Unemployment Dropping as Jobless Turn to Disability Instead

The recent drops in first time unemployment claims should be great news, but it may not be. Certainly, economic news is turning south so why the positive news on unemployment figures?

The Wall Street Journal may just have the answer:

A huge wave of applicants joined the program over the past decade, boosting it from 6.6 million beneficiaries in 2000 to 10.2 million in 2010. New recipients have come from across the country, with an 85% increase in Texas over 10 years and a 69% increase in New Hampshire.[1]

It would appear that as unemployment benefits wear out or job seekers give up, they turn to Social Security Disability Insurance. State government’s may well be helping that happen as it takes the burden off of the unemployment insurance funds that they are responsible for and puts it on the Federal government, more specifically, Social Security.

Certainly the unemployed find it easier to deal with. They would no longer be required to hunt for a job in order to collect the check. If their disability is permanent, so is the check.

States have no incentive to ramp up enforcement, it’s not their money and it takes some pressure. The claimant has no reason not to do it, they get a check even though they’ve already exhausted unemployment benefits. The only people with incentive to fix it would be those paying the payroll  taxes to fund the SSDI: working people and business owners – and what can they do?

Sources:
[1] https://online.wsj.com/article/SB10001424052748703752404576178570674769318.html?mod=googlenews_wsj