To stimulate the economy, increase food stamp participation rates

Jill Richardson’s post on extremely low food stamp participation rates in San Diego got me wondering how well Iowa does in getting eligible people enrolled in this program.

Bleeding-heart liberal that I am, I’d like to see 100 percent of people who qualify for food stamps get them, just for the sake of reducing hunger in our communities.

But let’s leave ethical concerns aside for now. Economic researchers, most recently Moody’s, have calculated that expanding the food-stamp program produces more economic stimulus than any other kind of government spending, and much more than any form of tax cuts.  Every additional dollar spent on food stamps translates into $1.73 circulating in the economy.

This page on the U.S. Department of Agriculture’s website contains links to many studies comparing the state participation rates for the Supplemental Nutrition Assistance Program (the official name for the food stamp program). All of the recent annual reports are pdf files you can download.

The report for 2004 put Iowa in 22nd place for food stamp participation and estimated that 61 percent of the 286,000 people eligible for food stamps were receiving them.

The report for 2005 ranked Iowa 24th and estimated that 66 percent of the 307,000 people eligible for food stamps were receiving them.

The report for 2006 ranked Iowa 20th and estimated that 71 percent of the 309,000 people eligible for food stamps were receiving them. Data for 2007 and 2008 are not yet available on the USDA site.

As you can see, Iowa is doing a little better at getting food stamps to the people who qualify for them, but we have a long way to go to match the states near the top. In the top three states, more than 90 percent of people eligible for food stamps are getting them. That figure is above 80 percent for the next five states.

Increasing Iowa’s food stamp enrollment rate from 71 percent to 80 percent would translate to nearly 30,000 more people receiving food stamps in our state. If we could get food stamp participation above 90 percent, roughly 60,000 more Iowans would be receiving food stamps. Those people would consequently have more to spend on other goods and services. Many retailers would benefit as the money flowed through the economy.

I don’t know exactly what needs to be done to further improve Iowa’s food stamp participation rate. There’s a lot of research on the USDA site on factors that affect enrollment. I would welcome comments or a diary from someone with expertise in this area about what Iowa’s doing well already and what we need to do better.

Given the multiplier effect of food stamp benefits on economic activity, this program merits attention from policy-makers looking to stimulate the economy. Government spending on infrastructure projects is worthwhile (as long as we fix what we have first), but let’s not ignore other efficient ways of sparking more economic activity.

To my conservative readers who start hyperventilating at the thought of more people receiving government assistance: don’t think of it as extra food for families struggling to get by. Think of it as a fast way to save jobs in the retail sector–with a lot more bang for the buck than tax cuts.  

  • That would be wonderful, DM!

    However, food stamps cause there own problems.

    My faith in the system was broken when I worked in a grocery store and checked out people using food stamps.

    I would estimate that roughly 6 in 10 bought junk food, candy, and soda exclusively, than use cash to buy ciggerettes. I believe it would be worthwhile to limit purchasing power to US made goods and some sort of special allowance on local goods, if that is possible, or at least something of nutritional value.

    Because, after all, their is also an obesity crisis in America.

    • it's a complicated issue

      A lot of times the junk food is the cheapest food in the supermarket. Getting Americans to make healthier food choices is important, but I don’t know how realistic it is to micromanage which foods in the supermarket people can use food stamps for.

      That said, I know people who have been on food stamps while their kids were young, and they could not have gotten by without them.

  • Well, I WAS on Food Stamps

    For a while anyway.  I had cancer in 1995, was a single father raising a fifteen year old at the time.  I worked just under thirty-two hours at the UofI and had no health benefits.

    And I certainly didn’t have enough money in the bank to pay for surgery, radiation, and chemo.

    I’m sure folks would have raised an eyebrow at the food I bought at that time.  It was all simple prep foods, ultra high calorie, and I bought a lot of microwaveable meals.

    I honestly didn’t have the energy to cook, and I needed calories to put the weight back on (when I could keep the food down).

    And yes, I used my general assistance check to buy cigarettes.  And expensive basketball shoes so my kid could play on the varsity squad. Oh, and I also bought toilet paper. I’ve tried newspaper and other alternatives, but let’s face it, when the chips are down, I tend to get a bit bougie.

    I had a social worker case worker looking over my shoulder all the time to make sure I was taking good care of my kid.

    And I resented the hell out of the intrusive nature of it.

    Even though I can objectively understand where this social worker was coming from, there was still this notion that I had done something wrong if I needed assistance. After all, good, decent hardworking people don’t allow themselves to get into that position.

    Right now, with the way this economy is going, we need to disassociate ourselves of that notion.  And we need to educate folks to the idea that it’s ok to ask for help, especially if you have youngsters at home, or if you need help to even keep your home.

  • My family survived on food stamps.

    I’m the youngest in a large family and, when he was 42 and I was five, my dad had bypass surgery – an early patient in the cardiac bypass program at the UofM in Minneapolis.  My mom made the six hour trip between there and my hometown for weeks to tend to him and to her family back home, relying on my oldest sisters and family friends to make sure there was adequate care and supervision of the young ones while she was away.  My dad worked two, sometimes three, jobs to provide for us.  While he was out of work, you bet we got food stamps.  We spent them at the tiny, family-owned grocery store down the block and, I’m guessing that if it hadn’t been for our family, that store might have gone out of business years before it actually did.

    I know there are lots of abuses, but there are too many families depending on the program to throw the baby out with the bath water.  And I agree that increasing participation rates should be a priority.  

    (Does anyone know if the farmers’ markets are equipped and able to accept food stamps?  The market in our previous city made that change while we lived there, and their vendors saw a sizable uptick in foot traffic after the change was made.)

    • there is a program

      to let people use food stamps at farmers’ markets in Iowa (at least some of them). I don’t think it’s being utilized to the full extent possible, but the state government was moving in that direction. Obviously we want to make it possible for people on food stamps to buy fresh, local, healthy food.

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