ECONOMY Updated April 7, 2013, 10:39 p.m. ET Workers Stuck in Disability Stunt Economic Recovery The unexpectedly large number of American workers who piled into the Social Security Administration's disability program during the recession and its aftermath threatens to cost the economy tens of billions a year in lost wages and diminished tax revenues. Signs of the problem surfaced Friday, in a dismal jobs report that showed U.S. labor force participation rates falling last month to the lowest levels since 1979, the wrong direction for an economy that instead needs new legions of working men and women to drive growth and sustain a baby boomer generation headed to retirement. Michael Feroli, chief U.S. economist for J.P. Morgan, estimates that since the recession, the worker flight to the Social Security Disability Insurance program accounts for as much as a quarter of the puzzling drop in participation rates, a labor exodus with far-reaching economic consequences. The unemployment rate in Friday's report fell to a four-year low of 7.6%, which most times signals job growth. This time it reflected workers leaving the workforce, a problem that could persist: Economists say relatively few people are likely to trade their disability checks for paychecks, in part because the program doesn't give much incentive to leave. Federal Reserve Chairman Ben Bernanke has worried that the financial crisis would lead to a permanent loss of workers, setting up what economists call hysteresis, a term borrowed from physics to describe temporary market changes that lead to permanent economic losses. <B>It is no longer a theoretical problem, said David Autor, a professor at the Massachusetts Institute of Technology, who has studied the disability program. The economy has a case of hysteresis, he said, created by the permanent transfer of workers to disability rolls.</B> With an expanded list of disabilities added by Congress in 1984, more than half of people awarded benefits now qualify because of musculoskeletal problemsâincluding back painâmood disorders and other mental problems, according to Social Security data. <B>Since the recession, more people have gone on disability, on net, than new workers have joined the labor force.</B> Mr. Feroli estimated the exodus to disability costs 0.6% of national output, equal to about $95 billion a year. "The greater cost is their long-term dependency on transfers from the federal government," Mr. Autor said, "placing strain on the soon-to-be exhausted Social Security Disability trust fund." http://online.wsj.com/article/SB10001424127887323511804578298151374531578.html We are doomed.