Episode 446: The Invisible 14 Million

Mar 25, 2013
Originally published on March 25, 2013 11:33 am

We're an economics show. We cover the economy. But it's come to our attention that, until now, we've missed one of the biggest stories in our economy: The startling rise in the number of people on federal disability programs.

It's the story of 14 million people who don't show up in most of the numbers we look at to understand the economy. These 14 million Americans don't have jobs, but they don't show up in any of the unemployment measures that we use. They receive federal assistance, but are often overlooked in discussions of the social safety net.

On today's show: What disability in America says about the state of the American workforce, and about what it means to be poor in America nearly 20 years after we ended welfare as we knew it.

For much, much more on disability, see our giant online story and listen to This American Life this weekend (we're doing the whole hour on disability). And we'll have more disability stories next week on All Things Considered.

Correction: An earlier version of this episode incorrectly named the Minnesota congressman who at first voted against the legislation that expanded the definition of disability. His name is Tim Penny and not Tim Perry.

Music: Alison Moyet's "Invisible" Find us: Twitter/ Facebook/ Spotify/ Tumblr. Download the Planet Money iPhone App.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.

CHANA JOFFE-WALT, HOST:

We're an economic show here at PLANET MONEY. We cover many things. We cover the economy. Alex, I have to say, one of the biggest stories in our economy right now is one that I think we've basically, pretty much missed.

ALEX BLUMBERG, HOST:

A lot of people have missed it, to be fair, almost pretty much the entire national media. I have not heard the story really mentioned at all in any of the national debates we've been having, not during the presidential debates, not now.

JOFFE-WALT: But it's a big, important story. It's a story of 14 million people who are essentially hidden in our economy. There are 14 million Americans who don't have jobs. But these Americans do not show up in any of the unemployment measures that we use, any of the numbers that we look to to explain how the economy's doing. And we didn't know about these 14 million. It took a guy deeply obsessed with data, with numbers to bring them to our attention.

MARK DUGGAN: Right. I love numbers. I mean, I wouldn't call myself, like, a rain man but kind of. Like, I - there's a little (laughter) bit of that. Like, I love thinking about government policies, government programs, government revenues.

JOFFE-WALT: This is Mark Duggan. He first stumbled across these 14 million people years ago back when it wasn't 14 million yet. This was in 1999. Mark is a public policy professor at the Wharton School. And - so there he was doing, you know, what he loves best - poring over government statistical abstracts over his coffee. And as you recall, back in the '90s things seemed pretty good.

DUGGAN: The economy was - just seemed to be kind of on fire it was doing so well, the unemployment rate declining and crime declining and welfare rolls declining. And just - it was a really amazing time in terms of the performance of the U.S. economy. And the - yet, on the - there's this program that sort of just diverged from everything else.

BLUMBERG: That program, the government program for disabled people, technically it's two programs run by the Social Security Administration for people so disabled they can't work. So if you can prove to the Social Security Administration that your disability prevents you from holding down a job, they will pay you money every month, average is about $1,000. And, also, the government covers your health care.

JOFFE-WALT: Which if you're disabled is a big benefit. And - so we're back in the '90s. And these numbers of people, the number of people on these disability programs are growing rapidly, much faster than the population as a whole.

DUGGAN: You know, several percent per year in terms of enrollment was just - it just was - why is that (laughter) happening?

BLUMBERG: Why indeed. Not only was the economy on fire but we'd passed the Americans With Disabilities Act, which bans discrimination against disabled people. You'd think that would mean more disabled people working.

DAVID AUTOR: Nevertheless, the disability rolls were growing.

BLUMBERG: That's David Autor, an economist at MIT. Mark Duggan roped him into this mystery as well. He called David and said - have you seen these numbers? I don't understand what is happening here. So David started looking too.

AUTOR: And we could not find anything in the literature that suggested to us that the underlying health of the U.S. population was deteriorating. So it wasn't...

JOFFE-WALT: People didn't seem to be getting sicker or less healthy?

AUTOR: Did not seem to be getting sicker. In fact, people can have, you know, powered wheelchairs. They can have assistive devices for working with their computers.

DUGGAN: Work is somewhat less physically demanding than it used to be. And, yet, this program was growing rapidly. So that's - what that was all - that was - made it all the more mysterious. You know, my instinct then was that there's something really interesting going on here. And I'm just going to dig somewhat deeper.

(MUSIC PLAYING)

JOFFE-WALT: Hello. And welcome to PLANET MONEY. I'm Chana Joffe-Walt.

BLUMBERG: And I'm Alex Blumberg.

