Wednesday, July 31, 2013

Chances of Winning a Social Security Claim

UPDATE: September 16, 2016 -- Social Security Administration Cuts Hurt Every State

The Center on Budget Policy Priorities (CBPP) published a report this week detailing the negative impact of budget cuts on the Social Security Administration (SSA). Since 2010, SSA’s operating budget has been cut by 10 percent, affecting Americans in all 50 states. Budget cuts have led to a steep decrease in the number of SSA employees, field office closures, and a record-high disability backlog.

Nationwide, 6 percent of SSA staff have been cut, but some states like West Virginia have lost over 15 percent since 2010. There have also been over 600 field and mobile office closures.

Staff cuts have led to declines in service in every state. This is most apparent in the backlog of disability hearing. Disability Determination Service (DDS) staff has shrunk 14 percent nationwide and a struggle to meet the growing demand for services. In 2011 the average wait for a decision was 360 days; this year the wait has stretched to 540 days. Prolonged delays for benefits have had a tremendous human cost, forcing some applicants to foreclose on their homes or declare bankruptcy.

“It’s clear that SSA’s diminished operating budget has hurt communities throughout the country,” said Joseph Peters, Jr., Secretary-Treasurer of the Alliance. “Millions of Americans suffer dramatically from case backlogs and falling customer service.”

The advocacy group Social Security Works, which is an Alliance partner, also reported on the effects of SSA's administrative budget cuts by state.

Updated May 13, 2015 (I just learned about this today): Google "Padro v. Astrue" -- A class action lawsuit complaining of generalized bias by five Administrative Law Judges (ALJs) in SSA’s Queens, New York hearing office. The court’s approval clears the way for new hearings to be provided to about 4,000 claimants who received unfavorable (or only partially favorable) decisions by these ALJs from January 1, 2008, through October 18, 2013. The settlement provides for the creation of a new, special unit in the Appeals Council that will automatically review all unfavorable and all appealed partial favorable decisions by the five ALJs for a 30-month monitoring period that begins on October 19, 2013. Claimants denied during this period will have their claims assigned to ALJs other than the five if their claims are remanded. More here...

http://www.empirejustice.org/assets/pdf/publications/dap-news/disability-law-news-1.pdf

http://www.socialsecurity.gov/padrosettlement/

http://www.ssa.gov/OP_Home/hallex/I-05/I-5-4-71.html


Update April 12, 2015 - It appears that all the Republican hyperbole about "easy claims" and "bogus awards" has been having a big affect. Because terminations for disability benefits cancel out "awards" in any given year, and because only 1/3 of all claims were awarded last year, there was only a net gain of 11,934 disabled workers in payment status for disability benefits in 2014 — and that's out of  over 2.5 million claims. Deaths and conversions to regular Social Security retirement benefits account for most of the terminations that occur, because disabled and older people tend to apply for these benefits (not young healthy people who are lying and cheating to get on the government dole.) It's shame that so many people, who probably deserve the benefits, are now being denied. And no — it has nothing at all to do with reducing "fraud". Two studies show there was only 0.4 percent — far less than most other government programs. -- Source: Disabled Workers and Awards in Payment Status
Year Applications (claims)  Approval Rate Awards  In Current Payment Status Terminations
2013 2,640,100 33.51% 884,894 8,942,584 767,738
2014 2,521,459 32.16% 810,973 8,954,518 793,646
YTD Change -102,641 -1.35% -73,921 11,934 25,908

* Cut Defense Spending to Save Social Security, or Raise Taxes


PAST UPDATE: This page gets a lot of views, so I've added my most recent articles on this subject, which are posted at the Economic Populist:

UPDATE: AARP FINALLY mentioned the Republican's rule change to defund disability in their newsletter today (1/29/2015) ... BUT ... they didn’t use that as their headline story in their newsletter ...AND.... they used the words “Congress” and “House”, but they never mentioned “Republicans” or “GOP”.

Also notice: Their newsletter first mentions this today, but the ARRP story they link to (buried on their website and was never on their front page) was dated Jan. 7 --- so why did AARP wait so long to mention this in their newsletter? Also notice: In the “old AARP story” that the AARP newsletter links to, there’s also just the mention of “Congress” and the “House”, but no blame was laid on the “Republicans” or the “GOP” – so how would AARP members (and especially Republican voters) know who is undermining their disability?

Other organizations, such as The Alliance for Retired Americans, Social Security Works (and others) came out about this HEADLINE STORY the very next day in their newsletters (and mentioned “REPUBLICANS” or “GOP”). Did AARP only belatedly and “casually” mention this in today’s newsletter because I emailed them last week to complain?

This makes me very suspicious of AARP – and it’s possibly because of AARP’s association with insurance companies that they REFUSE to squarely lay the blame on the GOP (or the Republicans.) Everybody should call AARP out on this --- BECAUSE --- disabled Republican voters should know the truth as to really watching their back (HINT: It's not the Republicans or AARP)


 

This is what I found about the chances of winning a SSDI claim from 4 different sources.

Source One: 35% of initial applicants were awarded. Here's the path through the process:

  • There's the initial claim (either online or at your local SSA office),
  • and two subsequent written appeals if any other claim is denied,
  • then there's a hearing before an administrative law judge (ALJ),
  • then there's the Appeals Counsel if a claim is denied at the hearing level,
  • and lastly, there's federal court.

The highest winning percentage is at the hearing level, which nationally has a winning percentage of 62%, with 25% losing, and the remaining 13% dismissed for one reason or another.

Many cases that are denied at the hearing level appeal to the Appeals Council. Most cases at the Appeals Council are denied at a 74% rate. Almost a quarter of the cases are remanded or approved. A remand is when the case is sent back to the administrative law judge (in most cases the same administrative law judge) and the Remand percentage rate for 2010 was 22%.

Only 2% of the cases at the Appeals Council were completely reversed and won. The last 2% were dismissed for one reason or another.

Of the 83,000 cases appealed to the Appeals Council 12,000 cases were taken to Federal Court. At the Federal Court level also called US District Court, there is a pretty even split. 40% of the cases taken to federal court were denied. 47% of the cases taken to Federal Court were remanded and 4% were approved out right. 9% of cases were dismissed. Keep in mind these are the national average for cases decided in 2010 and although it gives you a good picture these numbers may differ from year to year and depending upon where your case is being decided and by which particular decision maker or ALJ (the hearing judge).

Source Two: Forty-percent of claims were approved at the hearing level if a claimant went to the hearing without the benefit of social security representation, while sixty-two percent of represented claimants were awarded benefits.

Source Three: Very few Appeal Council Review appeals end in an outright approval for disability. Most appeals are denied with a few being remanded back--to the administrative law judge who made the original decision--for review. But even those disability cases that are remanded to the ALJ for review are often denied.

Age will play a role in determining decisions on disability claims but usually comes into play when a person is older, either fitting into the fifty and above age range, or the fifty-five and above age range. These are the points at which age becomes more of a consideration and age can provide a benefit for someone who has relatively more functional limitations and, correspondingly, less education and fewer job skills.

Your level of education does a play a role in the evaluation process used by both the social security disability and SSI disability programs. However, the effect of one's education level is not nearly as much as many people would assume. And there are many cases in which educational level does not even enter into the process.

These cases, of course, are those in which a claimant is approved on the basis of satisfying the requirements of a listing in the blue book (the social security disability list of impairments).

When cases are approved this way, it is because their medical records provide detailed enough information which conforms to the disability approval criteria of a specific listing, such as, for example, lupus or bipolar disorder, or degenerative disc disease.

Source Four: What are my chances of winning at the Appeals Council level? The Social Security Administration reports that on average, this is how Appeals Councils decisions end up:

  • 72% of the Requests for Review are denied
  • 22.5% of the cases are remanded to an ALJ
  • 3% of the cases result in the Appeals Council issuing a new decision,
  • and 2.5% of the cases result in a dismissal (because the request for review was not filed by the deadline).

If your case is remanded, you have a good chance of eventually getting awarded partial or full benefits. Keep in mind that more time will have passed since the original ALJ decision, during which your condition may have deteriorated, and you can submit additional evidence at the remand hearing showing how your disability has worsened over time.

