There has been much gnashing of teeth over the recent NPR stories about disability insurance.  It is well worth the read.  This is an issue that I’m both glad people are starting to pay attention to and scared because people are starting to pay attention to it.

Here is how it goes for those of you just tuning in.  The economy of the United States has been progressively changing for 30 years now.  Manufacturing jobs are leaving and only partially being replaced by lower paying service jobs.  There are no jobs for these people.  They are poorly educated and, often, too old to get trained for a new economy job.  They got their unemployment checks for as long as they could and then went on welfare.

All of this was happening at a time when Republicans decided that people on welfare were a pox on the society that their wealthy masters helped create.  So, with the help of Bill Clinton, they passed a massive welfare reform law that was incredibly successful at reducing the number of people on welfare.  It’s main driver was forcing the states to carry a larger burden of the welfare pot.  Before, the federal government would pick up most of the tab.  Now, not so much.  The only problem is it didn’t reduce the welfare roles the way everyone thinks it did.  It was supposed to be a “back to work” bill, but many of the people on welfare were completely unemployable in the new economy.

States had an easy choice to make.  They could either continue to pay money for welfare or they could funnel as many people as possible onto disability insurance.  Disability insurance is 100% covered by the federal government.  Can you guess which one they chose?  Congratulations, you have basic reasoning skills.

So, millions of Americans lost their jobs, couldn’t find new ones, went on unemployment, went on welfare, and are now on permanent disability.  Many of these people have disabilities that most of us would laugh at.  The most common being chronic back pain.  Millions of other Americans work every day of their life with back pain, why don’t they get disability too?  Well, mostly because they can find a job that allows them to sit down.  There’s not much call for an employee with little education who needs to sit behind a desk all day.  There’s not much an employee with little education can do sitting behind a desk all day.  So onto disability they go.

Welcome to the new Invisible America.

As you can imagine, this system has all sorts of perverse outcomes.  Families now depend on that disability income in order to survive and it pays about minimum wage.  If you were given the choice between working a full time minimum wage job where you were constantly in pain or collecting disability, which would you choose?  It turns out that millions of Americans were more than willing to work through a good deal of pain working at a job that put them well into the middle class, but not so much when doing so puts you into the lower class.  Can you blame them?

Of course the $260,000,000,000 (that’s how much disability costs the government each year now) question is what to do with these people.  And this is where my trepidation begins.  I fear that calling attention to this issue will make it more likely to be welfare reform all over again.  Only this time, there will be no fallback.  The result being millions of unemployable people with no lifeline relegated to the streets.

At the same time, though, keeping so many people on disability is untenable.  The disability pot is currently scheduled to run out of money in 2016, right when Obama is leaving office.  Obviously, something needs to be done well before that.  But what?

I wish I had answers.  I don’t know enough about the needs of these Americans to comment intelligently.  That, of course, won’t stop me from commenting anyway.

This sounds like a great opportunity to start a massive retraining effort.  Instead of sending these people back to vocational training, though, we should really just send them back to regular school and pay them what they’re getting right now to go.  As long as they put in the effort to go to school, they get the money.  They could do this for the rest of their lives if they so choose.  Hopefully, though, they would progress to such a point that they could then get jobs that pay more than they are being given by the government.

Yes, this is very pie-in-the-sky.  But it’s something.  If we had come up with something along the lines of this instead of “welfare reform”, we’d likely be in a much better position than we find ourselves now.