Home > modeling, news, rant > Hey WSJ, don’t blame unemployed disabled people for the crap economy

Hey WSJ, don’t blame unemployed disabled people for the crap economy

April 9, 2013

This morning I’m being driven crazy by this article in yesterday’s Wall Street Journal entitled “Workers Stuck in Disability Stunt Economic Recovery.”

Even the title makes the underlying goal of the article crystal clear: the lazy disabled workers are to blame for the crap economy. Lest you are unconvinced that anyone could make such an unreasonable claim of causation, here’s a tasty excerpt from the article that spells it out:

Economic growth is driven by the number of workers in an economy and by their productivity. Put simply, fewer workers usually means less growth.

Since the recession, more people have gone on disability, on net, than new workers have joined the labor force. Mr. Feroli estimated the exodus to disability costs 0.6% of national output, equal to about $95 billion a year.

“The greater cost is their long-term dependency on transfers from the federal government,” Mr. Autor said, “placing strain on the soon-to-be exhausted Social Security Disability trust fund.”

The underlying model here, then, is that there’s a bunch of people who have the choice between going on disability or “joining the labor force” and they’ve  all chosen to go on disability. I wonder where their evidence is that people really have that choice, considering the unemployment numbers and participation rate numbers we see nowadays.

For example, the unemployment rate for youths is now 22.9%, and the participation rate for them has gone from 59.2% in December 2007, to 54.5% today. This is probably not because so many kids under the age of 25 are disabled, I suspect. If you look at the overall labor participation rate, it’s dropped from 66.0 in December 2007 to 63.3 in March 2013. Most of the people who have left the work force are also not disabled. They’ve been discouraged for some other mysterious reason. I’m gonna go ahead and guess it’s because they can’t find a job.

This leads me to ask the following question from the journalists LESLIE SCISM and JON HILSENRATH who wrote the article: Where is your evidence of causation??

Here’s another example from the article of a seriously fucked-up understanding of cause and effect:

With overall participation down, the labor force—a measure of people working and people looking for work—is barely growing.

They consistently paint the picture whereby people decide to stop working, and then yucky things happen, in this case the labor force stops growing. Damn those lazy people.

They even bring in a fancy word from physics to describe the problem, namely hysteresis. Now, they didn’t understand or correctly define the term, but it doesn’t really matter, because the point of using a fancy term from physics was not to add to the clarity of the argument but rather to impress.

The goal here is, in fact, that if enough economists use sophisticated language to describe the various effects, we will all be able to blame people with bad backs, making $13.6K per year, on why our economy sucks, rather than the rich assholes in finance who got us into this mess and are currently buying $2 million dollar personal offices instead of going to jail.

Just to be clear, that’s $1,130 a month, which I guess represents so enticing a lifestyle that the people currently enjoying it ‘are “pretty unlikely to want to forfeit economic security for a precarious job market”‘ according to M.I.T. economist David Autor. I’d love to have David Autor spell out, for us, exactly what’s economically secure about that kind of monthly check.

The rest of the article is in large part a description of how people get onto SSDI, insinuating that the people currently on it are not really all that disabled or worthy of living high on the hog, and are in any case never ever leaving.

How’s this for a slightly different take on the situation: there are of course some people who are faking something, that’s always the case. But in general, the people on SSDI need to be there, and before the recession might have had the kind of employers who kept them on even though they often called in sick, out of loyalty and kindness, because they didn’t want to fire them. But when the recession struck those employers had to cut them off, or they went out of business completely. Now those people can’t find work and don’t have many options. In other words, the recession caused the SSDI program to grow. That doesn’t mean it caused a bunch of people to get sick, but it does mean that sick people are more dependent on SSDI because there are fewer options.

By the way, read the comments of this article, there are some really good ones (“What were people with injuries and no high-value job skills to do? Is the number of people in the social security disability program the problem or the symptom?”) as well as some really outrageous ones (‘The current situation makes the picture of the “Welfare Queen” of the 1980s look like an honest citizen’).

Categories: modeling, news, rant
  1. April 9, 2013 at 7:54 am

    http://apps.npr.org/unfit-for-work/ I’d heard this report driving one morning. Disability has become a vehicle for relabeling welfare candidates so that politicians can claim reduction in welfare recipients, as ‘welfare’ received such a negative perception under the Reagan administration.