In addition, even if your review is denied, you can then take your case to the federal district court level where there is a greater likelihood of getting awarded disability benefits or receiving a remand.

The Appeals Council can also independently decide to review a favorable ALJ decision and then issue a new decision that is partially or fully unfavorable.

Tuesday, July 30, 2013

Corporate Tax Rates May Go Down

President Obama, seeking to break a stalemate with Republicans, announced Tuesday that he would cut corporate tax rates in return for a pledge from Republicans to invest in more programs to generate middle-class jobs.

Using a sea of cardboard boxes in a cavernous Amazon distribution center as a backdrop, Mr. Obama described a grand bargain' for the middle class that he said would stimulate the economy while giving businesses the lower tax rates they have long sought. The terms of Mr. Obama’s tax plan were outlined in early 2012 by Timothy F. Geithner, his former Treasury secretary, who said the corporate tax rate would be reduced to 28 percent, from 35 percent, with a lower rate of 25 percent for manufacturing firms.

The choice of Amazon was meant to illustrate Mr. Obama’s theme of a job revival in America. The company recently announced plans to hire 5,000 more workers at 17 fulfillment centers, where it packs and ships customer orders. But the White House came under fire because many Amazon jobs pay only $11 an hour, and the pace of the work in these warehouses has been described as exhausting. 

Mr. Obama’s appearance here also raised the hackles of independent booksellers, who blame Amazon, with its deep discounting and massive selection, for putting bookstores out of business.

“We are disheartened to see Amazon touted as a ‘jobs creator’ and its warehouse facility used as a backdrop for an important jobs speech, when, frankly, the exact opposite is true,” the American Booksellers Association said in a letter to Mr. Obama.

One House GOP leadership aide, speaking on background, summed up Obama's plan as a series of proposals that are just the opposite of concessions for Republicans: corporate tax reform without individual tax reform, corporate tax reform that isn't revenue neutral, and additional stimulus spending."

In Chattanooga, Tenn. Obama outlined his so-called "grand bargain for middle-class jobs," which the White House is framing as something that Congress can pass amid stalled efforts at broader deficit reduction. His proposal would pair a cut in corporate tax rates with new investments in manufacturing, infrastructure and community colleges. White House officials say the money for the new investments would come from a one-time revenue boost generated by changing depreciation rules or a fee on earnings held overseas.

Boehner spokesman Michael Steel reiterated that Republicans won't support a corporate tax reform plan unless it's paired with individual tax reform." This proposal allows President Obama to support President Obama's position on taxes and President Obama's position on spending, while leaving small businesses and American families behind."

Meanwhile the Wall Street Journal reports," Republicans [currently engaged in informal talks with White House officials] have suggested changes to Medicare, including switching to a slower-growing gauge of inflation that would reduce benefits, and "means-testing" the program by charging well-to-do senior citizens higher premiums. In the past, Mr. Obama has said he could consider both ideas as part of a larger deal. Republicans also proposed raising the eligibility age for Medicare, a concept the White House dislikes. Mr. Lew said on Sunday the White House wants to replace the sequester with a combination of changes to entitlement programs and adjustments to the tax code—often code for raising revenue by eliminating tax breaks."

There's a petition that was put up online to eliminate the cap on Social Security taxes. Billionaires like the Koch brothers pay the same amount in Social Security tax as someone who makes $113,700 a year (or less, or none at all if all their income is earned from capital gains on stocks). But if we're going to lower the "statutory" 35% corporate tax rate (even though these businesses pay a much lesser "effective" tax rate), we should at least lift the cap on Social Security taxes. I would also suggest taxing capital gains as regular wages. But the billionaires have been lobbying to kill a new minimum wage bill. That's another reason why "white" is now the predominate face of the poor.

Monday, July 29, 2013

Study: More Whites Poor than Ever

Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

The numbers below come from Rank's analysis being published by the Oxford University Press. They are supplemented with interviews and figures provided to the AP by Tom Hirschl, a professor at Cornell University; John Iceland, a sociology professor at Penn State University; the University of New Hampshire's Carsey Institute; the Census Bureau; and the Population Reference Bureau. AP Director of Polling Jennifer Agiesta, News Survey Specialist Dennis Junius and AP writer Debra McCown in Buchanan County, Va., contributed to this report.

In the most recent AP-GfK poll, 63 percent of whites called the economy "poor."

While racial and ethnic minorities are more likely to live in poverty, race disparities in the poverty rate have narrowed substantially since the 1970s, census data show.

Economic insecurity among whites also is more pervasive than is shown in the government's poverty data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press.

Marriage rates are in decline across all races, and the number of white mother-headed households living in poverty has risen to the level of black ones.

Nationwide, the count of America's poor remains stuck at a record number: 46.2 million, or 15 percent of the population, due in part to lingering high unemployment following the recession. While poverty "rates" for blacks and Hispanics are nearly three times higher, by "absolute numbers" the predominant face of the poor is white.

More than 19 million whites fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation's destitute, nearly double the number of poor blacks.

Sometimes termed "the invisible poor" by demographers, lower-income whites generally are dispersed in suburbs as well as small rural towns, where more than 60 percent of the poor are white.

4 in 10 adults falls into poverty for at least a year of their lives.

The risks of poverty also have been increasing in recent decades, particularly among people ages 35-55, coinciding with widening income inequality.

Higher recent rates of unemployment mean the lifetime risk of experiencing economic insecurity now runs even higher: 79 percent, or 4 in 5 adults, by the time they turn 60.

Compared with the official poverty rate, some of the biggest jumps under the newer measure are among whites, with more than 76 percent enduring periods of joblessness, life on welfare or near-poverty.

For the first time since 1975, the number of white single-mother households living in poverty with children surpassed or equaled black ones in the past decade

Since 2000, the poverty rate among working-class whites has grown faster than among working-class nonwhites, rising 3 percentage points to 11 percent as the recession took a bigger toll among lower-wage workers.

Going back to the 1980s, never have whites been so pessimistic about their futures, according to the General Social Survey, a biannual survey conducted by NORC at the University of Chicago. Just 45 percent say their family will have a good chance of improving their economic position based on the way things are in America.

"Poverty is no longer an issue of `them', it's an issue of `us'," says Mark Rank, a professor at Washington University in St. Louis who calculated the numbers. "Only when poverty is thought of as a mainstream event, rather than a fringe experience that just affects blacks and Hispanics, can we really begin to build broader support for programs that lift people in need."

Records Profits, but most hiring is Overseas

The year 1979 may very well have been the year when the middle-class in America had first began it's long decent into oblivion. According the U.S. Bureau of Labor Statistics, manufacturing in the U.S. peaked in 1979 when we had over 19.6 million manufacturing jobs in a labor force of 104.6 million (18.7% of the work force). Now we have 155.8 million in the labor force with 11.8 million workers unemployed. That's because manufacturing has left our shores, and it has been on a downward trend ever since --- with no end in sight.

1979 was also when mergers among the labor organizations began increasing --- when the total number of union members had peaked at over 22 million. And it's also no coincidence that today the labor force participation rate is at the lowest it's been since 1979. And 1979 is also the year when the U.S. broke off formal diplomatic relations with Taiwan and established full diplomatic relations with China. There is no coincidence here. All roads lead to China.

Lewis Franklin Powell Jr. wrote his famous "manifesto" on August 23, 1971 just before he was nominated by President Nixon to sit on U.S. Supreme Court. Less than two years later on March 29, 1973 Master Sgt. Max Beilke was officially designated the last American combat soldier to leave Vietnam. Soon afterwards major U.S. companies initially responded to "heightened competition" from Japanese and European multinational corporations by opening factories abroad during the 1970s (which may have involved using the Laogai labor camps in China). The American multinationals manufactured goods that were formerly produced by comparatively well paid, often unionized, factory workers in the U.S.

According to one technical publication, A Brief History of Outsourcing, the current stage in the evolution of outsourcing is in the development of "strategic partnerships", which was first pioneered by Eastman Kodak with their decision to outsource their information technology systems in 1989.

Kodak was quickly followed by dozens of major corporations, whose managers had determined that it was not necessary to own the technology to get access to the information they needed. All throughout the 1990s the offshoring of jobs had escalated --- mostly tech, call service centers and manufacturing --- by companies such as Microsoft, Apple, Hewlett-Packard, IBM and Dell. (During the last presidential campaign, Bain Capital was often mentioned.)