JOFFE-WALT: And today on the show, we have also been digging quite deep into these disability programs. We've been somewhat obsessed with what is happening with our nation's disability programs and trying to figure out what they can tell us about the economy, about how we're doing right now.

BLUMBERG: And when you say we, Chana, you're being a little generous. We have been obsessed. It's true. But you have been doing most of the digging (laughter). This is...

JOFFE-WALT: I'm the most obsessed, probably.

BLUMBERG: This is a story that you've been reporting on for six months. And there are so many interesting parts of this story that we are doing a full hour on This American Life this weekend. And then we're doing a whole week of stories on All Things Considered next week. And today on the podcast we're going to give you a little preview of the This American Life hour and this whole series on All Things Considered.

(SOUNDBITE OF SONG, "INSIVIBLE")

ALISON MOYET: (Singing) You've got me so confused. And there's words I could use. But I'm afraid to say them.

JOFFE-WALT: And I think basically we have to start with the numbers (laughter). That is always the place to start with the disability program. So those numbers Mark and David were looking at back in the 1990s, they were growing then. They've continued to grow. The number of disabled workers has been doubling every 15 years - doubling. And there are now more than 14 million people in this country receiving disability checks from the government.

BLUMBERG: And there are parts of this country, communities all over where 20 - 25 percent of the working age population is on disability, 1 in 4. And on the This American Life episode this weekend and on ATC next week, you take us to one of those places - Hale County, Ala.

JOFFE-WALT: Hale County, Ala., is a place that is completely shaped by these disability programs.

When the checks come in at the beginning of the month, the whole town transforms. I heard this from the former mayor of Greensborough, the county seat in Hale County. His name is John J.

JOHN J.: And the banks here are covered up. You can't get around the banks over here for them coming in with the thing. So everything come, you couldn't park at the bank. We'd be a boom town if the checks come in (laughter) every week, once a (laughter) week or so.

BLUMBERG: There are now lots of places like that in our country. And the more we've looked at the disability programs, the more they up-end a lot of the stories we've been telling ourselves about the economy.

For example, here's a story that you hear a lot. We fixed welfare. Remember, back in the 1990s, President Bill Clinton reformed - the phrase was welfare as we know it. He ended welfare as we know it. He moved millions of people off of welfare and into jobs.

JOFFE-WALT: And that was seen as a huge success, right? We talk about the 1996 welfare reforms as being this major success of moving poor, mostly mothers from, you know, not working into jobs where they could do better for themselves. And that certainly happens. There's a lot of documented evidence that that happened. But when you look at what's happening with the disability programs, the story starts to seem a little more complicated.

BLUMBERG: The disability program has become something like a de facto welfare program for low-skilled adults who don't have good work options.

JOFFE-WALT: Another way in which looking at the disability programs really changes the way that I've been thinking about the economy is about jobs and unemployment, you know, because we talk all the time about jobs and unemployment. Every month it's big news here when the jobs numbers come out.

And the thing about these 14 million people who are on these programs is they're not working. And they're not looking for a job. So they're not counted in any of the numbers that, you know, we talk about all the time.

BLUMBERG: Which means when you take the disability data into account, recoveries have been weaker. And downturns have been worse.

Here's economist David Autor again.

AUTOR: Well, that's a kind of an ugly secret of the American labor market, that part of the reason our unemployment rates have been low until recently is that a lot of people who would have trouble finding jobs have - are on a different program. They're on the disability insurance program. And they don't show up in the labor force statistics. And - so it artificially reduces the unemployment rate that we observe.

JOFFE-WALT: So you're saying we all already knew it was bad. It's actually worse than we think?

AUTOR: It is. It's been worse than we thought for a long time. This has been going on, you know, pretty rapidly for now more than 20 years.

JOFFE-WALT: So it's this massive change that has happened in our economy. And, you know, if we think about these disability programs as a sort of default social safety net, they're a very expensive default social safety net. They cost about $260 billion a year.

BLUMBERG: A quarter of a trillion dollars.

JOFFE-WALT: A quarter of a trillion dollars is another way (laughter) of saying that. And a quarter of a trillion dollars is a lot of money. That is more than we spend on welfare and food stamps combined.

BLUMBERG: And on the This American Life program and the NPR series, you spend a lot of time looking into what is behind that growth. Why has this program been growing so continuously and so quickly? And there's obviously lots of factors. There's a changing workforce. There's the growth in something that we term in the reports the disability industrial complex.

JOFFE-WALT: Coined right here at PLANET MONEY.

