The Rockefeller Institute of SUNY released a report on March 2nd, “The Economic Impact of Disability Services Providers in New York and NYSID: New Developments.” The report was funded by two disability services-related organizations: the New York Alliance for Innovation and Inclusion and New York State Industries for the Disabled (NYSID).
The report claims that “Providers have an economic impact of $15.6billion and employ over 98,000 people while supporting almost 200,000 jobs. In addition to that impact, NYSID member agencies and corporate partners generated an economic impact of $470 million, employing 4,794 workers with disabilities. Together, the economic impact is over $16 billion.” Does the report accurately reflect the program’s impact?
How the Report’s Analysis was Constructed
The authors use a widely used tool, IMPLAN (short for IMpact analysis for PLANning), a commercial input–output economic modeling system that estimates how changes in spending or production affect a regional economy. As described by the report’s authors, “This software shows how a dollar spent in one industry circulates through the economy. It assigns each industry a “multiplier” that is used to estimate how a dollar spent in that industry spills over into ot er industries. For example, IMPLAN can show how janitorial work, document handling, or medical services contribute to employment and income in other sectors of the economy. IMPLAN measures three types of effects: direct, indirect, and induced.“
In the report, the authors state that jobs and spending in disability services in New York contribute to employment and economic activity in the state. The analysis treats all employment and spending, directly and indirectly associated with the services, as additions to the state’s economy. But the critical question is whether those jobs and spending really increase economic activity, or do they substitute for jobs and spending from other organizations in the state.
The reported impacts reflect gross economic activity associated with disability-services spending. A net estimate would compare that spending to a plausible alternative use of the same public dollars (other in-state spending or taxpayer spending), and then add any true external inflows and measurable cost offsets.
Here, we need to know whether a significant amount of the activities undertaken by disability services providers would likely be undertaken by entities within New York State in their absence. In this case, clearly some would. For example, the services provided by NYSID include data entry, photocopying, grounds maintenance, janitorial services, furniture refurbishment, and food services, all of which directly compete with private-sector businesses. These are not export industries; they’re mostly local services, like janitorial/mail, and shredding.
Disability services clearly support many New York jobs and local purchasing because they’re delivered in the community and rely heavily on local staff. But whether they add to the state’s overall economy, rather than shifting spending from one place to another, depends on what would have happened with the same money if it hadn’t been spent on these programs (for example, if it had been spent on other services or left with taxpayers. The Report doesn’t answer that question.
Economic Impact Analysis Can Be the Wrong Yardstick
The Institute’s study asks the wrong question about the state’s disability services. The programs for people with disabilities were intended to benefit them by helping them live better, more comfortable, and productive lives. Subjecting disability assistance programs to an economic benefit analysis ignores the programs’ real benefits.
The clearest ways these programs can create a real “net” gain are when they bring additional dollars into New York (especially federal funding), help people with disabilities and their families work more and earn more, and prevent more costly problems that would otherwise be paid for elsewhere in the system (like crisis care or institutional placements). In that sense, the best case for net economic benefit rests more on those real-world outcomes than on multiplier totals alone. Unfortunately, the Rockefeller Institute Report doesn’t answer these questions.
Conclusions
The disability service agencies that commissioned this report sought an analysis that demonstrated the employment and dollar benefit of their presence in New York’s regions. But the analysis provides only a gross measure of economic impact. It does not acknowledge that a portion of the measured benefit substitutes the agencies’ activities for those of other businesses in New York’s regions.
The kind of analysis that New York needs is one that measures how well the state’s disability providers improve the lives of the people they serve. Do the services result in safer, more stable living situations; improved daily functioning and quality of life; reduced caregiver strain and burnout; better health; fewer crises; and a greater ability to work or volunteer?