Sep 18th 2013

Want to Cut Food Stamp Costs? Raise the Minimum Wage

by Robert Creamer

Robert Creamer is a long-time political organizer and strategist and author of the recent book: "Stand Up Straight: How Progressives Can Win," available on amazon.com.
This week the Tea Party House Republicans plan to bring a bill to the floor that would slash funding for food assistance to poor families.  The program used to be known as “food stamps.”  Now it is called the Supplemental Nutritional Assistance Program (SNAP).
 
The Republican bill would eliminate food assistance for many low-income seniors low-wage families, even those with children. And millions of unemployed workers would lose assistance, even though they are looking for work but can’t find a job.
 
Recently the Census Bureau published a new report showing that 46.5 million Americans – 15% of the population – live in poverty.  That is 2.5% higher than before the Great Recession caused by the speculative greed of the Big Wall Street Banks.  The poverty rate has returned to levels of the 1960’s when the War on Poverty was launched.   One in five children live in poverty. What a great time to cut food assistance to the poor.
 
But the Republicans say we “can’t afford all of these federal programs.”  They say we are living in a “time of scarcity.”  People who say that are either completely ignorant of the facts or intentionally lying.
 
In fact, America has a higher per capita gross domestic product (GDP) than at any time in its history.  As a nation we have never been richer.  The problem is that for most of the last four decades all of that growth in income has gone to the top 2% of the population.  Median incomes for most Americans have been stagnant, while incomes for the wealthiest among us have exploded.
 
Today the top 1% of earners receives almost 20% of the income – the highest percentage since 1951.  Since we began recovering from the Great Recession, family incomes for those in the top 1% have risen a whopping 31%, while those for the rest of us have increased only .04%.
 
The Forbes 400 issued a report this week showing that the wealthiest 400 Americans are significantly richer in 2013 than they were last year.  In fact, their total wealth soared 19% in the past year to $2.02 trillion.  In other words, each of these 400 wealthiest Americans had fortunes averaging $5 billion.  To get on the list, you now have to be worth at least $1.3 billion.
 
And the wage stagnation of ordinary people isn’t – as Republicans imply -- because of a lack of worker effort.  American workers’ productivity per hour has increased.  The average worker has a higher level of educational attainment, and workers work longer hours. 
 
The reasons that the rich are getting a larger and larger share of our incomes  are clear:
 
·      A lower real federal minimum wage;
·      Laws and policies that have weakened the ability of workers to organize to demand higher wages;
·      Trade policies that have favored the rights of investors over the rights of workers;
·      And policies that have cut funding for public services – such as the sequester – that virtually every independent economist agrees have slowed economic growth.
 
Bottom line is the Republicans want to take food from the mouths of hungry children so they don’t have to close tax loopholes for the rich and large corporations – even though the incomes of the wealthy and profits of big corporations are exploding and taking a bigger and bigger share of our common economic pie.  That is a new moral low.
 
Of course in the richest country on earth we can “afford” to make sure that no child goes to bed hungry.   Of course we can “afford” to make sure that seniors who have worked – often at menial, backbreaking jobs their entire lives – have enough to eat. 
 
Let’s look at some of the lawmakers supporting these cuts.  There’s Darrell Issa of California who, according to Congressional disclosure documents is worth $355.8 million – and last year made $125 million – mostly on investment income.  Or there’s Vern Buchanan of Florida --worth $31 million; or Robert Pittenger of North Carolina – worth $27.68 million; or Chris Collins of New York – worth $22.26 million; or Jim Risch of Idaho – worth $19.18 million; or Gary Miller of California – worth $17.81 million; or John Fleming of Louisiana – worth $10.78 million.  Probably not even tough to make it on Blake Farenthold’s measly $7.74 million of assets.
 
And it’s not just the unfairness.   Cutting food assistance to the poor hurts us all economically.  The fact is that the economy grows if everyday people have money in their pockets to buy goods and services.
 
Economists have found that food assistance is the single most effective form of stimulus dollars for the economy.  Mark Zandi, chief economist of Moody’s Analytics has calculated the multiplier for food stamps is 1.73.  That means that for every 10 dollars of food stamp spending, the GDP increases by $17.30. 

That’s because 
virtually every dime of food stamp spending is actually spent on goods and services that generate economic demand for businesses and the services of other workers.  People use food stamp dollars to buy food.  They don’t save it, or invest it in an offshore Cayman Island account. The so-called “multiplier” effect is higher for food assistance than almost any other form of spending.  That means that every dollar spent on food assistance helps create new jobs.  In fact, the US Department of Agriculture estimates that every billion dollars of food stamp spending creates 10,000 jobs.

