September 22, 2013

Maine mills’ decline coincides with spike on disability rolls

Former papermakers are part of a national shift: using the program for long-term unemployment relief.

By MICHAEL A. FLETCHER The Washington Post

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The Great Northern Paper plant in East Millinocket continues to operate, but at a greatly diminished capacity compared to the Maine paper industry’s heyday. Some of the job losses have contributed to a rise in disability claims in the area.

Photos for The Washington Post by Carl D. Walsh

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Eugene LaPorte worked at the Great Northern mill in East Millinocket for 38 years before being laid off in 2011. Since then, LaPorte, who has a number of health issues, has been among an increasing number of disability recipients.

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Lawmakers are concerned that some states have encouraged unemployed workers with disabilities to apply for the program, shifting the economic burden for the jobless to the federal government.


But the most salient factor in the program's explosive growth, many economists say, is the difficult job market -- particularly for people with few educational credentials.

"The Social Security disability program has become an economic option for many people," said John Dorrer, an economist and former acting commissioner of the Maine Department of Labor. "As a result of the economic downturn, a whole lot of unskilled males 50 and over were bounced out of the labor force."

For decades, the number of applicants has almost always increased during economic downturns.

"The bad economy has coincided with baby boomers hitting the disability-prone years," said Daniel Emery, a disability lawyer in South Portland. "Most people want to work. But employers are less apt to make accommodations when the economy is down. One thing I always ask people is whether they liked their jobs. Often, people just tear up when you ask them that."

Benefits are hardly generous. They average $1,130 a month, and recipients are eligible for Medicare after two years. But with workers without a high school diploma earning a median wage of $471 per week, disability benefits are increasingly attractive for the large share of American workers who have seen both their pay and job options constricted.

In 2004, nearly one in five male high school dropouts between ages 55 and 64 was on the disability program, according to a paper by economists David Autor and Mark Duggan. That rate was more than double that of high school graduates of the same age on the program and more than five times higher than the 3.7 percent of college graduates of that age who collect disability.

"When you are faced with job loss, what do you do?" said Andrew Houtenville, director of research for the University of New Hampshire's Institute on Disability. "This is not necessarily shirking. To be on disability insurance, you have to have a pretty serious condition. If you have a severe disability and a job is no longer available in your region, you go to disability and you get stuck there."

These days, LaPorte spends a lot of his free time riding his Harley-Davidson motorcycle to bike rallies around New England. He enjoys the freedom, but he said he would prefer to be working than collecting a government check.

"I wanted to go to work," he said. "I love making paper. Fifty-eight is a ridiculous age to retire."


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The paper mill in Millinocket, which opened in 1900, now sits closed as the private equity firm Cate Street Capital tries to revive its operation. Great Northern at one time employed 4,500 workers in the area. Now it is down to about 400 employees working at the mill in East Millinocket.


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