U.S. Disability Programs Need a Work Requirement
(Bloomberg View) -- The U.S. faces a social and fiscal crisis: Millions of Americans of prime working age do not have jobs, while the cost of federal disability programs -- which many in the non-working population have come to rely on -- has skyrocketed. And there's no end in sight.
One solution: Let’s reassess whether people really cannot work and, for those who are able, move them into jobs.
If you think this is an unrealistic goal, remember there is ample precedent: the successful welfare-to-work evolution that began in 1996. More than 60 percent of the welfare rolls were trimmed in the first decade, and people made the transition to work because they had to.
Today, approximately nine million people in the U.S. collect disability, compared with three million in 1990. This rise has occurred despite better medical management of the major afflictions that result in disability, from mental disorders like depression and anxiety to diabetes to bad backs. The two big disability programs for the recipients cost $150 billion in 2015. Close to an additional $100 billion is spent for health care.
As was the case with welfare, a disability industrial complex has become entrenched, the aim being to put as many people on the rolls as possible and keep them there. Bureaucrats and administrative judges handcuffed by technical formulas are either forced to accept an application for disability insurance or are predisposed by compassion to do so. This industry includes lawyers who specialize in helping people get disability insurance.
How can we break the cycle, humanely, and provide the opportunity for the dignity of work? By "work," I don’t mean "make work" public-sector jobs. While those programs serve as a useful transition, they are not the long-term solution. My for-profit company, which began as a welfare-to-work program in 1984, contracts with government agencies to get the disabled into private-sector jobs.
Our experience is that job training and education are not as effective as putting people into jobs first. Most of our candidates have been failed by schools and training programs. Success in a job leads to advancement, self-reliance and the spiritual value of work well done. It is then that education and training become relevant to the worker and provide for upgrading and better wages.
First, let’s dispel the myth that people on disability do not want to work or they can't. A similar argument was made about welfare recipients back in the 1980s. There are, of course, many people collecting benefits who are unable to hold a job, for physical or mental reasons. The purpose of Social Security Disability Insurance is to help them.
But a voluntary program first developed in 1999 by the Social Security Administration, Ticket to Work, has shown that many recipients of the benefit are able to work and will do so. No requirements have been implemented, however, because the assumption is that if someone qualifies for disability, he or she can't work.
Some conservatives believe that if people can work, they should not be on a benefit. Liberals often posit that if someone is disabled they should not work. But my experience, working with thousands of disabled individuals, is that so many can and want to have a job. Lee Bowes, the CEO of America Works, estimates at least 40 percent could be working. If we cut that figure in half for argument's sake, the U.S. could be saving approximately $30 billion a year (not including the cost of health care) from reduced disability payments, and see a huge increase in tax revenue and production in companies by their newly injected labor.
The Ticket to Work program has a nine-month transition period in which disability recipients can continue to receive their benefits as well as a salary. After that, the payment is reduced. This allows people a cushion until they have succeeded in a job.
The billions of dollars saved by the transformation of Social Security Disability Insurance would go a long way to create the work opportunities that offered the dignity and rewards of being part of our economy. Taxpayers would rejoice. And the private sector would gain access to a willing and able workforce.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Peter Cove is founder of America Works and author of "Poor No More: Rethinking Dependency and the War on Poverty."
To contact the author of this story: Peter Cove at email@example.com.
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