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      • April 9, 2013 at 12:18 pm

        A lot of the “disability checks/unemployment checks don’t impact incentives to work” is based on modeling that you would find suspect, to say the least, if you looked at it in detail.

        In addition, there exists a consulting firm performs one task. It helps state governments devise rules and bureaucratic nomenclature behavior so that people are taken off the state welfare rolls and placed on SSDI.

        Habit

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        • April 9, 2013 at 12:23 pm

          “bureaucratic nomenclature behavior” = bureaucratic “best practices” and nomenclature.

          And then I was going to write something about habit models and stuff, but I didn’t have time.

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  2. bnthdntht
    April 9, 2013 at 9:19 am

    good one mathbabe—keep em honest thx

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  3. lace
    April 9, 2013 at 9:42 am

    the authors of that skewed article should be on unemployment. Immediately.

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  4. pjm
    April 9, 2013 at 10:02 am

    Very good take-down, as usual, by Dean Baker at Beat The Press.
    http://www.cepr.net/index.php/blogs/beat-the-press/wsj-finds-the-real-cause-of-weak-recovery-disabled-workers
    It seems to be a variation on the the theme Krugman describes as the “soup lines caused the Great Depression” mentality. (Reminds me that someone once published a economic journal article that modeled unemployment on the basis of worker’s increased preference for leisure time.)

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  5. April 9, 2013 at 11:22 am

    Very good for calling Wall Street Journal on this. I’m probably going to get in trouble one day with my opinions with some of this but it is not the fault of the people as models and math shaped a lot of this. I’m not saying what we have is not good but as your prior article indicated with models, don’t lie with them. I think economists should collaborate more with quants for their knowledge too as the software or analytics they use was probably written by either a quant or programmer (or both) and they are using tools created by people smarter than them, in my opinion:) It’s amazing that it’s always the “dumb” consumer in so many of these articles when they go witch hunting, sad that’s what gets out there.

    Back in 2009 I put myself in a little hot water when I said Sebelius would be in hot water as being no match for the business intelligence used by insurance companies as they would eat her up with their knowledge. It was not personal at all just a post stating that she would be outwitted without a tiny bit of data or Health IT knowledge. Today in Politico, they posted an article that pretty much says she’s confused on why the Accountable Care Act is not working as they designed. Enough said from me today so I’ll shut up:) She’s not alone as figure heads without a tiny bit of knowledge on how all this works go over the cliff with expectations that are just not real, get duped.

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  6. mathematrucker
    April 9, 2013 at 3:51 pm

    Sure enough WSJ, that scraggly-looking disabled trucker in the accompanying photo definitely has a great shot at landing the lead role in the next Grizzly Adams remake.

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  7. jgalt47
    April 9, 2013 at 4:24 pm

    The WSJ over-emphasized the effects of the disabled on the current economy. Having said that, if you don’t believe that the disabled depress demand then you must not believe that stimulus would increase demand. Otherwise, the difference between what the disabled receive and what they could potentially earn if healthy is a forgone stimulus.

    The thing that bothers me about most of these articles is the lack of discrimination among the sub-groups of the disabled:

    Some people can only do very basic jobs. About 20 years ago, I was in the lobby of a plant in South Carolina waiting to make a sales call. A young couple came in. He was applying for a job. I wondered why she came along. Then I realized that she was filling in the form because he couldn’t read. If this person ever loses his voice so he can’t say “Do you want fries with that?” he’s permanently disabled.

    The truck driver featured in the article presents a story that we think typical when we think of SSDI. He’ll never drive a truck again. He could be sent to school and taught to type. However, who would hire him? In his fifties with no experience in an office, I wouldn’t hire him even as a file clerk. This might fall under ADA guidelines, but it’s easy to justify not hiring someone up front. [The other person was more qualified because …]

    Another problem occurs just because of the length of time to process a disability claim. The article mentions a year to investigate and approve a claim of back injury. You would think that many of these people could get physical therapy and move back into the labor force. But other things happen. Let me relate a story of a guy I knew who was laid off after the dot-com bubble. He had recently gotten into flipping houses, so he went after that full-time while looking for a job. He’s in my age-range (“Will you still love me when I’m 64?”) so he was just looking for a job to coast into retirement. Instead of getting up at 7AM he moved it to 8AM (I’m the boss so I make my own hours). Same thing at the end of the day – the whistle blew at 4PM. If he need to stop at Home Depot for supplies, he’d talk to the clerks or other builders. After a year of that he didn’t want to go back to the 8-to-5 grind. And he didn’t have any physical excuses. If the difference between your take-home pay for a job and SSDI is $100 or $200 a month, what’s the incentive?

