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The Economic Fallout of Food Stamp Cuts Has Begun

The Economic Fallout of Food Stamp Cuts Has Begun

In 2009, the federal government increased the Supplemental Nutrition Assistance Program (SNAP) amount as part of the economic stimulus plan. The increase was temporary and expired in November 2013, removing more than $5 billion in food assistance for millions of Americans. This year, the new Farm Bill cut an additional $8.5 billion from the program.

For those that don’t live paycheck to paycheck, the idea of losing $10 or $20 from their monthly income may not make a big difference in their lives. However, for the millions of people receiving SNAP assistance, it can mean missing a meal…or five. A parent may have to skip a meal so their children can eat. It can mean making choices between foods that are healthy and those that exacerbate existing problems.

For those that live in areas where fresh fruits and vegetables aren’t easy to come by, a reduction of as little as $10 can mean skipping a week’s worth of fruit, or having to resort to less healthy packaged foods as a substitute. Packaged foods are often high in sodium and sugar, which can exacerbate health issues like diabetes or obesity. Anyone with a strict diet due to health issues, like food allergies, have very little room in their budget to find suitable alternatives.

Drought, extreme weather and livestock problems have led to a dramatic increase in food prices this year. This means that staples like rice and meat are more expensive. Food prices are expected to rise as much as four percent, just as benefits decrease by as much as twice that for many. All of this was exacerbated for millions when extended unemployment benefits ended.

It means that buying habits for basic needs are changing.

While the political rhetoric about food stamps and other safety net programs rages on, the reality of the economic impact is hitting communities nationwide. The local grocery stores are just as dependent on their customers’ spending. When they can no longer afford to buy as much food, it affects the stores’ bottom line. Stores in communities where a large percentage of customers rely on food stamps are seeing a severe decrease in sales, with some fearing layoffs. Families will also have less to spend on other items, having to cut back on other things to make up for the loss in their food budget.

It’s not just affecting the local grocer, either, but also huge retailers.

Wal-Mart has generally been the go-to option for those on a limited budget. However, even they are being affected by the change in their customer’s buying habits. Customers are forgoing the “low price leader” and heading to the dollar store to get things like shampoo and toilet paper. They are also not spending as much in their grocery department.

After all, 20 percent of Wal-Mart customers rely on food stamps.

Almost half of all food stamps are spent at big box retailers like Wal-Mart and Target. Both entities are feeling the shock of fewer customers spending less. The fourth quarter 2013 earnings report for Wal-Mart was one of its worse in years. And it can all be traced back to cuts in food stamps.

As the numbers of people needing assistance are increasing – more of who are middle class, educated and have never been on assistance before – the amount of need available is decreasing. Now that both SNAP and long term unemployment benefits have been cut, the economy is feeling the pinch. This is in addition to cuts in Temporary Assistance for Needy Families (TANF), WIC and housing assistance. Food banks are unable to keep up the pace with the increased demand.

While those who advocate austerity in times of economic crisis, the data shows that increasing safety net programs does more to help the economy. There is little doubt that the increase in SNAP assistance in 2009 and the extension of long-term unemployment benefits in 2009 significantly contributed to the economic recovery. It’s not because those on assistance (many of whom were working) were buying big ticket items like cars or houses. They were putting money back into the economy immediately at grocery stores, the gas station and, yes, Wal-Mart.

The so-called recovery from the recession has largely benefited those in the top of the financial brackets. Most are still trying to get their footing and haven’t even begun to rebuild what was lost. As policy makers continue to limit the options for those that most need it, it’s possible the recovery will continue to bypass the majority of people. This can end up destroying whatever progress that has been made.

Let’s hope it’s not too late for policy makers to realize that from the local grocer to Wal-Mart, economic benefits don’t trickle down – they trickle up.

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162 comments

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12:27PM PDT on Sep 16, 2014

I had a hard time relocating here to Louisville, KY. I been ill with some kind of dizziness (all hours of the day) issue. My food stamps stopped before I got to apply for food stamps here in KY. My adult son and I have been very hungry this month especially. We are selling this desk top today to get money so we can go buy food. We accidently rented an apt that has no fridge or stove. This soup kitchen we walked to today, we arrived a few min after 12 noon and they said they had finished serving for the day. The booklet we had said 12 to 1 and they said they changed their hours to 11 to 12. They gave us some barbeque and buns but no fruit or veg with it. But it was food even though not the best food for either of us to eat especially without any fiber type food to go with it like fruits and vegetables. I started crying just to get them to give us that much. They gave us some boxes of cookies and a box of something else, probably like a coffee cake I'm not sure what it is. It's 3:24pm and I'm hungry. I hope the guy comes soon to buy this computer. There's not many soup kitchens in Louisville at least it seems like there isn't. It really hurts to be hungry. I feel very sorry for people out there who don't have enough to eat and whom are malnourished. I know I'm malnourished and my very slender son I'm sure is also. God help us all and God help all these poor pets and animals whom are being neglected and not feed, watered and suffering other abuse to.