BLUMBERG: (Laughter) Exactly. But behind all of that there's this simple change in the law.

JOFFE-WALT: Yeah. So Congress made this change. In 1984, Congress basically voted to expand the definition of what was considered to be a disabling condition. So the government chose to include diagnoses like back pain or depression, mental illness.

BLUMBERG: Now these things of course can be severe. But they're also more difficult to diagnose, to measure precisely. They're more difficult certainly than cancer and heart disease and other more typical disability diagnoses, that were more typical anyway.

JOFFE-WALT: Yeah. And what was amazing to me, I mean, I can see the argument for including these diagnoses. But I can see an argument against. And what was amazing to me is when Congress talked about this, the bill that contained this definition change, it was extremely popular.

You are the only person who considered voting no on this bill.

TIM PENNY: Yeah.

BLUMBERG: This is Tim Penny, former Democratic congressman from Minnesota. And what gave him pause is this strange fact about disability that most of us don't really stop to consider. There is no diagnosis called disability. There's not a blood test you can take. You don't go to the doctor and the doctor says we've run the tests, and it looks like you have disability.

It is, by definition, squishy. And Congressman Penny was worried he and his colleagues were about to make it lot squishier.

PENNY: You know, just because we all have back pain. I mean, I right now have a broken ankle. You know, OK, fine. If I have a persistent ache in my ankle because of this, I'm not going to file for disability but some people will. Because it's allowed, you do it. And you don't feel like there's anything wrong because it's allowed.

So, yeah, I had some concerns about providing the definition into areas where science and the medicine is not absolutely clear. Who knows pain? - only the person that's experiencing it. And I just don't think we ought to have a system that's - that is that open-ended.

JOFFE-WALT: But I looked up the final vote. And there were a lot of, yeas, and not a single, nay. In the end, the - in the end the vote...

PENNY: Yeah. I...

JOFFE-WALT: ...For the final law was unanimous. So you...

PENNY: Yeah...

JOFFE-WALT: ...Changed your mind?

PENNY: ...And I think what, I - no, I don't know that I - what I did was what you sometimes do. You sort of look there - I'm going to be the only one voting, no. (Laughter) obviously no one else agrees with me. So (laughter) maybe I'm wrong. But honestly, I don't think I was wrong.

JOFFE-WALT: So basically just peer pressure.

PENNY: Yeah. And, you know, that's just a factor in politics. I don't want to stick out like a sore thumb here. I could be wrong. But I think I'm right.

JOFFE-WALT: Do you think you were right?

PENNY: In retrospect, yeah, I think I was. I don't think I even imagined the rather dramatic explosion of application for disability payment.

BLUMBERG: And in the years since, these expanded definitions that included musculoskeletal problems like back pain and mental and emotional problems like depression have gone from a small fraction of total claims to the majority of claims today. Over 50 percent of people on disability today have diagnoses in one of those two categories.

JOFFE-WALT: And like a lot of things with this story, this is actually very dramatic to see visually represented.

BLUMBERG: Fortunately, we have a place you can do...

JOFFE-WALT: (Laughter).

BLUMBERG: ...Just that (laughter).

JOFFE-WALT: We do.

BLUMBERG: Well, on top of all the other stuff that we've been doing, the radio stories for This American life and for All Things Considered, we - our team Lam and Jacob have been working to build this amazingly beautiful web magazine of the story. And it's really cool. You can find it on our website, planetmoney.com.

JOFFE-WALT: It is definitely worth looking at. It's gorgeous. I feel very proud of it despite the fact that I had (laughter) little to do with making it happen and...

BLUMBERG: Except doing all the reporting and writing all the words. (Laughter).

JOFFE-WALT: There's a lot of really beautiful graphs and charts. And I know it is unusual to say beautiful graphs and charts. But they are really surprising to look at. You should definitely check it out.

BLUMBERG: Also, check out the stories this weekend on This American Life and all next week on All Things Considered. There is so much fascinating stuff in there that we barely touched on today on the podcast. We hope you enjoy it. You can also listen to those stories on the web at our homepage, planetmoney.com or at This American Life's site, thislife.org.

I'm Alex Blumberg.

JOFFE-WALT: And I'm Chana Joffe-Walt. Thanks for listening.

(SOUNDBITE OF SONG, "INVISIBLE")

MOYET: (Singing) Invisible. I feel like I'm invisible. You treat me like I'm not really there. And you don't really care. I know this romance, it ain't going nowhere. Invisible - just like your love - you treat me like I'm invisible. Transcript provided by NPR, Copyright NPR.