In 1999 Bill Clinton signed the controversial trade agreement with the People's Republic of China. The trade agreement was the result of more than a decade of negotiations, and lowered many trade barriers between the two countries.

It's unclear how many jobs were offshored between 1979 and 2001, but data shows there were 398,887 private manufacturing establishments of all sizes in the United States during the first quarter of 2001, and by the end of 2010, the number had declined to 342,647 --- a loss of 56,190 factories. So the onslaught has continued for the past 35 years.

And as Robert Oak at the Economic Populist pointed out, according to a study by the Economic Policy Institute, over the last decade (from 2001 to 2011) the United States has lost 2.7 million jobs to China alone (and this is a conservative estimate). The China PNTR trade agreement was signed by President Clinton on October 10th, 2000 and China entered the WTO in 2001. Since then our massive trade deficit has skyrocketed, stunting our economic growth and costing America millions of jobs.

And that doesn't even include the multiplier effect (when one job generates another job that is dependent on that job). A study by University of Illinois at Chicago concluded that one manufacturing job in the Windy City leads to 2 more. And on a national scale, the multiplier for a manufacturing job is 4.6 --- higher because of a larger geographic scope for supply chains and induced spending. So those 2.7 million jobs lost to China over just those ten years alone could theoretically equate to 4 or 6 million more.

Robert Oak goes on to note:

"Of the people who lost their jobs through offshore outsourcing, plant closures, business failures and layoffs during 2009-2011, by January 2012 only 56% of them had gotten another job. These are people who held the job they lost for three years or longer, and there were a whopping 6.12 million of those people in this category.

In an updated BEA summary on sales, investment and employment by Multinational Corporations for 2011, we have a 0.1% increase in hiring for jobs in the United States while MNCs increased their hiring abroad by 4.4%.

From 1989 to 2011, U.S. MNCs decreased their employment in the United States by 3.3 million workers while expanding employment abroad by 6.5 million employees. The share of employment by MNCs in the United States went from 79% of their total employees in 1989 to 66.3% by 2011. Multinational corporations are clearly doing their hiring abroad."

In an excellent article about offshoring by Apek Mulay and Dhanjoo N. Ghista, they write:

"During the recent great recession since 2007, many observers wrote the American Manufacturing Obituary, claiming that American could no longer be regarded to be a world leader because of intense competition from low-cost competitors. Trade liberalization has increased the economic interdependence among nations. Multinational corporations in the U.S. have established operations in developing counties where labor is cheaper. One consequence of this increased globalization of manufacturing industry has been movement of jobs and production from the U.S. to Low Labor Cost (LLC) countries (which are often less developed countries) for higher corporate profits. This practice is called offshoring, and is a direct consequence of Monopoly Capitalism, where the prime motive is corporate profits without consideration of job losses for people in the home regions. Globalization works to the detriment of American workers and reinforces unfair labor competition because of lower wages and inadequate working conditions existing in developing nations."

And this is not because Americans lack skills. This has been the "public relations" spin put out by corporate America in defense of their corporate strategy. Alan Blinder, a professor of economics and public affairs at Princeton and a former vice chairman of the Federal Reserve Board, has stated that:

"Contrary to conventional wisdom, the more offshorable occupations are not low-end jobs, whether measured by wages or by education. The correlation between skill and offshorability is almost zero."

His conclusion supports the research of a December 17, 2012 Congressional report on offshoring. Alan Blinder was quoted on page 10 as saying a moderate estimate of 25.6% of all U.S. jobs are most susceptible to offshoring --- and his more aggressive estimate totals almost 40 million, or 29.0% of all U.S. jobs.

A Washington Post article notes that many people believe that Boeing's troubles with its 787 Dreamliner jets is because of outsourcing. Critics have long charged that Boeing was far too reliant on offshore suppliers for the 787′s production. More than 30 percent of the jetliner's components came from overseas.

In his recently published book, After the Music Stopped, Alan Blinder gives the U.S. the post-recession's macroeconomic performance a failing grade:

Total jobs losses were just under 8.8 million, over a period during which we should have added about 3.1 million more, creating a cumulative job deficit of about 12 million by February 2010. Then the job deficit rose even higher in 2010-11 as job creation fell short of the 125,000/month required to keep up with population growth. By August 2012 total employment was only back to April 2005 levels --- for a zero net growth over a period exceeding seven years. In an average month during 1948-2007, less than 13% of the unemployed were jobless for over 6 months; by April 2010, it was over 45% --- and is only slightly less today.

And, despite the cost of labor rising in some Asian nations, there are many others (Nike, etc) whose low wages continue to draw U.S. jobs, such as Vietnam. Many American fast food operators (Starbucks, KFC, etc) have also opened businesses there. McDonalds's also has plans to open soon in Ho Chi Minh City (formerly called Saigon, the city Sgt. Max Beilke last vacated.)

From Nike's website: "When we look at our overall impact on the world, the needs of nearly one million workers in Nike's contract supply chain overshadows any other group." And Nike is but one of many examples (albeit, a very classic example) of globalization. It's a pity that those one million workers in Nike's supply chain are in Asia, not America.

On May 12, 1998 Nike's CEO Phil Knight gave a speech at the National Press Club where he spoke of Nike's reasons for moving factories out of the United States and into mainly third world countries in Asia. "During the 1990s, all our experiences have caused us to really believe in the benefits of international trade. The uplifting of impoverished people, the better values for consumers in industrialized nations, and most of all, the increased understandings between peoples of different cultures."

That seems to be the morality and mindset of a typical globalist, someone who advocates a policy of placing the interests of the entire world above those of individual nations. As one major American hedge fund manager had privately admitted:

"The U.S.-based CEO of one of the world's largest hedge funds told me that his firm's investment committee often discusses the question of who wins and who loses in today's economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn't really matter. His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that's not such a bad trade."

But then again, are they really so concerned about lifting the poor out of poverty in third world nations, or is it just a simple matter of plain old fashion greed, and they are just using these humanitarian excuses (as a public relations matter) as a cause for their actions?

Since the 1990's many major U.S. companies have been criticized for offshoring jobs. Businesses in the manufacturing, tech and apparel industries, such as Apple and Nike (to name just a very few) have often been targeted for using cheap labor in very unsafe and slave-like working conditions abroad.

In their book, Producing Prosperity, Harvard Business School professors Gary Pisano and Willy Shih writes:

"For years--even decades--in response to intensifying global competition, companies decided to outsource their manufacturing operations in order to reduce costs. But we are now seeing the alarming long-term effect of those choices. In many cases, once manufacturing capabilities go away, so does much of the ability to also innovate and compete. Manufacturing, it turns out, really matters in an innovation-driven economy. Companies must reinvest in new product and process development in the US industrial sector. Only by reviving this 'industrial commons' can the world's largest economy build the expertise and manufacturing muscle to regain competitive advantage."

Edward Alden at the Council of Foreign Relations writes:

"They [Gary Pisano and Willy Shih] demolish the comforting story that many economists have offered to dismiss concerns over the shrinking role of manufacturing in the U.S. economy. The conventional argument goes like this: It makes more economic sense to locate the actual production of goods in lower-wage countries, while the United States maintains the skilled parts of the supply chain (R&D, branding, marketing, etc.) The classic example here is Apple: most of the value of an iPhone or iPad comes from the design, software, branding and retailing, not from the assembly. Therefore, U.S.-headquartered Apple can become the most valuable company in the world, even while making virtually nothing in the United States."

The World Trade Organization cites a report from 2000 by the U.S. Department of Labor (Displaced Workers Survey) that used data from 1975 to 1995. It found that rates of job losses were particularly high in sectors with high levels of imports and sectors with high import growth.

The Bureau of Statistics Displaced Workers Summary from August 24, 2012 reports there were a total of 12.9 million displaced workers from 2009 to 2011. The prior survey, which covered 2007 to 2009, numbered 15.4 million. The previous survey reflected the steep decline in jobs associated with the Great Recession that began in December 2007 and officially ended in June 2009. According to the Center on Budget and Policy Priorities, 8.7 million net jobs were actually lost during the last recession.

