As more jobless people run out of unemployment insurance, they are turning to a last resort to make ends meet: government disability benefits.
Two new studies cited by The Wall Street Journal find that when jobless Americans exhaust their unemployment benefits, they turn to Social Security disability benefits to survive. The number of Americans receiving Social Security disability benefits has risen to 10.6 million since 2002 -- an increase of 47 percent, the WSJ reports.
With more and more people coming to depend on Social Security, the program's long-term prospects are starting to seem endangered. Most people who start receiving disability insurance stay in the program until they retire, and the average person in the disability program ultimately receives more than $240,000 in benefits, according to a 2006 study by economists David Autor and Mark Duggan cited by the White House's Council of Economic Advisers.
More than 10 percent of Americans between the ages of 50 and 65 without access to $5,000 apply for Social Security disability benefits right after they run out of unemployment insurance, according to the White House's Council of Economic Advisers. By contrast, less than 1 percent apply for the disability program when they are still about 50 weeks away from exhausting their unemployment benefits. A November report by Boston College research economist Matthew Rutledge reached a similar conclusion, finding that jobless Americans are more likely to apply for disability benefits once they are about to run out of unemployment insurance.
Out-of-work Americans are now without jobs for longer than ever. The average duration of unemployment reached a record high of 40.9 weeks in November, according to the Bureau of Labor Statistics. And it's thought that cutting unemployment benefits doesn't only hurt the people receiving them. The United States would lose nearly 500,000 jobs by the end of 2014 if Congress does not continue the extension of unemployment insurance, according to the CEA.
News that jobless Americans are relying on more disability benefits arrives as Social Security is increasingly coming under attack. Texas governor Rick Perry called Social Security a "Ponzi scheme" at a Republican presidential debate, and Rep. Paul Ryan, who many consider an intellectual leader of the Republican party, has said he agrees.
Congress recently agreed to extend unemployment benefits and the payroll tax cut for two months, but as the battle has become more partisan, it is unclear whether House Republicans will agree to extend unemployment insurance for another year.