Readers who pay attention to the unemployment rate may have heard the latest numbers show that, although only 6.7 percent of Americans seeking work are unable to find it and overall employment is recovering, nearly 37 percent of Americans at or above 16 years of age have dropped out of the labor force. The latter figure, which is the labor force participation rate—has been declining fairly steadily since the recession.
There is no consensus among economists as to why the participation rate is decreasing. The trend could be part of a cyclical pattern and may end up rebounding. It could be driven by the aging of baby boomers and retirement. Among the young, inadequate training, discouragement and increased seeking of disability insurance are also listed as possible factors.
It isn’t surprising that disability insurance, including SSDI, would be blamed as part of the problem. Social Security disability tends to take a lot of heat, even in instances when it isn’t deserved. Even if increased seeking out of SSDI is part of the problem, readers should keep in mind that the Social Security Administration does have incentives aimed at encouraging workers to return to the job market when they are able to do so.
The biggest incentive the program provides is a safety net; beneficiaries who want to test out their ability to return to work do not have to worry that they will be without support if their effort fails. Beneficiaries who return to work have an allotted amount of time in which they can test out their ability to work, without risk.
Those who want to find out more about Social Security disability work incentives should contact the Social Security Administration or speak with an experienced SSDI attorney.
Source: The Wall Street Journal, “The Unemployment Puzzle: Where Have All the Workers Gone?,” Glenn Hubbard, April 4, 2014.