Some people might argue that it is just another reason why Republicans are happy to cut food assistance – because they seem to be willing to do anything they can to sabotage the economy.
 
But the real dirty secret of food stamps, is that the primary beneficiaries are often giant corporations who pay their employees poverty wages, counting on food stamps, Medicaid and other forms of government assistance as indirect subsidies to their wealthy stock holders.
 
In fact, the quickest way to cut food assistance spending would be to raise the minimum wage to assure that no one who worked full-time would live in poverty. 
 
Right now companies like McDonald’s, Walmart, and many others actually pay many full-time workers wages so low that they live in poverty and qualify for food stamps.   That’s an outrage.
 
Today a full-time worker making the Federal Minimum Wage of $7.25 per hour makes $14,532 per year.  Try supporting a family – or even just yourself – on that.
 
And the minimum wage has shrunk in buying power. Right now, if the minimum wage had as much buying power as it did in 1968, it would provide workers 50% more income.
 
So instead of cutting food stamps for people who are being paid poverty wages by Walmart, Congress can cut food stamp spending – very directly – by raising the minimum wage and requiring companies like Walmart to pay a living wage that allows employees to feed their children.
 
That would save the taxpayer’s money and it would strike a major blow against the pervasive income inequality that is the chief enemy of our economic future.
 
But of course, the same Republicans who want to slash food assistance, oppose raising the minimum wage.  In other words they support the notion that big companies should be allowed to pay their full-time poverty wages.
 
So the next time you hear a Republican Congressman pontificating about how we can’t afford to pay for “takers”  -- presumably poor seniors and hungry children – tell him to lift himself out of his deck chair by the country club pool where his every whim is catered to by a low-income waiter.  Tell him to hustle on down to McDonald’s and try slinging hamburgers for a week and see if he can live on $290 gross pay – or $217 if he only gets 30 hours like many workers.  
 
Tell him to get up early to catch the bus, because he can’t afford that big car he drives.  And tell him to give up his big house and pack his family into a tiny apartment.   And while he’s at it tell him to see if he can eat healthy foods on a food stamp diet – of $4.50 per day.  
 
Then maybe he’ll decide that the best way to cut food stamp spending is to end poverty.  And a good start would be to raise the minimum wage.
 


