We can help people earn more money

September 2019

One day in the mid-50s, my father was sitting with his book at the dining room table in our two-family house in Allston. The doorbell rang and a guy probably in his 50s came up the stairs to the hall in our second-floor apartment.

When he got there, he said “Fred sent me.”

“Who’s Fred?” my father asked.

The guy stopped, realized he had made a mistake and left. Looking out the window, my father watched him enter the house next door, where he got a much more hospitable response.

My parents said that they thought the woman next door was taking in sex clients because she needed the money to support herself and her infant child. She had to deal in cash and not report the income or they would take away her welfare payments.

A friend of my mother’s, a widow with two kids, had the same problem as our neighbor and she earned cash by cleaning houses. Had she been caught, she would have lost her welfare payments and she could have been convicted and jailed.

Fast forward 60 years and one of the biggest sources of government “welfare” payments has become Social Security Disability (SSDI). More than 11 million Americans — 4.7% of Americans between 18 and 63 — are on SSDI.

Most people on SSDI face the same problem as my former Allston neighbor and my mother’s friend. The amount they collect isn’t enough to live on, but if they get a job to supplement their income, they could lose their benefits. So, they are incentivized to violate the law and work for cash, which they don’t report.

It seems ridiculous to have a system which essentially discourages regular employment, especially when, in today’s world, there are so many jobs that don’t require physical health, and telecommuting is growing rapidly.

SSDI does have some allowances for work, as long as you don’t earn more than $1,220 per month. But the rules are complex and difficult, and most people don’t bother to navigate the regulatory thicket.

Instead of giving welfare recipients incentive to break the law, we should encourage them to get off SSDI if they can.

For example, Social Security could allow recipients to earn whatever they want but half of their earnings would be placed in something like a ROTH IRA which they cannot touch until they leave SSDI. Then they can use the money to establish themselves in a new apartment, buy a used car, or train for a new job.

My wife has a nephew who has had severe rheumatoid arthritis since he was five. It was so bad his growth was stunted. He is about the size of a ten-year old. He lives in a wheelchair, and his joints are so frozen he requires help to dress and use the bathroom.

When I met him 30 years ago, I doubted he would ever have a normal work life. But his parents did a good job of marshalling government resources. The government has provided attendants to help him as necessary, made it possible for him to go to college, and helped him get a vehicle that allows him to drive in his wheelchair. Now, in his early 40s, instead of living poorly on SSDI, he has a full-time job with an IT department in the defense department, is married, and he and his wife foster two children. With proper help he has become a productive member of society.

We should help others attain that goal.

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