The number of Americans receiving Social Security Disability Insurance (SSDI) more-than doubled over the past two decades, from 5.2 million to 11.7 million by the end of 2011.
The number of residents receiving disability insurance from the Social Security Administration (SSA) varies from state to state. In West Virginia, close to one in every 10 people aged 18 to 64 was receiving SSDI benefits from the federal government, more than three times the rate in states like Utah and Alaska.
The proportion of eligible workers applying for disability benefits also has doubled in the past 10 years, according to the SSA. Two main reasons are driving the increase, explains The National Association of Social Security Claimants’ Representatives. First, baby boomers are entering years in which they are more prone to disability. Second, women who began to work in greater numbers in the 1970s and 1980s are also now eligible for disability through Social Security for the first time.
However, changing demographics only partially explain the increase. Tad DeHaven, budget analyst at the Cato Institute, a libertarian think tank, explained that the recession played a major role in the growth in disability claims. “When you see unemployment rates rising, you see disability moving with it,” DeHaven noted.
In fact, states with the highest disability claims tend to have the highest poverty rates and the fewest jobs offering competitive wages. Seven of the 10 states with the most residents receiving disability have among the highest poverty rates in the country. The number of jobs in these states in manufacturing and retail, which tend to pay modest wages, are above the national average. Meanwhile, jobs in finance and professional occupations are scarce.
While it is true that disability claims rise when the economy is in trouble, disability claims also skew the unemployment rate. The vast majority of disability claimants do not work and are therefore not counted as part of the labor force, which the government uses to calculate unemployment. Of the 10 states with highest proportion of 18 to 64 year olds on Social Security disability, seven have among the lowest labor force participation rates in the country. Unemployment rates in these states, six of which are already above the national average, would be even higher if those on disability were counted.
In principle, the reason Americans apply for disability is because their health prevents them from working. A review of a recent Gallup-Healthways survey shows that nearly these states with the highest rates of disability are in the top 10 for serious conditions, including heart attacks, diabetes, hypertension and recurring knee, leg and back pain. West Virginia, the state with the highest disability rate, had either the highest or the second-highest rate in the country for all of these conditions.
Residents in these states find it hard to get a job that will pay much more than disability with their work experience, education and health condition, explained Gary Burtless, economist and senior fellow at the Brookings Institution. “In states like Alabama and West Virginia,” Burtless said, “lots of the workers are going to be in occupations where the next job they obtain — if they do stick it out and work through the pain and the disability — is one that is going to pay considerably less than the last job that they held.”
To determine the 10 states with the most residents getting disability benefits, 24/7 Wall St. relied on figures published by the Social Security Administration in its Annual Statistical Report on the Social Security Disability Insurance Program for December 2011, the most recent available data. We only considered the number of claimants and average payment from the SSA. Unlike SSA, Supplemental Security Income, another federal disability program, provides financial support to low-income residents, children and senior citizens, regardless of work history. Statistics on labor force participation and average annual unemployment rates were provided by the Bureau of Labor Statistics for 2011. Figures for the percentage of residents suffering from a specific disease or condition are from the Gallup-Healthways Well Being Index. Education, income and poverty statistics are from the U.S. Census Bureau.
These are the states with the most Americans on disability.