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  8. mathematrucker
    April 9, 2013 at 5:03 pm

    They clearly chose the Grizzly Adams lookalike for the photo to suggest that disabled persons are a bunch of unemployable lazy hippies responsible for dragging down the economy just like they did fifty years ago. So much the better that he also happens to be a truck driver, yet another stereotypically lazy class of people. (I’m used to this stuff, but that doesn’t make it any less offensive.)

    It seems to me that automation is at least worth a quick mention in any modern article on declining employment figures, unless accurately describing reality isn’t the main objective.

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  9. Just Somebody
    April 9, 2013 at 10:22 pm

    The wonkblog at Washington Post has a piece that suggests that the rise in disability is a function of the work force getting older.

    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/01/the-simple-boring-reason-why-disability-insurance-has-exploded/

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  10. April 10, 2013 at 6:04 am

    Mathbabe, the real cause-and-effect here is the purchase of the WSJ by Rupert Murdoch and its transformation from a very solid, albeit editorially biased, newspaper into a full-on, 24/7 Randian propaganda machine for the 0.001%. I gave up my subscription years ago just for the reasons you gave in your excellent take-down of their bullshit article. This isn’t journalism, this is hatemongering to “confirm” the moral superiority of the rich.

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    • April 10, 2013 at 6:35 am

      Well said!

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      • April 10, 2013 at 7:03 am

        Thanks! BTW, I noticed you’re an LHS grad too; I graduated in 1981. I also did my doctoral work at you-know-where in chemistry. I got my AM in ’87 and left the program ABD in ’89 to move to Silicon Valley and start working as a patent agent; I got my law degree in ’93. Cheers!

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  11. April 11, 2013 at 7:49 pm

    I am on disability. I might prefer to work from my wheelchair, but found that employers wouldn’t even consider me, even when I was much less disabled. There are jobs in my profession, nursing, that can be done from a wheelchair, like discharge planning, which require brains, not brawn. However I found that if you can’t get pulled to work the floor, they don’t want you. Meanwhile, my brain still works. Yes, I chose my $18,000 a year over the median pay of $68,000 for a registered nurse. Wankers.

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  12. April 11, 2013 at 9:09 pm

    Only about 10% of those who have ‘left the workforce’ have gone on disability. A large number, to be sure, but by no means a driver of the economy.

    Also, how would that mechanic even work? Workers stop working, just so they can starve and not have job offers? What?

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  13. Gnome Alice
    April 15, 2013 at 3:45 pm

    Oh how I agree. WARMONGERING AND UNSUSTAINABLE FUELS ARE THE REAL PROBLEM WITH THE “ECONOMY” as well as rampant consumerism which is needed to hold the whole tower of cards together. The FED and patriarchy are responsible for the bad economy. Economists and their very bad math and false dichotomy of constant “growth” as if normally constant growth is not otherwise called cancer.

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  14. mike
    April 20, 2013 at 7:56 pm

    I live in Ohio I was injured at work and was approved for BWC claim. I received treatment witch involved surgery after which my recovery was slow I have now reached maximum medical improvement with limitations that make me unable to return to my former place of employment. with disability ended I am no longer able to receive disability payment (as it should be). sow I apply for unemployment. I come to fined out that in Ohio unemployment has dead line of 12 months after your last “wage” I was temperamentally disabled for 15 months, although I was still employed during that time I was not able to work and earn a “wage” (disability check through BWC don’t count) therefor as-per Ohio Job and family services I am voluntarily unemployed and failed to apply before the cut off but I also was not allowed to apply before a medical release. the friendly state of Ohio looking out for it citizens

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