This week, the U.S. Department of Agriculture is expected to release its latest update on the food stamp program. It's an important indicator of the nation's economic health — and the prognosis is not good.
Food stamp use is up 70 percent over the past four years and that trend is expected to continue.
The spike began in late-2008 and early-2009 when the worst of the recession was triggering massive layoffs and home foreclosures. Although the economy has been growing since mid-2009, the pace has been too slow to absorb the nearly 14 million people without jobs. Nearly half of those have been out of work more than six months.
As a result, the number of people seeking federal help with groceries has been soaring. At this time four years ago, before the recession hit, about 27 million people were using food stamps. Today 46 million get help through the Supplemental Nutrition Assistance Program — what most people call food stamps — which is roughly 15 percent of the population.
The combination of rising prices and stagnant wages have contributed to the need for food stamps; about 40 percent of food stamp recipients live in households where a family member is earning a wage.
But the government's latest inflation report shows that the cost of living increased 3.6 percent in the past year while wages have barely budged. So a lot of working people need food stamps to close the gap between their low wages and high grocery bills.
Expensive For Taxpayers
The problem is likely to get worse. A number of factors — spring floods, summer droughts and soaring global appetites — have contributed to push up corn prices by about 70 percent since last August. Corn goes into many food products as well as livestock feed, so it appears likely retail food prices will continue to rise more quickly than wages or jobs in coming months.
Whether the food stamp program can keep pace with demand is unclear because the program is very expensive for taxpayers — about $68 billion last year.
For recipients, it's not particularly generous. The maximum for a family of four is $668 a month, which works out to about $42 per person per week. If each person were to eat three meals a day, that's about $2 for each meal. But the collective cost of all those meals is significant at a time when Congress is looking to cut spending.
Federal support for food stamps was boosted in early 2009 as part of the federal stimulus package. But that extra spending will expire in 2013, and extending the extra funding beyond that date would be controversial.
Helping Families And The Economy
Some economists say the program is worth every penny because it stimulates the retail sector. There's no dispute that many grocery stores would see a huge drop in business if their customers couldn't afford food.
For example, in Alabama, about one-third of the residents purchase their food with government help.
Economists say federal aid for food allows families to spend more on gasoline to drive a family member to work or purchase coats for their children, and that all helps expand the economy.
But other economists, as well as many conservative candidates and lawmakers, say food stamps dampen incentives to find work or even plant a garden.
And there's the question of fraud. About one-third of the people who qualify for aid don't reach out to get it and a number of other people try to scam the system.
Plus, many taxpayers simply object to having money taken from their paychecks to put food on someone else's table.
JOHN YDSTIE, Host:
This is WEEKEND EDITION from NPR News. I'm John Ydstie. This week, the U.S. Department of Agriculture is expected to release its latest update on the Food Stamp program. It's an important indicator of the nation's economic health, and the prognosis is not good. Food stamp use is up 70 percent over the last four years, and that trend is expected to continue. NPR senior business editor Marilyn Geewax is here with details. Welcome, Marilyn.
MARILYN GEEWAX: Hi, John.
YDSTIE: So, the economy has been growing for more than two years now - slowly - but I guess not fast enough to slow down the increased use of the Food Stamp program.
GEEWAX: Right. At this time four years ago, just before the recession hit, about 27 million Americans were getting food stamps. Today, it's about 46 million. That's roughly 15 percent of the population. And what's really striking when you look at the chart on this is the line just goes straight up. Economists think that the report that's going to come out this week, it'll show that it keeps going up.
YDSTIE: But the economy has been adding jobs since 2009 - not enough to make a real dent in unemployment but still an increase. Why doesn't food stamp use reflect that?
GEEWAX: Well, there are a few reasons. First, nearly half of the 14 million people who are unemployed right now have been out of work six months or longer, and many of them, even when they do find jobs, remain eligible for food stamps, and that pretty much illustrates the other problem. Wages haven't been rising to keep pace with food costs. About 40 percent of the food stamp recipients live in a household where a family member is working, they are earning a wage. But the government's latest inflation report shows that the cost of living has gone up 3.6 percent over the past year and wages really haven't budged that much.
YDSTIE: And there are a lot of factors behind this rise in food prices.
GEEWAX: Oh, you name it. We've had spring floods, summer droughts, soaring global appetites for our foods. Those factors have contributed to about a 70 percent rise in the price of corn just since last August.
YDSTIE: And can the Food Stamp program keep pace?
GEEWAX: John, that's unclear because this is a very expensive program for taxpayers. It's not that it's so generous to individuals. The maximum for a family of four, for example, is $668 a month. So, that works out to $42 per person per week. So, if you figure each person eats three meals a day, that's about $2 for each meal. But when you put it all together, the collective tab is pretty big. Last year, it totaled something like $68 billion.
YDSTIE: And that's certainly a lot when Congress is looking to cut federal spending.
GEEWAX: Exactly. Spending on food stamps, you know, it was actually increased back in 2009 as part of the federal stimulus package. But that extra spending is going to expire in 2013. Of course, extending that kind of funding would be very controversial. Some economists say that the program is certainly worth every penny because it stimulates the economy, and really there's not any question that a lot of grocery stores would see a huge drop in their business if their customers couldn't afford to buy food.
GEEWAX: Some economists say that aid for food helps families spend more money on things like gasoline to drive a family member to work or to get coats for the kids to go to school.
YDSTIE: But then, of course, there's the other school of thought that says government assistance leads to long-term dependency.
GEEWAX: Yes. There are other economists, and certainly a lot of lawmakers, who would say that food stamps dampen your incentives to go out and find work or even do things like plant a garden. And there are also questions about fraud. Although about a third of people who qualify for aid actually don't go and get it, there are lots of other people who try to scam the system. And, of course, plenty of taxpayers just object to this idea of having money taken from their paychecks and using it to put food on somebody else's table. These are some of the issues that I think we're going to hear a lot about in the coming month when lawmakers return to Washington and the farmers start to harvest those crops.
YDSTIE: NPR senior business editor Marilyn Geewax. Thanks for joining us, Marilyn.
GEEWAX: Oh, you're welcome, John. Transcript provided by NPR, Copyright NPR.