Prior to the last recession, there appeared to be enough job growth to compensate for most of the lost jobs due to offshoring, although, many Americans were forced into taking lower paying jobs (such as in the retail and fast food industries) and most often without any benefits (such as healthcare and pension plans). And many times they only found part-time or temporary positions, which set them on a never-ending course of "job hopping".

But since the recession, long-term unemployment has been a huge drag on the economy --- and according to the Bureau of Labor Statistics, with 11.8 million unemployed Americans, and 8.2 million working part-time, and another 7 million working multiple jobs to make ends meets, all those millions of offshored jobs are looking even more appetizing.

Since the Great Recession major attention has again returned to the subject of offshoring (some are now saying "reshoring") --- and in conjunction to the Occupy Wall Street movement, an ever increasing focus has also been on wealth inequality, income disparity, corporate greed, CEO pay, stagnate wages and the minimum wage. And then it all comes back again full circle --- back to offshoring for cheap labor.

Meanwhile, corporate cash is once again at a record high. According to a report by the research firm Audit Analytics, large U.S. companies have boosted their offshore earnings by 15 percent last year --- to a record $1.9 trillion, while avoiding hefty tax bills by keeping their profits abroad (rather than invest in American workers). Their overseas earnings stockpile has climbed by 70 percent over the past five years, but most American workers aren't sharing in the corporate booty. Millions are either under- or unemployed. Now 50% of the work force who are working take home $27,000 a year or less. And instead of seeing a pay increase, they saw the biggest drop in hourly pay on record.  It seems workers haven't been reaping the same rewards as their employers --- when "worker productivity" once meant something to the workers too. The Heritage Foundation thinks workers must be more productive.

No...Nike is NOT an American Icon, but is a typical a job creator...overseas.

Wall Street Journal (June 27, 2013) Nike's profits are up again --- their fourth-quarter profits jumped 22%. Nike also expects overall profits for fiscal 2014 to rise in the low double-digits as sales are expected to climb, helped as Nike gears up for the 2014 World Cup in Brazil. Margins are expected to strengthen throughout the year, helped by higher selling prices. Demand for athletic gear in the U.S. has also been strong in recent years, and Nike's sales have been bolstered by apparel tied to a contract with the National Football League.

"Nike's grand strategy for reaping in huge profits every year is really quite simple: just don't pay workers. That's how they sell a shoe for $180 that only costs just $5 to manufacture."

The people who are laboring to make that $180 pair of shoes, and other Nike gear and apparel, are mostly young women, ages 16-24 (Although, in Pakistan, children were once sewing Nike soccer balls for $0.60 a day.) In Vietnam the average worker is paid about $0.20 an hour, or $1.60 a day. (While the cost of eating is reportedly $2.10 a day).

And workers in Vietnam are forced to work 65 hours a week. Not only are they forced into overtime without compensation, the 65 hour work week is in clear violation of Vietnamese labor laws. In the Sam Yang factory in Vietnam there is only one doctor who works two hours a day to service 6,000 workers.

Employees in Vietnam have stated that verbal abuse and sexual harassment are frequent and that corporal punishment is often used. Supervisors have been reported to frequently grab the women's breasts and buttocks.

Nike has reportedly responded to many of these allegations by widely publishing their Code of Conduct in the factories --- but in Vietnam, few workers have even heard of such a code, nor ever learned what provisions were within it.

As of 2013 (from Nike's interactive map) Nike has 777 factories in 43 Countries employing 1,009,496 workers. Just in Vietnam alone Nike has 71 factories with 311,548 workers, mostly female, with an average age of 30. (For a complete list of Nike's factories and employees, download the PDF from Nike's website or the Excel version.)

As with many other major corporations, the Vanguard Group is the largest institutional investor of Nike --- followed by many other banks and private equity firms.

Although Nike argues that they enter a country only when it is ready to make shoes, and then leaves when it has developed past this point, the data suggest a different story. Nike's movement directly correlates with a increased standard of living and increased union bargaining power. When the pressure for wage increase is put on, just like with most other American-based multi-national manufactures, Nike moves on.

This corporate strategy allows for the cheapest labor costs and bargains with the worst governments. The result? Companies like Nike can keep manipulating their stocks, dodging corporate taxes and making shoes for only $1.60 a day --- just so that Nike's CEO can earn $96,000 a day. Heaven forbid if American workers ever made Nike shoes, or else Nike's CEO might only earn a measly $10,000 a day (unless Nike raised the price on their cow leather and rubber shoes to $500 a pair.)

And Nike is just but ONE of many U.S. corporations that operate like this. That's how they can afford to pay their CEOs too much. Here's a list of the top paid CEOs from Forbes and what they earn in just ONE year --- many of them on the back of cheap and exploited foreign labor, at the expense of the American worker.

In a letter from Rep. Mark Pocan and others to Rep. Sander Levin expressing concern about the TPP and Fast Track Authority.
"As the economy continues to recover from the greatest financial crisis since the Great Depression , we can all agree that we cannot afford to have American production and American jobs sent offshore because of unfair trade agreements that undermine our economic growth.  When jobs and production factories are offshored, American wages are lost, American-made products decline, and our international interests are compromised."

In his economic speech at Knox College, President Obama acknowledged the role of unfair trade in stagnant wages and growing inequality:

"In the period after World War II, a growing middle class was the engine of our prosperity...But over time that engine began to stall, and a lot of folks here saw it...Global competition sends a lot of jobs overseas. It became harder for unions to fight for the middle class...And so what happened was that the link between higher productivity and people's wages and salaries was broken...So the income of the top 1 percent nearly quadrupled from 1979 to 2007, but the typical family's incomes barely budged."

Last year's congressional study on offshoring says 29% of U.S. jobs are prone to outsourcing --- and then we can also add in all the new guestworker and H-1B visas with the new immigration bill, flooding an already over-saturated labor market --- then on top of that, we can also add over 4 million long-termed unemployed (and the 99ers) that we already have, and there will be plenty of shoe-shine jobs available for a nickel a shine.

Bring jobs back to America and pay workers a "living wage"...no excuses, Just Do It!

* This was originally posted at the Economic Populist

Saturday, July 27, 2013

Economic Briefs (July 2013)

Tim Taylor wrote on his blog that U.S. firms are holding $1.8 trillion in liquid assets: that is, either cash or marketable securities. What's going on here? Laurie Simon Hodrick tackles the question in a July 2013 policy brief written for the Stanford Institute for Economic Policy Research titled Are U.S. Firms Really Holding Too Much Cash?

Jared Bernstein at the New York Times: Growth From the Middle Out - "At the core of President Obama’s economics speech on Wednesday was the notion that, as rising inequality diverts income growth from the many Americans in the broad middle class, their diminished buying power leads to slower growth. The theory is simple enough and has its roots in basic microeconomics" [as a poor or middle-class person's extra dollars are] "more likely to be spent than saved. The fact that economic growth over this recovery has pretty solidly eluded the poor and middle class is one reason the United States is slogging along at subpar growth rates. In demand-constrained periods like the present, it weakens consumer spending and growth because the small share of beneficiaries of what growth there is have lower consumption propensities than everybody else."

Bud Meyers at the Economic Populist: Obama Didn't Say What Kind of Jobs - "Most of the private sector job [creators] are refusing to hire Americans --- and this is while profits are at roaring highs. Also, the rate of hiring is lower than it was a year ago. And what kind of jobs have been created over the last four years? Michael Grabell of ProPublica, and its editor-in-chief Steve Engelberg, discussed how the temporary work sector has ballooned, accounting for nearly 20 percent of the total job growth since 2009."

Alina Tugend at the New York Times: Unemployed and Older, and Facing a Jobless Future - "For those over 50 and unemployed, the statistics are grim. While unemployment rates for Americans nearing retirement are lower than for young people who are recently out of school, once out of a job, older workers have a much harder time finding work. Over the last year, according to the Labor Department, the average duration of unemployment for older people was 53 weeks, compared with 19 weeks for teenagers. David L. Blustein is a professor of counseling, developmental and educational psychology at the Lynch School of Education at Boston College and works with the older unemployed in suburb of Boston. He says, "They should know that the problem is not with them, but with a system that has treated them like a commodity that can be discarded."

