If You Really Want to Be Unequal, Be Disabled

By Karen Petrou and Matthew Shaw*

Like most who assess U.S. economic inequality, we’ve focused in this blog on the way income and wealth divide across Americans in general, by race, by age, by gender, by ethnicity, and even by nothing more than where one lives.  However, working on another pro bono initiative – this time to speed biomedical research – it’s dawned on us that there’s another major factor that divides the haves from the have-nots that’s even less the result of individual action than all these well-studied demographic criteria:  disability.

Although the new president of the Federal Reserve Bank of San Francisco, Mary Daley, has written a good deal about disability and employment, the field is remarkably untouched.  I suspect that this is because disability is the last stereotype to crumble. 

Years ago, economic inequality by race was considered a fact of life by those who believed Black Americans really weren’t up to sophisticated labor.  Pernicious, of course, but any read of the writings of supposed “moderates” such as Sen. Richard Russell in the 1950s about a “mongrel race” will attest to their prevalence in the halls of power.  The same stereotypical thinking of course applied to women, who were supposed to gain economic equality only by the labor of their father or husband.  We mostly know better now about race, gender, and much more.  However, disability is still understood mostly as an inevitable barrier to economic opportunity based on stereotypical assumptions that persons with disabilities are also incapable.

As any persons with a disability can tell you, the disabled are widely believed to be income- and wealth-disadvantaged because they cannot work.  Even if the disabled try to work, assumptions are that they can only do limited tasks that generally warrant only a stipend wage such as those long afforded in “sheltered workshop.”  These facilities do provide some gainful employment and a bit of independence, but it’s not exactly a get-ahead job making brooms or answering phones.  Most of the disabled can and should do better.

Some have also alleged that the disabled do not work because they receive Social Security Disability Insurance (SSDI).  However, those receiving SSDI are generally out of the labor-force participation numbers because they generally have to prove they can’t work to get SSDI.  A Council of Economic Advisers study debunks the myth that SSDI keeps men out of the labor force who could otherwise be put to work, finding that SSDI may have reduced prime-age male labor-participation rates over the past fifty years by no more than 0.10 percent.  Further, the majority of men receiving veterans’ disability compensation – another sometimes-said excuse – are in the workforce.  Interestingly, disabled vets seem to be in the workforce to a larger extent than non-disabled ones.

Remarkably, the studies above about SSDI and related benefits don’t look so much at disability as at why prime-age men are such a shrinking part of the work force.  An important point, but what about all the persons with disabilities who aren’t men, aren’t white, and are struggling at least as much?

What the limited data tell us is that:

• The unemployment rate for persons with a disability seeking work is 11.9% versus 4.8% for the rest of the population – or almost 250 percent higher as of year-end 2017. Although you might think this is due to age and infirmity, these data are for prime-age (i.e., 25-64), civilian, non-institutionalized individuals.
• Perhaps you think the data reflect persons with profound cognitive or physical disabilities. Maybe, but Americans with hearing impairment are unemployed at almost double the rate of the overall population.  Americans with vision disabilities have a 10 percent unemployment rate versus 4.8% for those without a disability and those with ambulatory impediments are almost three times more unemployed than the population as a whole.  Hearing-impaired individuals may not be ready or able to be audio engineers and blind people are unlikely to be airline pilots.  Still, is all this unemployment truly because they are too disabled for any form of employment?  We’re not talking rocket science here – these data capture a wide range of skilled and unskilled jobs for which persons with a disability are surely far better able to qualify than these data reflect.
• Persons with disabilities aren’t unemployed because they don’t want to work. Looking at what one might call a “true” unemployment rate, you see that considering the employment numbers against all working-age, civilian, non-institutionalized individuals and not just those considered to actively be in the labor force (i.e., those currently employed or who have looked for work in the last six months) shows that over 77 percent of Americans without a disability work; for persons with disabilities, it’s 37 percent.

We first explored disability and inequality in bringing H.R. 6421 to your attention.  This bill speeds treatments and cures for blindness and, if it works, crafts a new “Bio Bond” market across the spectrum of disease and disability.  We pointed out then that ameliorating disability would open economic opportunity; here, we prove it.

*  I am grateful for work relating to the research and data above to Matthew Shaw, FedFin research analyst, and Drake Palmer, our summer intern.