The state of the economy is a hot topic in the news and in casual conversation.  During these discussions, the related topic of disability inevitably comes up.  Unfortunately, there are a few misconceptions that many people unwittingly spread when talking about disability and the economy.  Here are some reports from the Social Security Administration that shed some light on the truth.

Misconception #1:  Social Security Disability enrollment is rising at a rapid rate.

You have probably heard some “doom and gloom” by now from talk show hosts, coworkers, and friends about how disability enrollment just keeps growing.  In general, problems and scandals make good headlines for news publications.  However, while the number of disability recipients has indeed grown over the past few decades, the rise seems to be leveling off.  According to the Social Security Administration, the number of beneficiaries has fallen since 2014.  The SSA further predicts that this number will remain stable into the coming decades.

Growth in Disability Insurance Rolls Has Stopped

Misconception #2:  People who lost their jobs in the recession gave up and got on disability.

This one is partly true and partly false. As NPR reported, Americans in certain parts of the country have few work options in their impoverished or rural towns.  This means that when those workers get hurt, or their employer closes or relocates, they are less likely to find another type of work they can do.  The SSA therefore considers these workers disabled.

However, it is more difficult to be approved for Social Security Disability benefits than many people realize.  The recession caused a much sharper spike in the amount of people trying to get on disability than those who were actually awarded benefits.  So, while the amount of beneficiaries has indeed risen in correlation with the recession and its effects, this number only represents a fraction of the total number of applicants.

Disability Insurance Applications Highly Sensitive to Business Cycle - but Benefit Awards Much Less So

Misconception #3:  More Americans get disability benefits because of a growing entitlement mentality.

It is tempting, especially for the average Southern Illinoisan, to assign the cause of disability growth to a changing American culture that does not value hard work and personal integrity.  However, the facts from the Social Security Administration enable a less pessimistic explanation:  The rise in disability recipients reflects a changing workforce, in these four ways.

  1. Population growth in the US. The United States population grows every year.  Part of the reason rates have increased is simply due to a natural increase in the number of workers.
  2. Rise of employed women. Thanks to changing social, economic, and political landscapes, many more women now work outside the home than they did 25 years ago.  Most of these working women pay into the Social Security system with every paycheck, so when they get hurt or sick, they are eligible for Social Security disability insurance benefits.  (The chart below shows the increase in claims for women since the 1970’s.)
  3. An aging workforce. Baby Boomers have aged into their 50s and 60s, and many can’t do the kind of work they used to during their 30s and 40s.  This is normal for any generation, but because of the baby boom, the amount of people aging into peak “disability years” at the same time is larger than normal.
  4. Increase in full retirement age.Social Security’s full retirement age has changed from 65 to 66 (and it is still going up), and that increases the number of years that people work before they retire.  This means there is a whole group of workers who are between 65 and their full retirement age who could qualify for disability benefits when their health makes it impossible for them to work full time.

Here is a graphic from the Social Security Administration which includes a chart adjusted to take into account the above four factors (population growth, women in the workforce, Baby Boomers, and increase in full retirement age).  Comparing the left chart with the right, you can see that the increase in the percent of insured workers receiving benefits is not as large when we account for these facts!

Increase in Disability Insurance Rolls Largely Reflects Demographic Factors

Joni Beth Bailey is a Southern Illinois Social Security Disability attorney.