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August 01, 2006
Freeloaders
Russ Roberts links to a NYT piece on declining male labor force participation. It's a good thing in some ways--increased prosperity has allowed for early retirement. Alas, there are also some folks who relying on other folks to work in their stead as this passage excerpted by Roberts indicates: But the fastest growing source of help is a patchwork system of government support, the main one being federal disability insurance, which is financed by Social Security payroll taxes. The disability stipends range up to $1,000 a month and, after the first two years, Medicare kicks in, giving access to health insurance that for many missing men no longer comes with the low-wage jobs available to them. No federal entitlement program is growing as quickly, with more than 6.5 million men and women now receiving monthly disability payments, up from 3 million in 1990. About 25 percent of the missing men are collecting this insurance. The ailments that qualify them are usually real, like back pain, heart trouble or mental illness. But in some cases, the illnesses are not so serious that they would prevent people from working if a well-paying job with benefits were an option. The disability program, in turn, is an obstacle to working again. Taking a job holds the risk of demonstrating that one can earn a living and is thus no longer entitled to the monthly payments. But staying out of work has consequences. Skills deteriorate, along with the desire for a paying job and the habits that it requires. Pay particular attention to the third paragraph--the illnesses are no so severe that they would prevent someone from working a high pay/high benefits job. Since when does the severity of a disability depend on a person's labor market alternatives? BTW, there's a thriving legal practice in helping people receive Social Security disabilty payments. Posted by E. Frank Stephenson at 09:29 AM in Misc.
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