Free Markets, Free People


Food Stamps Do Not Increase Employment

You may recall that I questioned the efficacy of Paul Rosenberg, et al.’s argument that increasing food stamp benefits would directly lead to an increase of 9 to 10 million more people being employed:

Without arguing the statistical or modeling specifics behind the chart, there is one glaring item that reveals how much magical thinking went into its creation. By far the most “stimulating” actions set forth are “Temporary Increase in Food Stamps”(calculated to create 9,803,333 jobs), “Extending Unemployment Insurance” (9,236,667 jobs), and “Increased infrastructure Spending” (9,010,000 jobs). The closest tax-cutting measure, according to this analysis, in job creation is a “Payroll Tax Holiday” which is estimated to create 7,253,333 jobs. Do you see the problem?

How, exactly, do food stamps and unemployment benefits create jobs? Arguably, spending on infrastructure could create construction jobs on a temporary basis, although that hasn’t proven to be the case with the stimulus bill that was passed. But there is simply no logic to the idea that providing government benefits to the poor and unemployed will serve to create jobs, much less 9 to 10 million of them. That’s just magical thinking.

[...]

Whatever the virtues of income support, and even if that support will be quickly spent in the economy, there is no justification for concluding that it will expand the economy. At best, it can stabilize a downturn by maintaining some level of consumer spending. But that does not expand the economy in any way, shape or form, and it certainly doesn’t create jobs [at] an unprecedented level as suggested by Rosenberg.

As it turns out, we have plenty of empirical evidence to show that, in fact, increasing food stamp aid does nothing to increase employment. Indeed, for the past decade, the US has dramatically increased the number of participants who receive food stamps to the point that 1 in every 8 Americans now partakes in the program:

The reason for the expansion, as the chart’s creators point out, is that we’ve been pushing food stamps not just on the needy, but on the working poor as well [via: James Joyner]:

States eased limits on people with cars and required fewer office visits from people with jobs. The federal government now gives bonuses to states that enroll the most eligible people.

A self-reinforcing cycle kicked in: outreach attracted more workers, and workers built support for outreach. In a given month, nearly 90 percent of food stamp recipients still have incomes below the federal poverty line, according to the Department of Agriculture. But among families with children, the share working rose to 47 percent in 2008, from 26 percent in the mid-1990s, and the share getting cash welfare fell by two-thirds.

Whether this is a good policy or not is neither here nor there. Instead, what should be glaringly evident is that there is no correlation between food stamp distribution and job creation. Over the past decade, as the number of people using food stamps rose from around 17 million to almost 35 million, the economy has both created and shed millions of jobs. For example, since December 2007, when the recession officially began, the economy lost 8.4 million jobs according to the Labor Department. Yet in that same time, according to the chart above, around 7 million more people received food stamps (rising from about 27 million to 34 million). If the “food stamps = job creation” were correct, how did we lose all of those jobs?

The inescapable conclusion is that food stamps do not create jobs, and at best only serve to keep some minimal level of economic activity going during down times.

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14 Responses to Food Stamps Do Not Increase Employment

  • MichaelWIf the “food stamps = job creation” were correct, how did we lose all of those jobs?

    You aren’t looking at this in the right way.  Think about how many MORE jobs would have been lost had Uncle Sugar not been passing out all those food stamps!
    / sarc

    • By that logic, these people eating more were then pooping more and creating jobs by increasing the demand for toilet paper.
      /sarc :-)

      • That actually makes more sense than simply claiming that food stamps = jobs created.  Maybe you can suggest it to Rosenberg to provide at least a semblence of credibility to his thesis!

  • Are you saying that if we put everyone on food stamps we WON’T be able to pay off the national debt?  But the return on their chart as I recall showed something like a return of $3.00 for every dollar spent on food stamps (or was it unemployment…one or the other).  We’d be insane NOT to spend the money!

    I’ll bet you let facts get in the way of our plan….AGAIN.  But that can’t be, because according to a piece I read recently, Liberals are ‘fact based” and conservatives are ‘driven by emotions’.    Who knew?

  • So if we do all four, there will suddenly be ~35M more jobs or is this one f those Venn diagrams with the intersection of sets? !

  • what we need are beer stamps.

  • Isn’t it funny that since jobs and unemployment have become an issue, no one goes near the topic of institutionalizing and decriminalizing illegal immigration anymore. 

  • If the “food stamps = job creation” were correct, how did we lose all of those jobs?

    You just don’t know Democrat math, do you Michael? It’s the saved jobs those 7 million new food stamp recipients are responsible for – millions and millions of saved jobs. How many million? How many do you want it to be?

  • And these people are running our government. It makes me cry.

  • A little mental exercise.

    Food stamps = subsidies to farmers = I dunno. Farms have pretty fixed equipment costs. They aren’t going to buy more tractors and equipment, since they are already overproducing staple crops, such as corn and wheat. And factory farms are…well farms run like factories. They should have enough slack in their systems to handle an increase in demand for meat, dairy and eggs.

    Maybe…maybe…increase in food stamps will lead to hiring of more migrant workers for hard to automate crops. But, then again, people with EBT cards seem to go for more preprocessed foods than anything else. (Not that their is much wrong with that. I’d suspect that in a functional home with both parents working and several children, that those qualifying for food subsidies are probably stuck with crappy jobs with bad working hours.)

  • Would you mind giving me your last name? I am writing a research paper about how governments should not issue food stamps and I would like to use your page as one of my source. Thank you.