Sector News

Food-Stamp Use Starting to Fall

September 2, 2014
Food & Drink

As the Job Market Improves, More Americans Are Able to Wean Off the Program

After soaring in the years since the recession, use of food stamps, one of the federal government’s biggest social-welfare programs, is beginning to decline.

There were 46.2 million Americans on food stamps in May, the latest data available, down 1.6 million from a record 47.8 million in December 2012. Some 14.8% of the U.S. population is on the Supplemental Nutrition Assistance Program, or SNAP, down from 15.3% last August, U.S. Department of Agriculture data show.

Food-stamp use remains high, historically speaking. The share of Americans on the benefit—which lets them buy basics like cereal and meat and treats like cookies, but not tobacco, alcohol or pet food—is above the 8% to 11% that prevailed before the financial crisis.

One beneficiary-turned-former-beneficiary is Louis Alexander. Mr. Alexander turned to food stamps last year after losing his job as a maintenance man. A year later, he is working again—as a truck driver for a company near his home in Louisville, Ky.

He credits food stamps for helping him eat and pay his other bills while job searching.

Now, eager to be a “giver,” not a “taker,” the 53-year-old has stopped collecting stamps and is socking away savings. Before his latest haul, he bought his girlfriend an engagement ring. “Everything fell right into place,” he said. “I feel like I’m the luckiest man in the world.”

Declining use of food stamps is a positive signal for the economy. It suggests that recent improvements in labor markets are reaching more Americans, especially lower-income ones. If more Americans have cash, that could fuel spending, a primary driver of the economy. For years, the recovery has been disappointing, partly because weak growth in inflation-adjusted wages has limited consumer demand for goods and services.

“In the last four, five months, we have seen a pretty steady drop,” said Ed Bolen, senior policy analyst at the Center on Budget and Policy Priorities, a Washington, D.C., think tank.

And experts expect enrollment and costs to keep falling: As more Americans find jobs and collect paychecks, fewer will be eligible, lowering program costs. The Congressional Budget Office sees food-stamp costs—now running at $80 billion, or 0.5% of gross domestic product—returning to 1995 levels around 0.35% as a share of GDP in five years.

SNAP rolls are contracting in most states, including Kentucky, where Mr. Alexander lives. The state saw a 6.1% drop in people enrolled in SNAP in May versus a year earlier. Roughly 136,000 people are on SNAP in Jefferson County, where Louisville is located, down from 139,000 in the state’s previous fiscal year, officials say.

“More people are starting to report that they have just recently been hired” and have pay that is reasonable enough to make them ineligible, said Alba Brookins, who helps run Jefferson County’s SNAP program. “Any decrease [in SNAP] is significant, because it had been on the increase for so long.”

A decline would be welcome in Washington, where food stamps have been a political lightning rod among lawmakers. Proponents say they help low-income people get back on their feet and stimulate the economy, while critics say they foster dependence on the government and seek to cut them.

But plenty of new people seek assistance each month. And changes to SNAP likely will keep rolls from dropping back to the levels of previous decades. States have expanded their outreach to get more people to apply for SNAP, which the federal government pays for. Eligibility requirements have eased, and a much bigger share of those eligible now enroll.

Kenneth Taylor, a veteran of the first Iraq war, had to leave his job in shoplifting prevention in a store this spring after being diagnosed with cancer.

The 47-year-old, who lives near Indianapolis, also recently separated from his wife. He is collecting $400 a month via stamps to feed his three children, ages 10, 11 and 12, and recently sold his gun collection for about $1,000. “I haven’t been out of a job for 30 years,” he said. “This is the first time I’ve ever had to be on any kind of public assistance.”

While exact requirements vary by state, a would-be participant’s household generally must have a “gross income” that is at or below 130% of the federal poverty line, which is $23,492 for a family of four, and “net income”—income minus things like high housing costs and medical expenses for elderly family—that is 100% of the federal poverty line or below.

Looser “asset” tests, however, mean some Americans with savings in the bank are eligible that wouldn’t have been years ago.

Despite all the factors pushing up SNAP participation, food-stamp use is starting to fall, largely because more Americans are becoming ineligible as their incomes grow, government and budget experts said. The expiration of some expanded benefits last fall is another factor.

In May, SNAP participation fell in 43 states compared with a year earlier, while rates of growth in other states have slowed considerably.

In Arizona, the number of people enrolled fell 7%; in South Carolina, 6.2%. Nationally, SNAP rolls dropped 3% in May from a year earlier. (States such as North Carolina and Georgia have seen outsize drops, but largely due to state-specific quirks, including SNAP processing backlogs. Such drops aren’t driving the national decline in SNAP rolls, experts said.)

For Jessica Singh, an unmarried mother who stopped using food stamps this spring, things are generally looking up.

After being dependent on SNAP for over two years, the 26-year-old in Fort Wayne, Ind., got a degree in human services, found internships and has landed two part-time jobs, including one at a domestic-violence shelter. Food stamps “definitely gave me a sense of stability,” she said. “You know there is going to be food on the table.”

And yet it isn’t easy going without SNAP’s safety net. If her 2-year-old gets sick and Ms. Singh can’t work, her income takes a hit. Last month, Ms. Singh visited a food pantry for the first time, picking up free boxes of pancake mix, cereal and Hamburger Helper, along with toilet paper. She said she will go earlier next time; by the time she got there during her first trip, items like bananas and hamburger meat were gone.

By Neil Shah

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