A few weeks ago, I heard a story – Unfit For Work on This American Life and it’s quite startling. Do you know there are 14 million people currently on the disability program? People on disability are not counted in the unemployment rate because they are not part of the workforce. You can read more and listen to the story by following the link above. Here is a just a short recap.
- People on disability receive about $13,000 and healthcare coverage via Medicare.
- Medical conditions like back pain is a lot more disabling for laborers than office workers. Ethel Thomas would love an office job, but she can’t get one with her qualifications, so it’s better for her to get on the disability program. Her previous job was at a fish plant and she can’t do it anymore due to back pain.
- Once you get on the program, not many people leave. Only 1% of the people on the federal program for disabled workers at the beginning of 2011 have rejoined the workforce.
- Scott Birdsall lost his job when the local saw mill closed down. He went on unemployment, had a heart attack, and then went on disability. If the mill was still in business, he would go back to work instead of going on disability.
The story is quite interesting and I wonder how many people took this path to early retirement. Scott went through the retraining program when he was on unemployment and he hated going to school. He was 56 at the time and let’s face it, employers don’t want to hire an older worker nearing retirement.
Compare with minimum wage worker
Oregon’s minimum wage is $8.95 per hour. So a minimum wage worker can make around $18,500 per year. That’s about $5,500 more than the $13,000 you would get from disability. However, our minimum wage worker also has to pay for health insurance, transportation, wardrobe, and other job related costs. Working a minimum wage job is probably about on par with being on disability, but the big difference is the growth potential. If you are younger, you can get more education and try to get a better job to improve your situation. On the other hand, it seems once you get on disability, you’re signed up to be poor for the rest of your life.
Not for me
Back pain and other musculoskeletal problems is the biggest portion of the disability program at 33.8%. I have back and shoulder pain, too. I’m getting better now that I’m not hunched up in front of a computer for 10+ hours a day, but the pain is not completely gone. When I was listening to the program, I wondered if I could get on the disability program. I doubt it and I don’t want to be on the disability program anyway. We are doing alright financially and it wouldn’t feel right to take the disability check.
Anyway, if I get on the disability program, it probably means I’ll have to stop blogging. I made about $16,000 online in 2012 and that’s already more than the disability payment. I know if I put more effort into it, I can generate more income in the future. Once Baby RB40 goes off to school and I have more time, I would like to explore other business opportunities as well.
Disability should be reserved the truly disabled
Personally, I think the disability program should be reserved for people who really can’t work. The story made it sounds easy to get on the disability program and it should probably be a bit more difficult. Older blue collar workers like Scott are in a tough position, but I think they should try to work a few more years until they reach retirement age and social security kicks in. I guess it’s easy to judge when I’m young and can still make money in nontraditional ways. I really don’t know what I would do if I was in Scott’s position.
What would you do if you were a 56 year old laborer, had a heart attack, and couldn’t find a well paying job? Would you consider going on the disability program to retire early? After you have recovered from the setback, wouldn’t it be better to find a job rather than staying on disability until 62?
photo credit: jimbowen0306