Vox Media published an interesting article that discusses the fact that the rising economy, prior to the Trump-Covid-19 collapse, resulted in a drop in people applying for Social Security benefits. This simple fact seems logical on its face. But the Vox article digs deeper to see what we can learn from this changed circumstance.
The Great Recession
When the Great Recession hit in 2008 and jobs vanished, Social Security saw a dramatic rise in applications for disability benefits. This leads to a lot of speculation as to why this might be. Primary among them was the idea that healthy people who should have been working but could not find a job, turned to
Social Security disability. This thinking implied that many of the Social Security disability claims during the Great Recession were not well-founded, or indeed, outright bogus.
Workers Wanted To Work
This line of reasoning is undercut by statistics showing that one-third of new hires were coming from the ranks of those who were previously considered disabled. This could suggest that people were in fact going on Social Security disability for bad reasons. But, it can also be read to show that these workers were always prepared to go to work and wanted to work but that the Great Recession squeezed them out of the labor market. If the plan had been to cheat their way into a government check, these workers would still be on disability.
More Opportunities For The Disabled
It appears that when unemployment was low, businesses were willing to look at potential hires they would not have when times were bad. They were also more likely to make reasonable accommodations for people who might otherwise have been unemployable. Indeed, many of those getting Social Security disability may have used those benefits to learn new skills that will allow them to re-enter the job market.
It Always Comes Back To Health Insurance
The next big challenge for getting the disabled back into the workforce is health insurance. Too many employers still do not provide adequate, if any, health insurance. It is a big issue for the disabled to go back to work and lose their Medicare or Medicaid. This alone might be keeping tens of thousands of people who might be able to work on the sidelines.
Delay Me Once, Shame On You
Another factor is how long it takes to get Social Security disability. A beneficiary contemplating a return to work is likely to consider how long it took to get benefits in the first place. That has to make it harder to make the jump back into employment, knowing that if it does not pan out, another 2-3 year wait to get back on Social Security disability could occur.
Have you gone off disability and returned to work? If so, how did it go? Was in the right decision? Let me know.