Disability Rolls Tumble As Economy Gains Steam | Stock News & Stock Market Analysis

Jobs: If you want a sign of a growing economy, look at the disability rolls. They’ve been shrinking rapidly of late, as fewer apply for benefits and more disabled return to work. This is very good news.

X In the aftermath of the last recession, the number of workers who went on the Social Security Disability Insurance program skyrocketed by more than 1 million.

It’s clear from the data that this was being driven largely by the lack of good job prospects. Monthly applications for SSDI leapt from an average 182,000 a month in 2007 to 245,000 a month in 2010. Even years after the recession had ended, applications remained well above 200,000 a month as the painfully slow recovery dragged on.

With jobs scarce and enrollment requirements for SSDI fairly lax, it’s not surprising that many took this route.

While these trends started to slowly turn around in 2015, they accelerated in 2017.

In fact, the number of SSDI applications in 2017 was down 6% from the year before — the biggest one-year decline since 1997, government data show. At the same time, the number of people leaving the program was higher in 2017 than it’s been in more than a decade.

As a result, the number of workers collecting federal disability benefits dropped 1.3% last year, which is the biggest annual decline since 1983.

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Some of the enrollment decline is due to the fact that baby boomers who had been on SSDI are aging into retirement, and are shifted over to the regular Social Security program. But the sharp drop in applications is a clear sign of a healthier labor market.

What’s more, data from the Bureau of Labor Statistics show a marked uptrend in the number of workers re-entering the workforce after claiming a disability. Former U.S. Treasury economist Ernie Tedeschi looked at the BLS data and found that the rate “at its fastest pace since before the Great Recession.”

This is important for several reasons. One is that fewer disabled workers collecting benefits will relieve the financial strain on the troubled SSDI program — which is teetering on insolvency. More importantly, it means that more people are getting jobs and paying taxes, rather than collecting benefits as their skills grow increasingly outdated.

The fact that more disabled are returning to the workforce is also further evidence that the labor market isn’t nearly as tight as some economists fear. There are millions more potential workers still sitting on the sidelines. A booming economy will bring many of them back onto the playing field.


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Originally posted 2018-01-20 23:48:34.


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