NCPA - National Center for Policy Analysis

Disability Ranks Outpace New Jobs in Obama Recovery

July 13, 2012

More workers joined the federal government's disability program in June than got new jobs, according to two new government reports, a clear indicator as to how bleak the nation's jobs picture is after three full years of economic recovery. Studies have shown that people are more likely to apply for the program when jobs are scarce, and continued escalating enrollment suggests this is still the case, says Investor's Business Daily.

  • The economy created just 80,000 jobs in June, according to the Bureau of Labor Statistics (BLS).
  • 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.
  • Further, the disability ranks will likely continue to swell: in just the last month, almost 275,000 people put in applications for disability benefits.
  • This growth in disability enrollment is part of a long-term trend: since June 2009, the economy has created 2.6 million jobs while fully 3.1 million workers signed up for disability benefits.
  • In other words, the number of new disability enrollees has climbed 19 percent faster than the number of jobs created during the sluggish recovery.

This reliance upon the disability program speaks to the fragility of the economic recovery in which many still cannot find jobs and unemployment remains stubbornly high. Perhaps the most significant aggregate result of this economic environment is the decrease in workforce participation.

  • The number of people who have dropped out of the labor force entirely has exploded by 7.3 million since June 2009, according to BLS data.
  • As a result, 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 percent, down from 65.7 percent in June 2009.
  • This participation rate is at the lowest levels in 30 years.

The loss of participation is likely due to the fact that there are so few jobs to be had.

  • The unemployment rate has been above 8 percent for 41 consecutive months, while in the previous 60 years, the jobless topped 8 percent in a total of only 39 months.
  • The number of people with jobs is still nearly 5 million below its prerecession peak.

Source: John Merline, "Disability Ranks Outpace New Jobs in Obama Recovery," Investor's Business Daily, July 6, 2012.

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