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Copying over a post from the ssc subreddit because I found it interesting. (Hope this is allowed.)
In the mid 2010s there was a crisis around social security disability. Things were so dire that estimates placed the DI reserves to run out by 2016.
And yet as we know, this didn't happen. Part of it was thanks to the Bipartisan Budget Act of 2015, which temporarily reallocated payroll tax revenues from the OAS fund to the DI trust fund but that was temporary and ran out in 2022. And as far as I can tell (and as far as my double checks with the chatbots can find), it wasn't extended.
And now with the upcoming social security crisis the DI reserves are the only part to not be facing any expected issues.
Another piece of the disability crisis, 14 million people were on disability in 2013 and the number was expected to keep rising and rising. And yet it didn't happen, the trend reversed and as of 2024, only around 7 million are on disability It was halved! Substantial drop! We're back to levels from two decades ago.
Why? How did things change so radically so fast?
Covid. I don't know how much of an impact Covid had, but it was disproportionately impacting the disabled both directly and indirectly (by using up hospital resources) and that likely lead to some deaths but it doesn't seem to be that much, we were already trending downwards before the pandemic. [Edit: See edit below, it's quite possible that Covid had a greater impact than I thought]
The social security admin changed up their policies a bit and got more pressure on appeal judges to make denials. This had an impact, but the changes to denial rates don't seem to be that drastic to explain a 50% drop. And since then that small trend downwards has actually reversed too, the overall final award rate of 2024 applications seems to be higher than the mid 2010s average.
I don't think those are the main reasons why it changed.
What do I propose was the main reason? The economy got stronger and the disabled got older.
You can see for yourself how disability applications correspond pretty heavily with the unemployment rate.
Unemployment has a selection bias, it mostly impacts the older, sicker and less educated. Those are people who in a good economy with low unemployment might be able to get jobs, but in a weaker economy they are too old and disabled to find something compared to their healthier younger peers.
You can see a huge surge in disability applications around the time of the great recession. These people were largely in their late 50s and early 60s, too young for early retirement but too old in the recession environment to compete well.
An NPR article from the time reveals this in an example of [in 2009] 56 year old Scott Birdsall and what an employee at a retraining center told him after a local mill closed down and the aging workers were left finding other jobs
A 56 year old in 2009 is what age in 2024? 71. They are past retirement age, and would have transitioned off of disability and onto normal retirement pay.
This is what I think solved a significant portion of the disability crisis. Overall disability in the late aughts and early 2010s was being used as a makeshift early retirement program for uneducated middle aged and senior workers who didn't yet quality for their benefits, but were functionally unemployable already in the post recession economy.
And while I came up with this idea for myself, during research I stumbled onto an analysis that suggests the same thing. Their analysis ended at 2019, where there was still roughly 9.8 million on the rolls, and found that about half the explanation is the business cycle/aging and half is ALJ retraining. The trend from 2019-2024 is likely explained in a similar way, and given the increased final award rates we've tended back towards, this is likely explained even more heavily by the aging explanation.
There are some factors that help support this explanation more. SSDI in general tends to go to older, poorer, more rural and sicker (at least given death rates are 2-6x higher than peers) individuals.
While this does not explain why the 2010s surge itself happened since those factors are relatively stable, it does explain why the surge was so temporary.
This also leads to an interesting question, what happens in the next period of high unemployment? How do we plan to address mass AI based layoffs if they occur?
Many people may be able to find a new job, but many won't and we will likely be facing a new disability crisis if it is forced to served as a early retirement program again.
Edit:
Thinking about it, one weirdness here is Covid unemployment which didn't seem to increase disability rates and in fact the trend downwards continued despite that. But we did see a huge surge in early retirement with about 2.6 million excess retirees. So maybe something changed in how early retirement works since? Or maybe Covid era unemployment mostly impacted younger healthier people or the jobs market for furloughed workers wasn't as bad. Or heck, maybe it's just coincidence that the downward trend was already happening and Covid really did have a major impact on the total number of beneficiaries.
My guess would be in the recovery, Covid unemployment surged higher but recovered really fast so we probably just didn't see as many Scott Birdsall situations.
