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Fewer Americans are working–or even looking for work. Why?

Conservative critics of the disability benefits system argue that it gives people an incentive not to find jobs.
/ Source: All In

Conservative critics of the disability benefits system argue that it gives people an incentive not to find jobs.

Labor force participation rates continued their steady, post-recession plunge in this month’s job numbers from the Bureau of Labor Statistics. The labor participation rate, which describes the number of Americans who are either working or looking for work, “fell to 63.3%, its lowest level since the ‘malaise’ of the late 1970s,” according to MSNBC.

In other words, a remarkable number of Americans are not only unemployed, but are also declining to seek new employment. That includes a striking number of 18-24 year olds, according to a new report from Demos called “Stuck: Young America’s Persistent Jobs Crisis.” According to the report, Americans in that age group had lower participation rates than 25-34 year olds or 35-64 year olds across the educational spectrum.

“If young people participated in the labor force today at the same rates they did in 2007, there would be 2.18 million additional 18 to 34-year-olds in the workforce,” write the report’s authors.

But what’s to blame for dwindling labor participation rates? Recently, a handful of conservative commentators such as Fox News’ Chris Stirewalt and the National Review’sJonah Goldberg have cited disability benefits for people who could be working if they hadn’t become accustomed to relying on checks from the government.

The source of this line of argument may be a recent Planet Money feature by NPR’s Chana Joffe-Walt. In “Unfit for Work: The startling rise of disability in America,” Joffe-Walt writes that “an entire disability-industrial complex” exists to “[p]ush more people onto disability,” whether they’re actually fit to work or not. As a result, “the number of Americans who are on disability has skyrocketed.”

Catherine Ruetschlin, one of the authors of the Demos report, described disability benefits as a “red herring.”

“It’s not a problem with the disability program,” she said. “It’s a problem of there not being adequate jobs.” She said that people would naturally rely more on their disability benefits or other sources of income when the only jobs available were ones they would be physically unable to perform.

Disability policy expert Harold Pollack made the same point to the Washington Post’s Brad Plumer last week.

“If you have a bad back, and the only jobs available are manual labor, that’s a real limitation,” he said. “You’re unable to work. So it very much matters that we’re in a deep recession, and a lot of the opportunities people faced are limited.”

According to the Center on Budget and Policy Priorities, the growth in disability insurance beneficiaries has more to do with an aging population. There are other factors that could explain declining labor force participation. For example, “[d]ownward moves in labor-force participation can be attributed in part to increasing school enrollment” as more young people seek higher education, according to the Center for American Progress.

But the main factor is just “discouragement with the economy,” said Ruetschlin. “The idea that the benefits of going out and looking for a job in the market are far outweighed by the costs.”

Tune into MSNBC’s All in with Chris Hayes Friday night at 8 p.m. ET; Chris Hayes will discuss the shrinking  labor force and disability insurance.