BrianGarst.com

There’s a rash of mental and physical disabilities sweeping the nation, but we don’t need to turn to the CDC for a diagnosis:

With their unemployment-insurance checks running out, some of the country’s long-term jobless are scrambling to fill the gap by filing claims for mental illness and other disabilities with Social Security — a surge that hobbles taxpayers and making the employment rate look healthier than it should as these people drop out of the job statistics.

“It could be because their health really is getting worse from the stress of being out of work,” says Matthew Rutledge, a research economist at Boston College. “Or it could just be desperation — people trying to make ends meet when other safety nets just aren’t there.”

As of January, the federal government was mailing out disability checks to more than 10.5 million individuals, including 2 million to spouses and children of disabled workers, at a cost of record $200 billion a year, recent research from JPMorgan Chase shows.

The sputtering economy has fueled those ranks. Around 5.3 percent of the population between the ages of 25 and 64 is currently collecting federal disability payments, a jump from 4.5 percent since the economy slid into a recession.

Are these people suddenly getting hurt? Are they getting stressed out or desperate from unemployment, as research economist at Boston College Matthew Rutledge suggests? I say not. What we are seeing is the moochiness factor.

Not all people on unemployment insurance are moochers by any stretch of the imagination. These folks understand they need something as a bridge to their next job and future paychecks, and they treat it as such. If I were suddenly unemployed I would similarly have no qualms accepting the payments, since I’ve already been forced to fork over my tax dollars for it. But make no mistake about it, there is a subset of recipients for whom UI is not merely a bridge, but a destination.

Recent academic research has unsurprisingly shown subsidizing unemployment increases joblessness:

This paper uses multiple regression analysis to estimate the impact of extended UI benefits on the unemployment rate after controlling for the severity of the recent recession. The extension of UI is found to have a positive and significant impact on the national unemployment rate… The UI benefit extensions that have occurred between the summer of 2008 and the end of 2010 are estimated to have had a cumulative effect of raising the unemployment rate by .77 to 1.54 percentage points.

I’m going to go out and a limb and guess that there is a good bit of overlap between the .77 to 1.54 percent of the population which decides not to work and instead mooch off of taxpayers for as long as possible, and the .8 percentage point increase in the number of “disabled” since the start of the recession. This overlap represents the moocher class.

unemployment