Catherine Rampell at the New York Times: The Multinational Equation on Jobs - "The most recent Bureau of Economic Analysis data available on multinational companies’ employment in the United States is for 2011 [and] data shows that the total number of people working for American affiliates of foreign companies rose 3.3 percent that year, up to 5.6 million workers from 5.4 million in 2010. That rate of increase was higher than that for total American private industry employment that year, which was 1.8 percent."

Can you imagine how good OUR economy would have been if American companies such as Nike and Microsoft (who employee over 2 million people overseas) had built factories in the USA and hired American workers instead? (not mention the corporate taxes our treasury would have had).

From the Wall Street Journal: U.S. Jobless Claims Underscore Uneven Recovery - "The number of American workers seeking new unemployment benefits rose slightly last week, a sign that the labor market's recovery remains fitful."

We can't get Congress to initiate a jobs bill or reform the tax code, and politics is destroying the economy. Charles Blow at the New York Times: Carving Up the Country --- "Our 50 states seem to be united in name only. In fact, we seem to be increasingly becoming two countries under one flag...Liberal Land (coastal, urban and multicultural) and Conservative Country (Southern and Western, rural and racially homogeneous). The other parts of the country are a bit of a mixed bag. This has led to incredible and disturbing concentrations of power. More than two-thirds of the states are now under single-party control, meaning that one party has control of the governor’s office and has majorities in both legislative chambers. This is the highest level of such control since 1952. And Republicans have single-party control in nearly twice as many states as Democrats. The cleaving of this country is becoming an incontrovertible fact, as we drift back toward bifurcation."

Tuesday, July 23, 2013

Food Stamps for Profits

Walmart, which pays its workers an average wage of $8.81 an hour, recently gathered a few headlines when it threatened to cancel construction on three stores in Washington D.C. after the city council wanted to force them to pay a living wage of $12.50 an hour (although earlier this year, Walmart claimed in a letter to Ralph Nader that $12.67 an hour was already the average wage they paid their employees.)

As of last year, the average wage for a McDonald's worker was $7.65 an hour, and they would have had to work 550 years to earn the CEO's pay.

New York Times: "Wage trends in fast food are not simply a result of impersonal market forces. Corporate policy matters. According to Bloomberg News, the disparity between the pay of McDonald’s fast-food workers and its chief executive officer has doubled in the last 10 years, while the company lobbied against minimum wage increases and discouraged unionization. According to a recent Gallup Poll, more than two-thirds of Americans support an increase in the minimum wage, and some restaurant owners are also on board."

McDonald's and Walmart both push their workers onto public services and food stamps.

Congress is currently debating cutting food stamps in the farm bill. Paul Ryan's budget would cut $33 billion over 10 years. Yet there are Republicans in Congress who get huge farm subsidies, but who also voted to slash food stamps in the current farm bill. 14 Republicans have gotten a combined $7.2 million in farm subsidies since 2004, but voted to cut the Supplemental Nutrition Assistance Program (SNAP) to the bone; but only one of those 14 then voted against the version of the bill that would have removed SNAP entirely.

One example of GOP hypocrisy would be Tennessee Rep. Stephen Fincher, who's received $3.5 million in subsidies over the years; but he's on a biblical crusade against SNAP, a program that 22 percent of the people in his home county rely on.

For the GOP, the theory has always been that government programs such food stamps (as well as unemployment and disability compensation) discourages work. Sean Hannity at Fox News likes to ask the question of whether Americans are "better off on food stamps" or "better off with a job". The ideological spin and mean-spirited rhetoric by the conservative media, think tanks and bloggers, as well as most Republican politicians, is that food stamps (SNAP) is just anther welfare program for lazy Americans who don't want to work.

But 47% of SNAP participants are under the age of 18 years old, another 8% are over the age of 60, and 36% were white (non-Hispanic) --- the largest group. But 58% of all SNAP recipients lived in a households with earnings from a job. Increasingly, the faces of people  getting food stamps are in a working-poor family --- and not just the unemployed or those on TANF (traditional welfare).

The profile of food stamp recipients has changed in the last decade. The number of households that have earnings while also participating in SNAP has more than tripled from about 2 million in 2000 to about 6.4 million in 2011 --- when a slew of good-paying jobs were being offshored to foreign countries overseas. Data shows a loss of 56,190 factories between the first quarter of 2001 until the end of 2010.

Coincidently, that was right about the same time when the banks were deregulated (1999) and the capital gains tax for billionaires was lowered to a mere 15% by the Bush tax cuts (2003) and when the stock market crashed (2008) as 8.7 million Americans lost jobs (2008/2009) --- all these event cumulating into the perfect storm. It's no wonder that so many Americans now need help to eat.

But what's not usually told is who primarily benefits from food stamps: Marion Nestle on the business of food stamps: “Here’s where the profits come in." Among the beneficiaries, there are the food producers such as Cargill, PepsiCo, Coca-Cola and Kraft, as well as retailers like Wal-Mart.

Consider the irony of companies like Walmart helping its employees apply for food stamps, and then profiting from their food stamp dollars. That's not public welfare, that's corporate welfare.

But this food stamp-corporate welfare model goes all the way to Wall Street, and is led by JPMorgan Chase, which administers the SNAP benefits in 24 states. JPMorgan's segment that makes food stamp debit cards made $5.47 billion in 2010. These banks who helped gut the American economy, and then were "bailed out" by the American taxpayers, are now profiting off the misery of the working-poor at the expense of the American taxpayers again. So it's not just companies such as McDonald's, Nestle, JP Morgan and Walmart who profit from food stamps.

And all these major U.S. corporations who profit from the managing and selling of products for food stamp money, also benefit in a much more important way: social stability. All those millions of working-poor Americans have continued to work for increasingly depressed poverty wages, but only for so long as they aren't hungry. But civility ends and social unrest begins when people can't feed themselves anymore, because then, hungry people will have nothing else lose.

Stephen Colbert on the great food stamp debate.

Disability Awards Plummet - Social Security (SSDI)

No, Social Security disability awards didn't plummet --- but they haven't skyrocketed either.

Robert Oak, who owns the website Economic Populist, has determined that the number of people receiving disability compensation (SSDI) has been steadily increasing as a percentage of the population since 1960 (since the program was first initiated). And in the aftermath of the Great Recession, he saw no sudden jump in the disability numbers, despite the many conflicting claims. "We see that growth rates did not suddenly explode in 2008 and 2009, but are much more a reflection of the general trend in more of the population receiving disability benefits overall.1"

This was exactly what I had always suspected, but I didn't have any way of proving the others wrong. I had always assumed that "claims" for disability might have went up after the recession, but saw that the actual "awards" were relatively on par from previous years. That's why I spent so much time and effort reading all the reports and trying to find inconsistencies in their claims (and trying to comprehend the economic jargon, the numbers, and graphs).

In my gut, I just couldn't believe that millions of people were suddenly leaving their jobs just to go on the government dole (like Bill O'Reilly and John Stossel have indicated several times on Fox News)

When I last worked in 2008, I was earning about $33, 280 a year in wages ($16 an hour) plus an average of $100 a day in tips (with healthcare and dental benefits, as well as vacation pay) as a union casino bartender in Las Vegas. I wouldn't have left that job in the hope that I MIGHT eventually qualify for SSDI benefits one day. And why would I leave a job I liked for SSDI benefits that only pays $13,560 a year? (The average SSDI benefit is $1,130 a month). And why would I then forgo NO INCOME AT ALL for 2 or 3 years while pursuing a disability claim, only to go through several appeals processes? It just didn't any make sense at all to me.

But I could understand why people would apply for SSDI (or Medicaid or SSI or TANF or SNAP) after their unemployment benefits ran out and they couldn't find any other work (and why SSDI applications might have risen in the aftermath of the last recession) --- because after all, people just want to "live".

In a CBO report they say that many people who receive SSDI only do so because they couldn't find work, but that they would prefer a job (and that SSDI "claims" for disability usually rise during recessions). I myself would prefer to work, even if the wages were less than what I was making before I was laid off (but more than SSDI). I would always prefer a job. Based on a 40-hour work week, the average monthly SSDI monthly payment equates to a job paying 6.52 an hour ($1,130 a month) give or take, depending on how FICA and federal taxes are calculated (In places like NYC, I think they also pay state and city taxes too.)

