How The Farm Bill’s $8.7 Billion Food Stamp Cuts Hurt Working America
Working age adults now make up the majority of food stamp recipients, but would raising their hourly wage get them off food stamps?
JESSICA DESVARIEUX, TRNN PRODUCER: On her day off from work, D.C. resident Kathy Burke heads to a local food pantry, Thrive DC. She works part-time, making $10 an hour, and she says she needs any help that she can get, even though she’s on the Supplemental Nutrition Assistance Program, commonly known as food stamps.
KATHY BURKE, FOOD STAMP RECIPIENT: Boy. They probably sent me a letter about the food stamps. That’s probably what this is.
DESVARIEUX: With both a bachelor’s degree and master’s, Kathy says her food stamp payments usually don’t last her the entire month.
BURKE: Sometimes that’s all what I depend on is my food stamps, and it doesn’t last that long.
DESVARIEUX: Now her benefits may be lasting for an even shorter period. President Obama will sign into law the new farm bill, which cuts food stamps by $8.7 billion over ten years. It’s about a 1 percent cut of the overall program but its reach will affect 850,000 households who currently depend on food stamps–that’s one out of seven Americans. And according to the Congressional Budget Office estimates, households would have their benefits reduced by an average of $90 a month.
Such a reduction comes on top of the November 2013 cuts, which slashed $5 billion from SNAP due to sequestration. But in this second round of cuts, the face of food stamps has changed. The majority of recipients were once the elderly and children, but for the first time working-age adults, ages 18 to 59, now make up the majority of food stamp recipients.
The Associated Press collaborated with the University of Kentucky to analyze the data. The Real News spoke with lead researcher and economics professor James Ziliak to get his take on what he saw as the root cause of this shift.
JAMES ZILIAK, DIRECTOR, CENTER FOR POVERTY RESEARCH, UNIV. OF KENTUCKY: So the unemployment rate still has kind of the biggest effect overall in determining movements on and off the SNAP caseload. But I also show that if you go back to 1980 and do this analysis, that kind of the stagnant wages and inequality only account for about 3.5 percent of the growth. So, you know, this leads to the conclusion that the inequality and stagnant wages component is accounted for a larger fraction of the recent growth in SNAP, relative to historic trends.
DESVARIEUX: Professor Ziliak adds that it’s not to say that widening inequality did not exist in the ’80s, but he says what’s different now is that middle earners are on the declining side of income distribution.
ZILIAK: The story of inequality is a little different then than it is now. Now what you have is over the last decade is that earnings at the middle of the distribution have been declining once you account for inflation, they’ve been relatively stable or stagnant, as it were, in the bottom 25 percent, and then just really skyrocketing, especially in the top 1 percent of the distribution.
DESVARIEUX: That decline in earnings for workers has lead to some people with jobs needing services from places like Thrive DC.
JESSICA MACLEOD, DIRECTOR OF SOCIAL SERVICES, THRIVE DC: We serve people who are working part-time or full-time
and just can’t make ends meet. And they may have food stamps, but they’re not sufficient for the amount of food they need each month. We have one client, and she’s been working in construction for many years, and at the moment it’s a little slow, but she still has a job, and she’s just recently had to go back on food stamps to support herself, because her income is, you know, too low at the moment because the hourly wage as well is too low for her.
DESVARIEUX: But it begs to ask the question, if the hourly wage was higher for these working food stamp recipients, would they even need to be on food stamps at all? On Capitol Hill, minimum wage is a hot-button topic after President Obama addressed raising the minimum wage to about $10 for future federal contractor employees in his State of the Union address.
BARACK OBAMA, U.S. PRESIDENT: Today, the federal minimum wage is worth about 20 percent less than it was when Ronald Reagan first stood here. And Tom Harkin and George Miller have a bill to fix that by lifting the minimum wage to $10.10. It’s easy to remember. Ten-ten. This will help families. It’ll give businesses customers with more money to spend. It does not involve any new bureaucratic program. So join the rest of the country. Say yes. Give America a raise. Give them a raise.
DESVARIEUX: But Republicans argue that a hike in the federal minimum wage would force employers to fire current employees.
JOHN BOEHNER, SPEAKER, U.S. HOUSE OF REPRESENTATIVES: When it comes to the federal minimum wage–listen, I used to be an employee. When you raise the cost of something, you get less of it. And we know from increases of the minimum wage in the past that hundreds of thousands of low-income Americans have lost their jobs. And so the very people the president purports to help are the ones who are going to get hurt by this.
JEFF FAUX, FOUNDER, ECONOMIC POLICY INSTITUTE: Well, small businesses do well when the economy does well. And the economy does well when people have enough money in their pockets to go out and spend. Now, that’s just the way it works. Nobody spends, nobody works. And what we’re doing here–I was a small-business man for a while. I was in the restaurant business. And I can tell you something. The minimum wage had very, very little effect on that business. What we were concerned about was: are there customers coming in the door to buy our products? And how do those customers get money in their pocket? They get money in their pocket by working for a living at a decent wage.
DESVARIEUX: Jeff Faux is a distinguished fellow at the Economic Policy Institute in washington, D.C. He says that this farm bill represents how Democrats and Republicans are not on opposite sides of this issue. It was the first time in history that a Democratically controlled Senate cut the program, which was started under the direction of then secretary of agriculture Henry Wallace in 1939. But now, in 2014, Faux points out that this farm bill will widen the inequality gap if a living wage of $13 an hour is not a part of the equation.
FAUX: Despite the fact that the president of the United States in his State of the Union address, you know, talked about inequality–you’ve got even Republicans talking about inequality–they talk and talk and talk. But when push comes to shove, like this farm bill–great example–when push comes to shove, they move in the opposite direction. The farm bill will make America more unequal.
DESVARIEUX: Faux says that with a living wage, the majority of working people on food stamps would no longer have to depend on them.
FAUX: –and in–raise wages in general in this country that, you know, have been stagnant for 30 years and falling for about ten years, if we raise wages, then we don’t need programs like food stamps. They’ll still obviously be necessary for those who are too elderly, who are disabled, etc., but the real increase in the need for food stamps has, ironically, come from those people who are working.
DESVARIEUX: People like Kathy Burke, who says that she hopes to find a full-time job, but one that pays her well enough so that she can afford her own apartment.
BURKE: I want to work. I don’t want to be on food stamps. If I get a job, I will cut it off and just do it on my own, ’cause that’s what I’ve been doing anyway, ’cause they don’t last that long, food stamps. Yeah.
DESVARIEUX: For The Real News Network, Jessica Desvarieux, Washington.
DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.