The Free Press, Mankato, MN

November 17, 2013

The poor don't get lazy overnight

Budget cuts to food stamps will hurt the economy


The Mankato Free Press

---- — The Free Press recently published the results of an online poll, asking readers if America provides too much aid to the poor. While the poll provided an opportunity to air opinions (a slight majority felt “too many people receive government assistance”), it may be more enlightening to not only consider a few facts, but re-phrase the question.

Because the problem isn't that too many people are receiving government assistance. The problem is that too many people need government assistance.

The first step in differentiating between opinion and fact is recognizing that many Americans have a peculiar propensity for conflating poverty with morality. There's a line of reasoning that says if someone is poor, it's probably their fault. They're unwilling to work, and lulled into dependence by all that sweet, sweet government money.

That's an opinion. Here's a fact:

In 2000, there were about 16,300 people living in poverty in the nine counties of south central Minnesota, according to the U.S. Census Bureau. After a couple recessions, that number had swollen to 28,000 by 2011. Did nearly 12,000 of our friends and neighbors suddenly become lazy?

Of course not. The fact is that macroeconomic conditions determine the number of people needing government assistance. We're still slogging along in the aftermath of the greatest financial shock to rattle world markets in nearly 80 years. Our neighbors didn't bring the world economy to its knees, but many of them are bearing the burden through lost jobs and reduced earnings.

Which brings us to the great American fable that anyone willing to work can hoist themselves up by their own bootstraps, kick down any obstacles and march directly to the promised land.

There's no doubt that gainful employment provides the most direct route out of poverty for those capable of working. The catch, though, is the word “gainful.” The Jobs Now Coalition recently looked at south central Minnesota, and found that while there were more job openings than at any time in the last eight years, nearly half of those jobs were part-time positions paying a median wage of less than $9 an hour.

There were 6,600 job seekers competing for 1,500 full-time jobs, a ratio of 4.4 to 1. Moreover, the median wage for all openings was less than $11 an hour, in an area where a family of four needs two parents working full-time and earning $12.47 an hour just to meet basic needs.

It's hard to pull yourself up by your own bootstraps when you can't afford boots.

How about the opinion we have an overly generous nanny state that allows half of the U.S. population to slide by as “takers,” as a recent failed presidential candidate put it? That's another myth that doesn't stand up under scrutiny.

The average SNAP recipient will now receive about $1.40 per meal, according to the Coalition on Human Needs. More than half of working-age, non-disabled adults receiving food stamps are employed (80 percent were working in the year prior to or after receiving assistance), they're just not making enough money to get by.

In many cases, these are families with young children. According to the U.S. Department of Agriculture, the average gross income of SNAP households with children was a little more than $13,000 in 2011. For a family of four, that's more than 40 percent below the federal poverty line, which is itself a misleadingly low threshold.

But doesn't government assistance like this start people on a lifetime of moocherism? Well, no. Harvard economics professor Raj Chetty reports that nearly a dozen economic studies looked at the question of whether extending unemployment benefits increases unemployment by disincentivizing people to work. Economists analyzed patterns in states that extended unemployment benefits with states that did not. The uniform conclusion: a 10-week extension in unemployment benefits increased the length of time people were out of work by at most one week.

At a time when unemployment remains mired above 7 percent (and it would be considerably higher if so many people hadn't dropped out of the work force), government's focus on austerity over job creation has prolonged the economic slump and inflicted needless misery on millions of Americans. Researchers at the Federal Reserve Board recently reported that failure to address long-term unemployment is reducing the country's economic potential by $1 trillion a year.

The recent cuts to the food stamp program will save $11 billion over three years, while leaving millions of Americans unsure if they are going to be able to feed their kids. By comparison, closing a loophole in the corporate tax code that allows businesses to deduct the cost of performance-based executive pay would save $50 billion in 10 years. And corporations would still be able to deduct the first million dollars of their CEO's pay.

I'll leave it to your opinion as to which end of the economic spectrum we should look to for savings.

Jim Gehrke is the Awareness Coordinator at Minnesota Valley Action Council, south central.