When the economy takes a downturn and unemployment rises, more people rely on the social safety net and programs like the recently renamed food stamp program called SNAP (Supplemental Nutrition Assistance Program). As the economy improves and employment increases, people need to rely less on government provided support.
At least that’s what used to happen. But something has changed.
From 1969 until 2003, SNAP has been very responsive to changes in the unemployment rate. But from 2003 to 2007, the number of SNAP recipients kept increasing even as unemployment declined. And the number of SNAP recipients has barely come off its all-time peak of 47.8 million recipients hit in December 2012. Since then, the number of SNAP recipients has only declined by 2.7 percent and started increasing again in the months of April and June 2014.
So why, asks AEI’s poverty scholar Robert Doar, is the number of SNAP recipients staying near record highs even as the economy strengthens? A still-weak economy is part of the answer, says Doar, but not a sufficient explanation:
But even that explanation isn’t entirely sufficient for one very important reason – a lot of SNAP recipients, who could be working at least a little, aren’t. Government data show that as many as 10 million working age adults are getting SNAP and reporting no income from earnings. A program can’t be a “work support” if the recipients aren’t working.
Or are they? My experience and many studies of low-income communities suggest that at least some of the SNAP recipients who report no earnings have earnings which they receive off the books.
Then there is the Casey Mulligan effect, named that after the University of Chicago economist who has shown that various safety net programs – absent a work requirement – are allowing people to stay out of work longer than they otherwise would if no benefits were available. In the past, I have been skeptical of this position when it is directed at SNAP benefits alone. It is difficult to see how a voucher for food with an average household benefit of less than $230 per month could provide enough aid to make someone decline looking for work. But if that benefit is combined with other benefits — such as housing assistance, Medicaid or Unemployment Insurance benefits — it is then possible, even predictable, that this layering of programs may lead some to decide that full time, on-the-books employment is not worth the effort.