Back to my thoughts, I'm extremely skeptical that the disability numbers could halve over such a relatively short period without some sort of accounting trickery. I could definitely see Covid having an impact, especially since the vast majority are older people. But the drop in numbers is just too great for me to take them at face value.
We've seen it before with disability, social security, etc, but often times the medicalized benefits system will just shuffle large amounts of people from one category to another once political pressure comes to bear on a label like "disability."
This also reminds me of the old post by Alone on how SSI is basically medicalizing political problems - can't seem to find it but if anyone knows what I'm talking about and has the link that would be great.
I happen to rather like that Alone post.
I think the original poster has it right, even by the lights of shuffling people from one program to another. What is SSDI to SSI if not a recategorizing of benefits?
The concept of "SSDI is just SSI, but targeted at a slightly younger and more blue-collar workforce" seems to be borne out by the second chart here (look at the small, pale blue bars). The numbers keep going up the closer you get to retirement age. In a somewhat more proper sense, this could be explained as: this is quite specifically the cohort you expect to get disabled, as they're manual workers who get old enough for all their little injuries to come back and bite them. Either way, not nearly as knee-jerk offensive as Alone's example, except in the sense that no matter how you decide who gets what, you're still creating a large class of people who are drawing on entitlements from the labor of unrelated others. But that's a far deeper topic.
The race-based charts just line up in the traditional poverty order. I dunno if there was ever any possibility of it being otherwise.
Yeah, Hale County Alabama having a working-age disability rate of 25% (It looks like that's dropped to 20% since that article was written.) sounds scandalous until you consider that it's mostly a dying rural area, the sort of place that doesn't even have a Walmart to be a greeter at. Especially in the crappy job market of the early 2010s, a fifty-something country bumpkin with no education and occupational experience limited to blue collar work that they're aged or injured out of is pretty close to unemployable anywhere within a reasonable commute of the area. Tuscaloosa is 30-60 minutes north depending on which side of the county you're in, and that's pretty much it. Good luck competing with a bunch of underemployed college graduates!
Nitpick and I know it wasn't your intent, but I have a hard eye for Walmart hate.
Your average Walmart does a little more that $1milion / week in sales. The average customer is a suburban woman making between $40-$80k per year. The average supercenter employs 300 people.
The trope of "lulz Walmart is for fucked up redneck towns" is categorically false. Walmart is an amazing, massive company. They were FAANG before FAANG was a thing, having picked up RDBMs for inventory management in the 1980s. They promote from within to an extreme degree. Walmart Labs, for data science and engineering, is as prestigious and as lucrative as a FAANG job currently. Their buyers are some of the best negotiators, marketers, and logisticians in the world. The conslutants (no, I spelled the right, go back and read it) from McKinsey etc. would give their left nut to get an in house job at Walmart - most don't.
And walmart sells what people want and need for ridiculous prices. In a modern consumer economy, it is the triumph of scale and American purchasing power. Walmart is why, how, and where we go to not only feel like but actually live better than 99.99% of all historic royalty in human history.
Amazon imports junks from all across the world. Google and Facebook make you the product by using surveillance capitalism to capture and re-sell your data. Walmart sells you a ridiculous TV for less than $500.
I suppose the better way to put it is that Walmart is the only hypermarket chain that is efficient enough to survive in mediocre redneck towns (A "fucked up redneck town" is one that doesn't have a Walmart.), so they wind up associated with them.
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Lucrative perhaps, but I dispute the claim about prestige. I've never even heard of Walmart Labs, whereas everyone in the industry knows of the FAANG companies and the high status that comes from working for one.
Ask your friends at Goldman Sachs about Allen and Company.
Sorry, I genuinely can't understand what your point is. I'm guessing because I don't work in finance so I'm missing a reference. Can you please clarify?
I was trying to draw a parallel between "those in the know" in the tech industry and the same in the finance industry.
People who work in data science and engineering know walmart labs. Great reputation. People who work in finance know Allen and company. Great reputation.
People who do not work in those industries have never heard of either Walmart Labs or Allen and Company.
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