within each age group. According to the chart above, the share of SSDI going to men ages 25 to 54 has risen from 1.4% in 1970 to 3.3% in 2013. This has occurred even though all other key factors indicate that the portion of workers on SSDI should have decreased, rather than increased. A smaller percentage of people are doing dangerous work, and the work that is dangerous is getting safer. In addition, the general population has gotten healthier. While those who used to file for disability typically had ailments such as cancer and heart trouble, today's filers more typically complain of mental disorders and back pain. The Social Security Website (ssa.gov) offers a "Disability Starter Kit" in both English and Spanish that walks you through the process of applying for SSDI, step-by-step. "There is a very powerful kind of for-profit advocacy component to getting people onto SSDI," says Autor. Law firms that represent claimants are given a percentage of the take, much like personal-injury lawyers. That might seem reasonable, but the sums involved are large enough to create a special-interest group that has a stake in perpetuating the system. As Autor puts it, "The Social Security Administration each year pays more than $1 billion directly to attorneys that prevail against it on behalf of claimants." ..... < skip > ..... But one new factor that is just around the corner is the depressing effect on labor-force participation of the Affordable Care Act. ... The disincentives work like this: By working more, people could lose subsidies bestowed by the ACA, amounting to an implicit tax on earnings, which could induce them to work less. ..... < skip > ..... But a firm with 49 full-time employees will face a $40,000 penalty if it fails to provide medical insurance after adding a 50th employee. The huge marginal cost of that 50th worker will deter expansion. ..... < skip > ..... The share of the adult population, 16 and over, participating in the labor force is at its lowest level since 1978, at 62.8% and 62.9% in June and July, respectively. In a comprehensive study of trends in the workforce released in December, the Bureau of Labor Statistics said it expects a further decline in labor-force participation, to 61.6%, by 2022. ..... < skip>
David Autor is spot on. He’s been studying this for a long time. I believe you’ll find that US tax policy punishes the ‘working poor’ and creates a massive welfare cliff.
I know a guy on disability because he had to get a pin in his wrist. You wouldn’t notice any reduction in flexibility while he plays poker. He’s been on it for over 15 years. He makes side money in cash. A GOP POTUS and Congress could end this fast by paying a bounty as a percentage of benefits to the fraudulent recipient and doctors.
Democratcare itself puts a $5/hour burden on labor. Toss in state, county and local taxation, licensing, permitting and zoning laws and you make labor a suckers game.