Browse articles by author

More Current Affairs

Mar 31st 2023
EXTRACT: "Although the EU will have gained more internal stability, its basic character will have changed. Security will be a central concern for the foreseeable future. The EU will have to start thinking of itself as a geopolitical power and as a defense community working closely with NATO. Its identity will no longer be defined mainly by its economic community, its common market, or its customs union. The bloc has already accepted Ukraine as a candidate for future membership, and that decision was driven almost entirely by geopolitical considerations (as was also the case, previously, with Turkey and the West Balkan states)."
Mar 30th 2023
EXTRACT: "As I have long warned, central banks ..... will likely wimp out (by curtailing monetary-policy normalization) to avoid a self-reinforcing economic and financial meltdown, .... "
Mar 30th 2023
EXTRACT: "Netanyahu is simply unfit to be prime minister of Israel. He is a liar, a schemer and a fraud. If he has an ounce of integrity left in him, he should resign and save the country instead of stopping short of nothing, however evil, to save his skin."
Mar 29th 2023
EXTRACTS: "Though Mao Zedong viewed himself as Joseph Stalin’s peer, leading the world’s peasant communists as Stalin led its proletarians, behind closed doors Stalin reportedly called Mao a “caveman Marxist” and a “talentless partisan.” " ----- "Stalin’s behavior enraged Mao." ---- "When ..... Khrushchev, took over as Soviet premier following Stalin’s death in 1953, Mao paid back for Stalin’s disdain – and then some. On his return from his trip to Beijing in 1958, Khrushchev talked incessantly about how unpleasant his experience had been." ---- "Even if Xi did not have the upper hand before Russian President Vladimir Putin launched his war of choice in Ukraine, he certainly has it now..." --- "So, when Xi arrived in Moscow ..... he carried himself with an air of superiority, whereas Putin’s expressions appeared strained."
Mar 27th 2023
EXTRACT: "The spectacular collapse of Silicon Valley Bank (SVB) – the second-largest bank failure in US history – has evoked memories of the 2008 collapse of Lehman Brothers, which sparked the worst economic crisis since the Great Depression. But the current situation is, at least for Germans and other Europeans, more reminiscent of the “founder’s crash” (Gründerkrach) of 1873. Then, as now, an era of cheap credit had fueled a tech boom and then triggered a banking crisis. In those days, the startups were in railroads, electronics, and chemistry, but there were also a large number of financial startups rising with the tide. In both cases, the crisis was rooted in bad accounting rules that turned the financial system into a playground for gamblers."
Mar 16th 2023
EXTRACT: "Putin is desperate for a ceasefire, but he does not want to admit it. Chinese President Xi Jinping is in the same boat. But US President Joe Biden is unlikely to jump at this seeming opportunity to negotiate a ceasefire, because he has pledged that the US will not negotiate behind Zelensky’s back. -- The countries of the former Soviet empire, eager to assert their independence, can hardly wait for the Russian army to be crushed in Ukraine. At that point, Putin’s dream of a renewed Russian empire will disintegrate and cease to pose a threat to Europe. -- The defeat of Russian imperialism will have far-reaching consequences for the rest of the world. It will bring huge relief to open societies and create tremendous problems for closed ones."
Mar 15th 2023
EXTRACT: "Fifty years ago, a war broke out in the Middle East which resulted in a global oil embargo.... " ---- " Many historical accounts suggest the decade of global inflation and recession that characterises the 1970s stemmed from this “oil shock”. But this narrative is misleading – and half a century later, in the midst of strikingly similar global conditions, needs revisiting." ----- "In early 2023, the global financial picture feels disconcertingly similar to 50 years ago. Inflation and the cost of living have both risen steeply, and a war and related energy supply problems have been widely labelled as a key reason for this pain." ---- "In their public statements, central bank leaders have blamed this on a long (and movable) list of factors – most prominently, Vladimir Putin’s decision to send Russian troops to fight against Ukrainian armed forces. Anything, indeed, but central bank policy." ---- "Yet as Figure 1 shows, inflation had already been increasing in the US and Europe long before Putin gave the order to move his troops across the border – indeed, as far back as 2020."
Mar 7th 2023
EXTRACT: "The United States is in the midst of a book-banning frenzy. According to PEN America, 1,648 books were prohibited in public schools across the country between July 2021 and June 2022. That number is expected to increase this year as conservative politicians and organizations step up efforts to censor works dealing with sexual and racial identity."
Feb 28th 2023
EXTRACT: "As was the case before World War I, it is tempting to minimize the risk of a major conflict. After all, today’s globalized, interconnected world has too much at stake to risk a seismic unraveling. That argument is painfully familiar. It is the same one made in the early twentieth century, when the first wave of globalization was at its peak. It seemed compelling to many right up to June 28, 1914."
Feb 19th 2023
EXTRACT: "Another front has opened in the global rise of populist authoritarianism. With their efforts to weaken Israel’s independent judiciary, Prime Minister Binyamin Netanyahu and his corrupt coalition of Messianic fascists and ultra-Orthodox allies are determined to translate their anti-democratic rhetoric into authoritarian policy."
Feb 17th 2023
EXTRACT: "One year on from the start of a military operation that Moscow was expected to win easily, there are increasing signs of anger, frustration and resistance from ordinary Russian soldiers. These are important reminders that these men are not mindless pawns who will do Putin’s bidding under any circumstances."
Feb 16th 2023
