Jamie Dimon on labor force participatioin and disability
by New Deal democrat
Jamie Dimon on labor force participation and disability
First of all, sorry for the light posting this week. I’ve had some urgent business I need to attend to irl.
But I wanted to post this for future reference. Via Business Insider, this is from Jamie Dimon’s letter to stockholders:
If the work participation rate for this group [men ages 25-54] went back to just 93% – the current average for the other developed nations – approximately 10 million more people would be working in the United States. Some other highly disturbing facts include: Fifty-seven percent of these non-working males are on disability ….
I don’t know where he got the 57% statistic from, but if it is true it is potent evidence that the main factor behind the 60 year long decline in prime age labor force participation by men is an increase in those on disability, probably due to both the expansion of the program, and better longevity and diagnostics — and probably also tied in to opiate addiction as well.
cross posted with Bonddadd blog
Here is the source of the comment:
“By the way: Of the entire un-working prime-age male Anglo population in 2013, nearly three-fifths (57 percent) were reportedly collecting disability benefits from one or more government disability program in 2013. Disability checks and means-tested benefits cannot support a lavish lifestyle. But they can offer a permanent alternative to paid employment, and for growing numbers of American men, they do. The rise of these programs has coincided with the death of work for larger and larger numbers of American men not yet of retirement age. We cannot say that these programs caused the death of work for millions upon millions of younger men: What is incontrovertible, however, is that they have financed it—just as Medicaid inadvertently helped finance America’s immense and increasing appetite for opioids in our new century.” Our Miserable 21st Century Nicholas Eberstadt, Commentary Magazine, February 17, 2017
It is funny and sad coming from a person (Dimon) who helped put much of the Main Street labor on the street looking for work due to the crash of Wall Street. We were at 66% (true PR) in 2005.
Who is going to buy the output of 10 million men?
Welcome to AB tagyouerit….first comments go to moderation.
You already are buying their output.
I need much better info that seems to exist. Info where the math works would be nice
“2) Are they on disability?
This is another common explanation for the drop in male participation. But again it doesn’t explain more than a fraction of the phenomenon.
There’s not much doubt that Social Security Disability Insurance takes people out of the workforce, often by inelegant design. In order to qualify for disability payments, people typically have to prove that they cannot work full-time. SSDI critics say this policy sidelines many people who might otherwise be able to contribute to the economy.
But how many people does SSDI really remove? From 1967 to 2014, the share of prime-age men getting disability insurance rose from 1 percent to 3 percent. There is little chance that this increase is entirely the result of several million fraudulent attempts to get money without working. But even if it were, SSDI would still only explain about one-quarter of the decline in the male participation rate over that time. There are many good reasons to reform disability insurance. But it’s not the singular driving force behind the decline of working men.”
https://www.theatlantic.com/business/archive/2016/06/the-missing-men/488858/
i thought the 57% figure was far fetched when i first read it…but SSA appears to show over 14 million of us as “Disabled, under age 65” as of February:
https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/
I do not think you are reading Table 1 correctly.
SSI only is 4.5 million. Also, there is no “prime age” number there, and it seems certain to include those under 18.
Well, one driver of the reduction in LFPR of men might just be women.
If you go to BLS.GOV and look for series LNS11300061, you will see the LFPR for men ages 25-54. That peaked in 97.9% in September, 1954, and has been on a downward trajectory ever since.
Conversely, look at LNS11300062, the LFPR for WOMEN ages 25-54. That was growing steadily from 1948, the earliest data available on the BLS website, through to a plateau around 1997 through 2000, but has declined a bit since then.
I do not hold with the “lump of labor” fallacy, but it is also a fallacy that adding a given number of people to the labor force increases the number of jobs by the same amount. Immigrants displace native workers. Not one-for-one…. actually, yes, one-for-one in the moment of hire, but not over longer periods. But the aggregate displacement is real, whether one native displaced for every two immigrants or one for every three. Similarly, women’s entering the workforce displaced men. Again, not one-for-one, but there is still some displacement.
Warren,
The women did not displace the men. The number of men in jobs kept increasing. The number of women increased faster.
It is the difference between the dynamic process of economic growth and the comparison of two economic equilibrium points.
Adding a low wage worker does not add as much demand as adding a high wage worker. I suppose immigration and unequal pay are factors in the reduction of labor share, but more so is loss of worker negotiating power.
A not so comforting thought. Has some of the decline in unions come about because a conservative culture wants less union power in the hands of a workforce that has more women and more immigrants?
Arne,
Nah, that was just a bonus.
🙂
Arne, I would not get too far down the road of thinking about conservative culture and unionism. There have been massive changes to work that have nothing to do with culture that have diminished union power. There have been “cultural” changes that are neither conservative nor liberal that have reduced union power. Anecdote only but a union worker recently retired from my facility is a neighbor and his “memory” was that pre-1995 (about) strikes were more effective for several reasons, including this: The ability to put pressure on the company by slashing tires on non-union workers was high because 1) far more cars parked in lots outside the gate; 2) the video surveillance of parked cars either did not exist or was of very low quality.; 3) the local police department had officers whose fathers and cousins were in the union at the facility and did not exactly play it straight down the line. Tire-slashing was never legal, but prior to about 1995 it was expected and hard to prevent and union members knew that after the strike was settled nearly all cases would be dropped. Pressure of this type really was an important tool in the union strike toolbox. And it is gone and not replaced with anything. And thousands of specific industrial process decisions have been made with an idea of being able to withstand a strike longer. Positions are still unionized but replacing such a person with a non-union employee for “the duration” is much more feasible with much lower drops in throughput or quality. “The duration” now in union minds is that the company could go past a year without terrible stresses – way longer than older union guys think is worth it and that is the big majority of the union now – older guys.
rjs and emike – You refer to a SSA page with SSI benefit data. SSI is not Disability Insurance. DI is something else.
