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Have Americans gotten way healthier over the past several years? Seems dubious. But the US economy sure has strengthened. And America’s hot job market seems to be finally draining a reservoir of hidden slack: disability rolls. The New York Times notes the number of Americans receiving Social Security disability benefits has declined to 8.63 million from a September 2014 peak of 8.96 million.
Now there might be other things going on as well, such as the big expansion of Medicaid and the Social Security Administration tightening the approval process for benefits. But as interesting as all these numbers are, more compelling is the story of Christian Borrero, told at the end of the Times piece. Born with cerebral palsy, Borrero until 2015 received disability benefits as he worked at a part-time job answering phones. The salary was low enough that he still qualified for benefits.
Then Borrero was offered a full-time receptionist job at a landscape supply and waste-to-energy company. And what happened next illustrates some big flaws with America’s disability system. Twice Borrero turned down the job, “terrified” he would lose his benefits. Plus he had never had a job with “real benefits and real hours.” Finally, however, Borrero accepted the job and then, subsequently, lost his disability benefits. So he took a second job to replace those lost benefits, although eventually his full-time employer gave him more responsibility and bumped up his pay to cover the shortfall.
So good news that a hot labor market pulled Borrero off government assistance. A nice quote here from Borrero: “I haven’t had an easy life. But I love the feeling of earning enough money to pay my bills and do what I want to do. I feel very blessed.”
This lovely vignette also highlights a truly messed up disability system that discourages work. If a disability recipient has earnings that exceed the monthly amount allowed, they lose the whole benefit. This is a holdover from an earlier era where a worker could either, say, operate a jackhammer or not. It was a binary thing. In America’s more service-oriented economy of today — you may have heard that Walgreens is replacing GE in the Dow Jones Industrial Average — disability should be seen as more of a continuum. As my AEI colleague Michael Strain has written. “SSDI should be modified to reflect this, covering individuals who truly cannot work, as a just society should, while encouraging others to do what work they can.”
Making that happen might require gradually phasing out benefits as income increases rather than a hard stop, or could involve providing a temporary limited benefit along with health care coverage and other help. The decline in dependence is a good story, but it can be made even better.