EXTRACT: "Over the past few days, more details have emerged about the alleged Russian plot in Moldova. Apparently, well-trained and well-equipped foreign agents were meant to infiltrate the ongoing protests, then instigate and carry out violent attacks against state institutions, take hostages and replace the current government. This may seem far-fetched, but is it? Yesterday, Moldova denied entry to Serbian soccer fans who had planned to support their team, FK Partizan Belgrade, in a Europa Conference League match against the Transnistrian side Sheriff Tiraspol. ---- " ..... there is a history of Serbian football hooligans being involved in paramilitary activities, including war crimes committed by the notorious Arkan Tigers during the war in Bosnia in the early 1990s. Moreover, Russia attempted to overthrow the Montenegrin government in October 2016, just ahead of the country’s Nato accession the following year, in a plot eerily prescient of what was allegedly planned recently in Moldova.
Feb 14th 2023
EXTRACT: "As the British novelist L.P. Hartley once wrote, the past is “a foreign country: they do things differently there.” Alas, this does not mean that we necessarily do things better now. But to understand that lesson, we have to follow Santayana’s advice, and study history very carefully.."
Feb 7th 2023
EXTRACT: "Others who have left Russia include tens of thousands of the country’s excellent computer scientists, whom the armament industry desperately needs. In fact, so many Russians have emigrated to neighboring countries that Armenia expects its 2022 GDP growth to come in at a whopping 13%. Unlike oil fields, this is capital that Putin cannot nationalize or seize."
Feb 6th 2023
EXTRACTS: "Under these circumstances, Ukraine’s allies are right to scale up their military assistance, including by providing battle tanks. The goal is for Ukraine to prevail against its aggressor. But we cannot wish for that end without giving Ukraine the means to achieve it. The alternative is a prolonged war of attrition, leading to more deaths in Ukraine, greater insecurity for Europe, and continued suffering around the world (owing to Russia’s weaponization of energy and food supplies)." ---- "And make no mistake: the sanctions are working. Russian oil is selling at a $40 discount to Brent, and its daily energy revenues are expected to fall from around €800 million to €500 million after our latest measures kick in this month. The war is costing the Kremlin dearly, and these costs will only rise the longer it lasts."
Feb 6th 2023
EXTRACTS: "Brezhnev, in power from 1964 to 1982, signed the 1975 Helsinki Accords, together with the United States, Canada, and most of Europe. Eager for formal recognition of its borders at the time, the USSR under Brezhnev, together with its satellite states in Central and Eastern Europe, underestimated the potential impact of the Accords. That is probably why it agreed to include commitments to respect human rights, including freedom of information and movement, in the agreement’s Final Act." --- "Putin’s regime is turning its back on the legacy of Soviet dissent. Worse, it is replicating the despotic practices of Brezhnev and Soviet totalitarianism. If it continues on this path, it risks ending up in the same place."
Feb 5th 2023
EXTRACT: "....when countries like Saudi Arabia, Egypt, and, above all, China flagrantly violate their citizens’ human rights, liberal democracies must unite to constrain their behavior. Ultimately, it is up to those of us who believe in the universality of human rights to expose crimes against humanity and to uphold liberal-democratic values in the face of authoritarian threats" --- "....liberal democracies have a shared responsibility to support the Ukrainians fighting to defend their homeland and to protect their rights to self-determination and statehood in the face of Russian aggression."
Jan 14th 2023
EXTRACT: "On balance, then, the events in and around Soledar over the past week illustrate that no matter the outcome of the current fighting, this is not a turning point. It’s another strong indication that the war is likely going to be long and costly."
Jan 14th 2023
EXTRACTS: "Russian President Vladimir Putin has long regarded the collapse of the Soviet Union as a “geopolitical catastrophe.” The invasion of Ukraine, now approaching its one-year anniversary, could be seen as the culmination of his years-long quest to restore the Soviet empire. ..... "With Russia’s economy straining under Western sanctions, some of the country’s leading economists and mathematicians are advocating a return to the days of five-year plans and quantitative production targets." .... "The logical endpoint of a planned economy today is the same as it was then: mass expropriation. Stalin’s collectivization of Soviet agriculture in the late 1920s and early 1930s led to millions of deaths, and the post-communist 'shock therapy' of privatization resulted in the proliferation of 'raiders' and the creation of a new class of oligarchs. Now, enthralled by imperial nostalgia, Russia may be about to embark on a new violent wave of expropriation and redistribution."
Jan 11th 2023
EXTRACT: "These developments suggest that Indian economist Amartya Sen was correct when he famously argued in 1983 that famines are caused not only by a shortage of food but also by a lack of information and political accountability. For example, the Bengal famine of 1943, India’s worst, happened under imperial British rule. After India gained independence, the country’s free press and democratic government, while flawed, prevented similar catastrophes. Sen’s thesis has since been hailed as a ringing endorsement of democracy. While some critics have noted that elected governments can also cause considerable harm, including widespread hunger, Sen points out that no famine has 'ever taken place in a functioning democracy.' --- China’s system of one-party, and increasingly one-man, rule is couched in Communist or nationalist jargon, but is rooted in fascist theory. The German jurist Carl Schmitt, who justified Adolf Hitler’s right to wield total power, coined the term “decisionism” to describe a system in which the validity of policies and laws is not determined by their content but by an omnipotent leader’s will. In other words, Hitler’s will was the law."