Most people prefer going to a job because it gives them some sense of identity and a purpose. It also breaks up a rather dull routine of watching TV all day long. And even if you don't particularly like your job or don't get along well with your boss, it's much better than sitting at home all day with no money at all. I know from personal experience, so I can tell you, that it's almost like being under house arrest --- because without cash, you're not financially free to do anything (or financially trapped to do nothing). You're stuck. Especially if you can't keep up with car payments or auto insurance, and can't afford gas --- then you're really stuck without a car.

People receiving SSDI or unemployment benefits don't usually have the extra discretionary income to make their jobless time a "vacation". They can't occupy all their spare time with other activities (like traveling or drinking at a bar) because they don't have the money to do so. It's "math". After rent and everything else, how far can $1,130 a month realistically go towards living expenses?

And especially if you are a single person living alone (like I was) who had no family members or a spouse to rely on, or to help out with expenses. Like I said before --- people just want to "live" (as with food and shelter). And if you're older (and also have a disability), and if you can't find work, and if you're denied SSDI, then you are very much SOL (like I almost was).

That may be why suicide rates have skyrocketed 30% for Baby Boomers. Last January 2011, I once thought I might be of those statistics, because I knew I couldn't survive very long as a homeless man, going through a slow and miserable death on the streets.

Millions of Americans are working part-time when preferring full-time work. Nearly 12 million Americans remain unemployed. At least 4.4 million Americans have been unemployed for more than six months. These Americans have not only lost unemployment benefits, they've drained their retirement and savings accounts in order to pay for food, clothing and shelter for themselves and/or their families. Laziness has nothing to do with their predicament. It was the man-made crash of the economy that did this to them (they are economic victims, not government-subsidy predators). Empirical research has shown that employers simply do not want to hire people who been out of work for a long period of time.

And millions more are underemployed or have given up looking for work altogether because there aren't near enough job openings. At the current rate of job creation, some say it will take at least eight more years to get back to pre-recession levels. These statistics --- which have been regarded by many economists as a national crisis --- have become the new normal.

So if a small percentage of the population can be saved with SSDI, why not? Just start taxing capital gains income (the income that CEOs earn from their stock options every year) for Social Security and eliminate the $113,700 cap for Social Security payroll taxes to help make the Social Security Trust Fund more solvent --- especially when people's lives depend on it.

And no, Social Security Disability Insurance (SSDI) is not a hammock, it's life support.

"We don't want to turn the safety net into a hammock that lulls able-bodied people to lives of dependency." - Paul Ryan

Data from Robert Oak:

More relevant is how those receiving disability payments has grown relative to the growth in overall population. Below is a graph of all persons receiving either SSDI, SSI or both as a ratio of United States total population including the armed forced from 1960 until 2011, the last year of annual data. What we see is an increase in this ratio, which means there are more people receiving disability benefits as a ratio to population. If the below line was flat, we would see the same percentage of people receiving disability as a segment of the population.

Another element to examine in the above graph is the rate of change of this ratio. Is it really soaring as some claim? It is not. The below graph is the percentage change of the above ratio each year. As we can see the amount of people as a ratio to the population has been steadily increasing, but less so in recent years than say 1961 and even 1992. Now this graph does include all peoples, that is children as well as those over the age of 65.

There is also in increase by ratios in those receiving disability benefits who are of prime working ages, 18 to 64. Below is a graph of all, that's workers, widowers and adult children, receiving either SSDI, SSI or both as a percentage of the population that at that time was between the ages of 18 to 64. We go back only to 2000 due to the lack of backwards Census adjusted population data by age.

Now the graph clearly shows a growth in working age people on disability as a percentage of the age 18 to 64 population. The above is all disability, SSDI, SSI or beneficiaries receiving both. The next graph shows just those receiving SSDI, this includes workers, widows and adult children of beneficiaries. Here too we see an increase, even as a ratio of population ages 18 to 64.

Yet when we look at the rate of change of either all disability recipients as a ratio to ages 18 to 64 population growth or SSDI alone, ages 18 to 64 as a ratio of that age group population, we see that growth rates did not suddenly explode in 2008 and 2009, but are much more a reflection of the general trend in more of the population receiving disability benefits overall.

Monday, July 22, 2013

The War on Disabled Americans

Lies, damn, lies, and statistics --- the mainstream media and most bloggers refuse to (or are unable to) to get the numbers correct on Social Security disability. It's no wonder they are all saying different things, and why many of us (including myself) were so confused about the accuracy of SSDI statistics. There also appears to be a lot of ideological spin in everyone's reporting --- so I'd like to help clarify a few things.

--- The Basic Facts ---

* According to the Social Security Administration, as of June 2013, there were 8,892,515 disabled workers in the U.S. who received SSDI benefits and averaged $1,130.34 a month (Source: SSA - Go here and select "disabled worker"). Here and here SSA reports $1,129.44 a month (Close enough for government work).

* According to the Bureau of Labor Statistics, the unemployment rate for persons with a disability declined from 2011 to 2012. The unemployment rate for persons with a disability was 13.4 percent in 2012.

* According to the Social Security Administration, actual SSDI awards (not claims or applications) declined from 2011 to 2012, and SSDI terminations were up, for a net increase of 2.94% for people in current payment status for SSDI benefits.

That's all there is to it --- no spin and no conflicting data --- but if you need to know more, then read on.

I've noticed that many people, while writing on the subject of disability, inflate the numbers for "disabled workers" in the SSDI program by adding disabled children, blind adults and other dependents; or by also including those that are in the SSI program for the disabled, poor and/or elderly. I suppose they do this to either exaggerate the figures to make an argument, or because they don't know the difference.

SSDI (Social Security Disability Insurance) is an earned benefit that is funded by Social Security taxes paid for by workers with FICA taxes. Benefits are paid to people with physical and mental impairments that are severe enough to prevent them from working. These benefits are based on a person's work record, the same as regular retirement benefits. People in this program, because they were already part of the work force, tend to affect the labor-participation rate, more so than someone in the SSI program.

SSI (Supplemental Security Income) pays an unearned benefit to low-income people who are 65 or older and/or to adults who are disabled (based on the same definition used by SSDI). This program is only for people who have very limited income and assets. SSI is financed by general revenues that the Treasury Department collects to run the U.S. government. SSI benefits have never been tied to a person's work record. SSI pays an eligible individual an average of $527.22 a month. (The maximum amount is $710)

--- In the Media ---

In the media reports I refer to below, you might notice that some people will calculate an average for specific periods of time. They do this for no other reason than to make an exaggerated and/or sensational argument. But these numbers don't tell the whole story --- it's somewhat like the difference between a "median" hourly wage and an "average" annual salary. The numbers will be vastly different. Remember, anyone can go back to a certain period of time in history on any subject and then say "it doubled" or "it went up 100%". But even when the media or bloggers do this, they STILL exaggerate the number as you will see. And they don't just round off the integers to the nearest million (or the nearest percent), but by wide margins, and always higher, never lower.

I've listed some examples below. For instance, the NPR has consistently reported in several articles that the number of people on disability (SSDI) is 14 million. If I were to report an accurate and true number --- and round it off --- instead of saying 8,892,515 disabled workers, I would say 8.9 million.

I've also noticed that when counter-arguments are made supporting the disability program, they are buried deep in the article, or very little is mentioned, or it's excluded entirely (this is where ideological slants are infused into the reporting, beside just skewing the actual numbers).

On the Mercury's website there's an article by Eric Boehm for the PA Independent (which was reposted, edited, taken out of context, and paraphrased) on several other websites. The Mercury reported that "Tad DeHaven, a research associate with the Cato Institute, a libertarian think tank, examines government programs for a living, but he said he’s never seen one as ill-defined and exploited as the Social Security disability trust fund. Nationally, the number of disability beneficiaries rose by 39 percent between 2003 and 2011."

NOTE: First, consider the source: a libertarian think tank. Just as Fox News and other conservative news outlets will report on any government entitlement program. According to the Social Security Administration (select disabled worker for all years), by the end of 2003 there were 5,873,673 disabled workers receiving SSDI when the civilian labor force was146,729,000. By the end of 2011 there were 8,576,067 disabled Americans receiving SSDI when the civilian labor force was 153,945,000 --- a difference of 2,702,394 receiving SSDI benefits over those 11 years --- or a 31.5 percent increase...not a 39 percent increase. By comparison, when President Obama first took office there were 7,427,203 people on SSDI --- and as of June 2013, there were 8,892,515 people on SSDI --- for a difference of 1,465,312 over those 4 years --- or a 16.5 percent increase.