1:01PM PDT on Jun 13, 2014

We have many food banks here in the UK too. People are really struggling and those who have plenty to spare never stop whining about having to give a little of the taxes to support those in need.

1:03PM PDT on May 3, 2014

Congress needs to adjust their priorities to the American people who pay their salaries and stop catering to special interests. Stop those corporate bail-puts. If they cannot make a better product or make a balanced budget...

8:49AM PDT on Apr 5, 2014

EXACTLY MIchael and Janice. There is no shortage of money in this country. There is a shortage of WILL. Ideology is trumping humanity. Well said, both of you

8:00PM PDT on Apr 4, 2014

Absolutely correct Janice. And lets not forget the 2-3 trillion being doled out as corporate welfare over a 4 year period including 500 plus billion to the Pentagon, including all that money spent on M1A1 Abrams tanks the military said it didn't need or want, but legislators whose constituents were responsible for building them wanted to continue to do so at our expense. And let's not talk about that F35 disaster. But cutting food stamps for the poor sure, let's cut those do-nothing folks, that corporations in America have terminated by finding cheaper labor in other countries, replacing some with robots, and rather than expanding their businesses are keeping some 21 trillion in offshore accounts to avoid taxation.

3:11PM PDT on Apr 4, 2014

The USA spent 2.5 million dollars searching for the missing plane as of last week. NO PROBLEM ! !
And latest I heard the USA will be giving Ukraine a billion dollars NO ProBLEM.
But issuing food stamps for seniors and children BIG PROBLEM so-- must cut back.

1:08PM PDT on Apr 4, 2014

Thanks for sharing.

3:26PM PDT on Apr 2, 2014

(cont'd)
Note: The March 2012 numbers are slightly elevated due to disaster relief for windstorms that occurred in February and March 2012. However, the USDA did not give exact numbers, possibly because “congregate feeding” methods were used. See their statement here.]]]

Jane R
“This is a young person who is capable of working. I don't think the taxpayers of America should have to support these lazy, baby making machines!”

yeah cuz raising a child is “such” a breeze and 'so' cost effective. Who are you, Gweneth Paltrow.

3:24PM PDT on Apr 2, 2014

When China was admitted to the World Trade Organization in 2001, tariffs were lowered, and it became very profitable for American companies to relocate production to China’s sweatshops. Millions of American jobs were lost, and those former workers have piled up on the food-stamp rolls:

And while we have been offshoring jobs, we have been following a policy of mass immigration, bringing in about 1 million legal immigrants per year. It is painfully obvious that our economy has not been able to generate enough jobs for this massive increase in population, and widespread poverty is the result:

A program with this many participants incurs huge administrative costs: $3.6 billion in 2013 – and that is only the federal government’s share. In addition, each state spends money to administer their end of the operation. The chart shows only federal expenses. Costs have declined by $327.4 million since the peak in 2011:

Note: The numbers for Presidents Bush (43) and Obama are higher than they otherwise would have been because the government started to use food stamps for disaster relief starting in 2005 for Hurricane Katrina. See this PDF document for those numbers.

Note: The annual totals used above are based on the federal government’s fiscal year, which begins in October.

Note: The March 2012 numbers are slightly elevated due to disaster relief for windstorms that occurred in February and March 2012. However, the USDA did not give exact numbers, poss

3:22PM PDT on Apr 2, 2014

(cont'd)
The proposal would increase poverty and hardship and could affect the economy adversely. SNAP lifted about 4 million people out of poverty in 2010, including about 2 million children, under a Census poverty measure that counts the value of SNAP and other non-cash benefits. The proposed cut in SNAP benefits would push some households into poverty and deepen the extent of poverty for millions of others]]]

Mike C
“food stamp value has gone up 30% in the last 5 years while Social Security has gone up 1.5%. Sorry, no sympathy.”

Give me a frakking break. My 87 yr old mom's on snap she doesn't own a Cadillac or even drive anymore at all. In fact, I take care of her. I just love the lack of compassion many here display. Guess the story of the “Good Samaritan” is lost on you. And no, it's not a new kind of Hoagie.

[[[http://www.trivisonno.com/food-stamps-charts

The spike in May 2011 was due to a surge in Alabama after an historic onslaught of giant tornadoes devastated the state. According to the USDA’s report, about 1 million disaster victims from several states were added to the rolls.
(cont'd above)

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