The silent yet steady substitution of unemployment benefits with federal disability insurance is well covered in an episode of This American Life [1]. We, as a country, have a shoddy system for re-training low-skills workers facing technological obsolescence. We have also set up a system under which unemployment benefits are largely a state liability. Disability, on the other hand, is federally funded. The intersection of these trends, as documented by This American Life, lands us in the curious situation of state governments encouraging their unemployed to seek disability benefits (thereby shifting their burden onto the federal budget).
In the short run, state unemployment and federal disability benefits have similar effects. Social stability is enhanced through buying off the poor. But long-term disability is not designed for the under-trained. Its means-testing paradigm discourages even the exploration of employment options which might jeopardise the applicant's disability status. Thus a one-way valve to dependency on the state's largesse.
In the short run, state unemployment and federal disability benefits have similar effects. Social stability is enhanced through buying off the poor. But long-term disability is not designed for the under-trained. Its means-testing paradigm discourages even the exploration of employment options which might jeopardise the applicant's disability status. Thus a one-way valve to dependency on the state's largesse.
[1] http://www.thisamericanlife.org/radio-archives/episode/490/t...