The Mercury also reported that DeHaven says it is because "Congress has expanded eligibility to the point that Social Security disability has been turned into a back-door welfare program." (He may have been able to make that argument for SSI, but not for SSDI. It's ideology, that's all.)

Only later in the article does the Mercury say that a disability attorney named W. Daniel Feehan (from the law firm of Lowenthal and Abrams) does not see the [SSDI] program as an open-ended welfare scheme like DeHaven does. “Under the social security disability program, people are getting money they are entitled to that has been taken out of their paychecks over the years,” he said. “It’s disingenuous to call it a hand-out.”

On another website (the Altoona Mirror), also using content from Eric Boehm's article, quoted the same attorney as saying, "On top of evidence of a disabling medical condition, qualification for benefits are also based on age, education level and work history. That means older workers with low levels of education and long careers in physically demanding jobs are more likely to qualify."

That is a very relevant point that wasn't mentioned on the Mercury's website. But the Altoona Mirror also reported that W. Daniel Feehan had also said that there has seen an "uptick" in the number of younger workers seeking benefits. Although, if not accident-related, or because other serious illnesses or injuries, most are older workers who have worked in labor intensive jobs for many years. The Bureau of Labor Statistics says, "workers with a disability were more likely than those with no disability to work in production, transportation, and materials moving occupations" and that "those with a disability were less likely than those with no disability to work in management, professional, and related occupations."

Just compare working at a desk job shuffling paperwork for 30 or 40 years to being on your feet all day long lifting heavy objects. Evidence suggests that the Great Pyramids of Egypt were not built by slaves, but by paid laborers, and skeletons of workers commonly showed signs of arthritis and other ailments.

The Altoona Mirror went on to say, "Other research also shows the aging population is not entirely -- or even primarily -- responsible for the growth in disability benefits. The aging of the U.S. population accounts for only 13 percent of the growth in disability payments to men, and only 4 percent of the growth in payments to women -- that, according to Mark Duggan and Scott Imberman in a 2010 study for the National Bureau for Economic Research."

NOTE: I'll leave this to someone more knowledgeable to examine this study and to draw their own conclusions...and maybe leave a comment. As an older worker who has worked labor intensive jobs all their life, my own personal experience and opinion might not be objective in relation to this study. But I certainly wouldn't trust the Altoona Mirror's evaluation of this study. Many people tend to cheery-pick the facts that best supports their own argument.)

In an earlier post I wrote for the Economic Populist, I contended that SSDI "awards" for disabled workers has only incrementally (and exponentially) increased over the years in relation to the rise in population, the number of people in the labor force, and the demographics (aging, etc) of the civilian population. A Congressional Budget Office study shows that during all recessions, there is always spikes in "claims", but the number of both actual awards and claims have decreased from 2011 to 2012 -- and terminations also increased during that same period of time....meaning, they no longer were receiving a SSDI check from the government (Links to all the Social Security sources are also included in my other post.)

The Altoona Mirror then goes on to say, "Of the 56 million people who receive Social Security benefits, about 70 percent are retired workers or their spouses and children, and another 11 percent are survivors of deceased workers. The remaining 19 percent of beneficiaries --- more than 10.6 million Americans in 2012 --- are disabled workers or their spouses and children."

NOTE: A total of 55,404,480 as of 2011 received some form of SS benefits: 44,790,082 were retired + 10,614,398 were disabled and/or dependents. Which means, 80.8 percent were retired workers, not 70 percent. Now it's higher. Here at SSA it shows that as of May 2013, there were 57,457,000 out of a total of 62,576,000 who received some form of Social Security benefits (which also includes those receiving Supplemental Security Income).

The website Daily Local News (also with the tagline by Eric Boehm) reports, "Nationally, the number of recipients getting disability payments through Social Security has more than tripled since 1970, according to the Congressional Budget Office. But the increases have been sharper in recent years."

NOTE: Sharper than "tripled"? I have no idea how they came up with "tripled". And why did they use the year 1970? Why not 1960, when SSDI was first initiated? According to the Social Security Administration (select disabled worker for all years), by the end of 1970 (almost 43 years ago) there were 1,493,316 SSDI beneficiaries. As of last month (June 2013) there were 8,892,515 --- a net gain of 7,399,199 --- for an average of 172,074 a year over 43 years. But...

As of July 1970 the U.S. population was 205,052,174 and the civilian labor force was 82,901,000. Now the current population is 316,297,761 (up 35.2 percent in 43 years) and the current labor force is now 155,835,000 --- up 46.8 percent over the last 43 years (but who's counting?) Also --- today I am 61.1 percent older than I was in 1970. So what is the relevance in reporting that last statistic? There is no relevance.

I'll have to give credit to CBS, who appeared to be far more forthright and more detailed in their reporting. They just recently reported, "Claims for benefits have increased by 25 percent since 2007, pushing the fund that supports the disability program to the brink of insolvency, which could mean reduced benefits. Social Security officials say the primary driver of the increase is demographic, mainly a surge in baby boomers who are more prone to disability as they age, but are not quite old enough to qualify for retirement benefits."

NOTE: According to the Social Security Administration, prior to the Great Recession there were 2,190,196 claims (not awards) for SSDI in 2007. Last year there were 2,820,812 claims (applications) --- a difference of 630,616 --- or an increase of 22.4 percent. So CBS was a little high on this number, but notice how they rounded the number up to 25 percent, instead of down to 20 percent?

Then CBS also says, "The disability program has been swamped by benefit claims since the recession hit a few years ago. Last year, 3.2 million people applied for Social Security Disability or Supplemental Security Income."

NOTE: There were 2.8 million applicants for SSDI last year, so CBS must saying that there were also an addititional 400,000 applicants last year for SSI (Supplemental Security Income). By the end of 2008 there were 7,520,501 receiving SSI and by the end of 2012 there were 8,262,877 --- for a net increase over those 4 years of 742,376 (or almost a 9 percent increase in actual beneficiaries, not the number of people who just applied.) The average monthly benefit for SSI was $527.22 a month.

ALSO NOTE: When CBS said "applied for", they refer to claims or applications, and don't mention that the actual SSDI awards went down from 1,025,003 in 2011 to 979,973 in 2012 (down 4.39%) and SSDI terminations were up from 656,902 in 2011 to 726,432 in 2012 (up 10.58%) for a net increase of 2.94% for people in current payment status for SSDI benefits. (This would be called "and exclusion of all the facts" by CBS.)

CBS also reported that in a March 11 letter, three senior Republicans on the House committee (including Rep. Darrell Issa of California) wrote, "Federal disability claims are often paid to individuals who are not legally entitled to receive them." So, should anyone be surprised that the GOP is attacking a New Deal program for the poor, the elderly or disabled? (I wasn't.)

Social Security spokesman Mark Hinkle said the agency follows the strict legal definition of disability when awarding benefits. In order to qualify, a person is supposed to have a disability that prevents him from working and is expected to last at least a year or result in death. Hinkle said, "Even with this very strict standard, there has been growth in the disability program, and the primary reason for this growth is demographics." (I will assume it meant an aging population.)

He also noted that approval rates (awards) have declined as applications (claims) for benefits have increased." But, as I showed earlier in my post (using SS data), claims also decreased last year from the year before --- so I'm not sure if Mark Hinkle was quoted incorrectly by CBS on this particular point, or if Hinkle had misspoken, or if he had been referring to the previous year. But I'm not going to split hairs here ;)

CBS also reports that "nearly 11 million disabled workers, spouses and children get Social Security disability benefits." That is correct, but remember, the CBS report is also including spouses and children, and not JUST disabled workers --- and many of those people would not normally be expected to be a part of the labor force, and so, wouldn't affect the unemployment rate --- even though they are still referred to as "not being in the labor force" if they are 16 years or older.

