Wednesday, June 20, 2012

Nash Keune's misleading numbers on the food stamp program

At NRO, Nash Keune asks why the food stamp program is still growing if unemployment is coming down:
"In 2000, only 17.3 million people were on food stamps. That number has ballooned to 46.6 million. Of course, it makes sense that participation in a countercyclical program would increase during a recession. But the number of people using food stamps has grown much more than the participation in other similar programs. For example, Medicaid spending increased 27 percent during the recession, while food-stamp spending has jumped 110 percent. 
Conversely, as the unemployment rate has come down in the last couple of years, the participation rates have actually jumped. From FY 2009 to FY 2011 the number of people receiving food stamps increased by 11.2 million even while the unemployment rate declined modestly. Even according to the rosy economic predictions of the Congressional Budget Office, the number of people on food stamps is projected to drop back only to 33.7 million by 2022, a time in which the unemployment rate is expected to fall to 5.3 percent. This projection of 33.7 million recipients is still slightly higher than the number of people on food stamps in the heart of the recession in 2009, and it’s almost twice the number of recipients in 2000."
It's true that the unemployment rate has declined somewhat, though it's still more than double the 4 percent unemployment rate that existed in 2000.  And even that number is misleadingly optimistic, since the workforce participation rate is incredibly low right now—lots of unemployed Americans have simply given up trying to find a job, since they aren't finding a job.

What's more, even as the unemployment rate has declined slightly, America's poverty rate has continued to climb: 2009's 14.3 percent poverty rate was the highest since 1965. Then it went up to 15.1 percent in 2010. That was about 46.2 million people living in poverty—a number that corresponds pretty closely to Keune's 46.6 million on food stamps, no? 

Yes, but Medicaid spending has increased at only a quarter the rate of food stamp spending! Well, sure. And the explanation for that is easy: Except when emergencies strike, people can and will put off medical spending when they're poor. But you gotta eat.

The unemployment rate on its own is an insufficient indicator of whether people need the food stamp program; just because you have a job doesn't mean it pays well. The poverty rate is probably a better indication of our national need.

In any case, it's telling that Keune cites a "declining unemployment rate" while never specifying the size of that decline. Maybe it's because the jobs situation is still much worse than it was in 2000; it's clear the need for food assistance remains high as well.

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