As of March there were 10.8m people on DI. I can’t tell what percent of those are less than 65.
When you think of disability you have to think outside of DI. There are many private insurers (Aflac) and every State has disibility programs for those covered by workman’s comp.
“The women did not displace the men. The number of men in jobs kept increasing.”
But the percentage of men in the workforce has been declining. It is a relative displacement.
“I suppose immigration and unequal pay are factors in the reduction of labor share, but more so is loss of worker negotiating power.”
Naturally, if an employer can get an equally-productive worker for less he will do so. Perhaps the influx of immigrants and women into the workforce has contributed to the loss of workers’ negotiating power.
Something to read: https://www.bls.gov/opub/reports/womens-databook/2016/home.htm
thanks, Bruce, i really didnt know what i was looking at…i was just trying to determine if Dimon’s allegation that 57% of prime age males outside the labor force are on disabilty was possible…the aggregate DI number you quote suggests to me that his figure is probably in the ballpark…
rjs:
If you look at the first comment to this post, you will see the source to the comment of 57%. You are more likely to find the data at that site I linked to.
Interesting to hear Jamie Dimond get on his high horse and criticize the disabled. This is a guy who should be cooling his heels in jail for mortgage fraud, price fixing, and other criminal activity for which he paid over $35 billion in fines and penalties.
$35 billion in fines is one hell of a lot of criminal activity. Further, this is a guy who would have been out on the street selling pencils in 2008 if it hadn’t been for a taxpayer bailout of $25 billion during the credit crisis to cover his bad gambling bets. And he is rewarded for his criminal activity by receiving compensation of $28 million a year.
Meanwhile he believes the disabled are rolling in clover — with an average benefit of $12,000 a year which puts them right at the federal poverty level. Yes, a princely annual sum for the disabled that Dimond gets paid in one hour.
Jamie Dimon can burn in hell.
Sounds like to many women are being bred. In the past, empires would regulate how many women came into the picture by euthanizing the girls. The Christians complained about it.
Eric,
Right to work.
BK,
Go back to your hole. Anyone collecting from Aflac, etc. is collecting from SS.
https://www.ssa.gov/policy/docs/statcomps/di_asr/2015/sect01c.pdf
It appears that Social security disability and workmens comp are set up so one offsets the other to some extent. You can’t double dip there So it is likely if you are on long term disability with a job related industry you get a payment that is less than the sum of the two benefits.
As to private benefits it may or may not be the case that folks with private disability are on SSDI, it depends on the language of the contract for the private benefits. (Both insurance and employer provided disability).
As to Aflac a lot of its benefits are for before the disability system kicks in more for sickness as its adds say. Note aflac offers short term disability insurance which means it is likley to expire before the long term SSDI kicks in. In addition they provide supplemental Hospital Insurance as well. (Note no long term disability insurance)
One obvious difference between the U.S. and other developed countries is that the U.S. has been fighting relatively intense and continuous wars for years. And while I don’t know the percentage of the population as a whole, I know a LOT of retired military who are on disability, three of whom are in their early 30s.
Mark,
Welcome to AB…first time comments are held in moderation.
Emike – you say:
“Anyone collecting from Aflac, etc.
is collecting from SS.”
Not correct. Aflac is private insurance that is immediately available to someone with a short-term disability. DI takes years to get, and people are very often on it for life.
You also say:
“Go back to your hole.”
Are you always so rude? Get a life.
BK,
Yeah, this whole thread is about short term disability.
Second.
Just to you and people like you.
EM – You say that you feel free to be rude to “People like me”.
So I’m 67. Retired. Getting SS and on Medicare. White. Believe there is a God.
I’m a life time registered Democrat. I vote in every election. I have worked for the party on many matters over the years. I have traveled around the country to do what I could to to assist in elections. I’ve given more money than most to Democratic candidates.
How many readers at AB fit in that profile? And you think you are in a position to be rude.
Recall that you gave misinformation on DI. I corrected you. In your very small way you think that is an excuse to be rude.
well, as someone who was on the receiving end of your own rudeness, Bruce, let me apologize for those here who, like you, would engage in ad hominem attacks on others they disagree with…
Krasting,
I believe absolutely nothing you say, not that it matters. My opinion of you is formed by your comments in here. I am quite comfortable with my opinion of you.
Can you fix the title of this post?
This has already been gone over. There has not been a non age adjusted increase in the percent of people on disability. 6 out of 10 applicants are denied. Data from SSI changes in the 90’s find that even during the dot com boom removing people from the disability rolls only increased their yearly income by a few thousand. These were the least disabled.
How do all of these people get on disability. I have had two kidney transplants and a laundry list of other problems mainly due to all of the medications I have to take and the surgeries I have had and Social Security claims I am “not disabled.”
Get an attorney who can navigate the issue for you. Welcome to AB.