And speaking of the labor force: Macroeconomic Advisors posted an article "Where’s Labor Force Participation Heading?" (It's very top-heavy with economic jargon and numbers). In another article that very same day Binyamin Appelbaum at the New York Times wrote a piece titled; "Labor Force Participation Is Not Coming Back". In it he writes, "It [the Macroeconomic Advisors report] points to the growing popularity of federal disability benefits, a program many researchers say is functioning as a safety net for people who can’t find jobs – except that it tends to remove them from the workforce on a permanent basis."

In his article Appelbaum linked to another one of his articles (not to an objective outside source) titled: "The Rise of Disability" --- to reinforce his own argument where in it he says, "Independent experts, however, see substantial evidence that disability insurance increasingly serves as a safety net for people who cannot find jobs – people, that is, who might still have the ability to perform at least some kinds of work." Appelbaum doesn't say who these "independent experts" are, but earlier this year, in a new study by Jesse Rothstein (University of California, Berkeley and NBER) he found that there was "no indication that expiration of UI benefits causes DI applications." It should also be noted that some of these same people (the experts) were also saying the same thing about extended unemployment insurance benefits, that it caused unemployed, until another study shot down that theory as well.

As an aside: according to yet another study, just by being unemployed (especially in this economy) causes unemployment. "Results strongly suggest that long-term unemployment is at least partly self-fulfilling. Imagine a newly unemployed worker who narrowly misses out on the first job he applies for. That initial failure reduces his odds of landing the second job he applies for, and so on, until he ends up as one of the long-term unemployed. Someone who has been unemployed for several years has a 4% chance of a call-back."

And here is where some people get confused: CBS reported that "an additional 8.3 million people get Supplemental Security Income, a separately funded disability program for low-income people." This is also correct (Source: SSA). But most of those people on SSI haven't been regularly working and paying Social Security payroll taxes, and were also either children, already poor, and/or elderly --- which shouldn't be affecting the labor force participation rate (and driving up the unemployment rate).

The Huffington Post wrote in August 2011, "Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can't find new ones in an economy that has shed nearly 7 million jobs...and..."claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can't find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That's 700,000 more than in 2008 and 1 million more than a decade ago.

NOTE: According to SSA, in August 2011 (when the Huffington Post article was written) there were 8,467,348 people on SSDI. In August of 2001 there were 5,173,654. So in that "decade" they mentioned, there was a net increase of 3,293,694 --- or up by 38.9 percent, not 50 percent. (See what I mean about rounding off numbers, and rounding them up? It's a shame when we can't rely on the media to report clear and concise numbers, without interjecting a hidden agenda. And from the Huffington Post no less!)

ALSO NOTE: According to the Center on Budget and Policy Priorities, 8.7 million jobs were already lost between the start of the recession in December of 2007 and June of 2009. Also, according to the Bureau of Labor Statistics, as of 2011, 8.1 million American workers were "job losers". But the Huffington Post said the economy had shed nearly 7 million jobs ("Nearly" the Huffington Post reported --- as not even 7 million. Here it seems that rounding down that number better fit into the author's agenda.)

AND ALSO NOTE: The Huffington Post said in 2011 that 3.3 million people were expected to apply for SSDI. That year 2.9 million had applied, but less than half (1.02 million) were actually awarded SSDI benefits.

Fox News has also continued to wage their war on disabled Americans by posting a video on their website titled "Social Security Disability Insurance: A Ticking Time Bomb?" --- Cato Institute's Michael Tanner talks about the rising number of people on Social Security Disability Insurance (SSDI). Again, consider the source. Remember, as I noted before: Cato is a libertarian think tank. They have an agenda. But I wanted to include this tid-bit in my post to be "fair and balanced". (The Republicans also want to repeal Obamacare because it adds a 3.8 percent surtax to the capital gains tax on unearned investment income for all the multi-billionaires on the Forbes Fortune 400 List.)

WatchDog.Org also carried the story by Eric Boehm, but added, "According to the Bureau of Labor Statistics, in 1968 there were about 51 full-time workers for each worker collecting disability. By April 2013, there were only 13 Americans working full time for each worker on disability" --- referring to an article in TheNewAmerican.

NOTE: This same argument has also used for the number of workers for each person receiving regular Social Security retirement benefits. That's why in my other post I made the case that we should lift the $113,500 cap on Social Security taxes and support Senator Tom Harkin's bill The Strengthening Social Security Act of 2013 so that payroll taxes apply fairly to every dollar of wages. For example: Warren Buffett and Bill Gates don't pay any Social Security taxes on their capital gains, the vast majority of their income. But the Republicans and many Democrats don't think they should pay this tax on their unearned "investment income" --- as though, we are supposed to be in awe of their "investment income" as opposed to our regular earned income (such as hourly wages, of which many middle-class workers pay a higher tax rate than the wealthiest individuals in this country.)

The most compelling argument against SSDI is from TheNewAmerican (cited below) who seem to believe that if people get arthritis in their back (or are mentally ill) and can no longer work, they shouldn't be entitled to SSDI benefits. Before1984, when Congress unanimously passed the Social Security Disability Benefits Reform Act [SSDBRA], all those people were once SOL. Should we rescind SNAP and TANF for the poor as well? Should we rescind Medicare and Social Security retirement for the elderly too? What about unemployment benefits for those who get laid off? What about oil and farm subsidies, and all the other corporate welfare (such as no-bid government contractors in the defense industry) that taxpayers have pay for?

From TheNewAmerican:

CNS News writes that the last time the number of Americans collecting disability decreased was in January 1997. But in 1997, that decrease was a miniscule one of just 249 people. CNS explains that in December 1968, 1,295,428 American workers collected disability and, according to the Bureau of Labor Statistics, 65,630,000 worked full-time. Thus, there were about 51 full-time workers for each worker collecting disability.

In April 2013, with a record 8,865,586 American workers collecting disability and 116,053,000 working full-time, there were only 13 Americans working full-time for each worker on disability.

Data collected by Mark Duggan and Scott Imberman of the National Bureau of Economic Research support the fact that the loosening of the definition of "disability" has been the cause of the increase in the number of "disabled," not more Baby Boomers retiring. The two men published a 43-page paper revealing that just 13 percent of the growth in the receipt of disability benefits in men was a result of aging, and just four percent in women.

Figures from the Center for American Progress and the Brookings Institution show that while the SSDI awards for traditional causes of disability, such as cancer, strokes, and heart attacks, have remained constant from 1981 to 2009, Social Security benefits have exploded dramatically for those with musculoskeletal and mental disorders between those same years.

An investigative report by National Public Radio revealed that many more recipients today are collecting disability for subjective conditions than were 50 years ago:

"As far as the federal government is concerned, you’re disabled if you have a medical condition that makes it impossible to work. In practice, it’s a judgment call made in doctors’ offices and courtrooms around the country. The health problems where there is more latitude for judgment — back pain, mental illness — are among the fastest growing causes of disability."

NOTE: TheNewAmerican called the National Public Radio (NPR) bias an "investigative report". Someone may call this post a "comprehensive study". I mentioned the NPR in my other post about SSDI. At the Daily Kos Jennifer Kates wrote a couple of in-depth articles about the NPR's war on the disabled --- about Social Security disability and the politics behind it.

ALSO NOTE: The Bureau of Labor Statistics reports that the employment-population ratio for persons with a disability was unchanged from 2011 to 2012, while the ratio for persons without a disability increased.

TheNewAmerican also said that the number of number of Americans collecting disability payments is at "an all-time high" (10,962,532) and that it equaled the total number of people living in Greece. But if TheNewAmerican were counting JUST "disabled workers" (and not sick children or blind adults) it would be 8,892,515 --- about the population of New York City --- or the number of people who lost jobs during the Great Recession.

Besides, what would all these people propose we do, just stop compensating disabled American workers and push them all into the street?

And when I say "The Last Word on Social Security Disability", I meant that it's the last time that I'll ever try to explain SSDI to the major news media. If they continue to misreport on this subject, then it only reinforces my belief that they have their own corporate agenda.


Data on SSDI receipts and expenditures

Disabled worker beneficiary statistics (SSDI Application, awards, terminations, etc.)

Number of Primary Beneficiaries By Age and Sex

SSI Monthly Statistics, May 2013 (Supplemental Security Income)

Population in the Social Security Area

This PDF is a selection from a published volume from the National Bureau of Economic Research