Food Stamps and Why It is a Bad Idea to Cut Them

October 28, 2013 at 4:18 am Leave a comment

 

UPI reports

  • SNAP enrollment in the last 10 years more than doubled to 47 million but, for the first time, the number of Americans receiving food stamps increased even when the economy was growing.
  • During the 2003-07 expansion, the SNAP case load, — in a break with historic trends — rose 24 percent, the Center for Retirement Research at Boston College reported.
  • CRC economists Matt Rutledge and April Yanyuan Wu said one reason is a change in the longstanding correlation between poverty and the unemployment rate.
  • Poverty used to fall in tandem with the jobless rate, reducing the need for food stamps but the researchers found poverty did not decline as the economy grew in the mid-2000s — and in the recovery following the Great Recession, the number of people receiving food stamps kept rising.
  • The assumption has always been a stronger labor market would reduce the need for food stamps, the economists said, but the new trend suggests rising employment might no longer be enough.

The reality is that the minimum wage has failed to go up significantly since the last minimum wages.  Any gain made to the minimum wage is eaten by inflation and Congress has take any action to adjust the minimum wage as shown in this chart

Year

Minimum Wage

Wage by CPI

2009

$7.25

$5.30

2010

$7.25

$5.22

2011

$7.25

$5.06

2012

$7.25

$4.97

2013

$7.25

$4.87

CNN reports

  • The cuts, totaling $5 billion, will mean less money for groceries for millions of people who rely on food stamps.
  • However, experts say it’s highly unlikely at a time when Republicans are calling for even more drastic cuts to food stamps.
  • Some 47.6 million people, or nearly 15% of the population, get food stamps, according to September federal data.
  • In fact, the discussion among Republicans is to what degree food stamps should be whittled down.
  • In September, the Republican-controlled House passed a bill that tightens eligibility for food stamps.

So, in reality, we have seen no action on food stamps and we see a deterioration in the minimum wage because Congress refuses to raise it to $9 as state by Obama earlier this year

The only way to decrease reliance on food stamps is to see significant increases in wages of low-skilled and members of the working poor.  As the source of the middle wage jobs is increasingly is drying off, low-wage jobs dominate the circumstances.

The Republicans do not have any real plan to find a way to increase the wages of low-skilled and the working poor.  The reality is that the Republicans who are aligned with big business that forcing big business to increase the wages of low-wage workers is going to decrease the quarterly earning per share that Wall Street lives and dies on.

If the Republicans refuse to raise the minimum wages or find ways to force business to raise wage such as loosening of unionization laws,  there will be substantial portion of the population that is required to be on food stamps.

The easiest way in a revenue-neutral sense is threaten big business with cutting corporate tax loopholes to fund expanded food stamps and other social welfare benefits or pay your workers more money.  Until big business is weaned off its obsession with short-term quarterly earnings and realizes that a higher wage is better for its long-term prospects, the government is required to play an interventionist role in the economy when it comes to social welfare programs like food stamps.

 

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