We’ve been seeing the unemployment numbers slowly get better, a sign of a recovering economy that many of us thought would never arrive. After the Great Recession, a devastating event that shook this country to its core, we all knew the road to recovery would be a tough one, but it was a path we had to take. Now, years later, things are finally turning up: middle class jobs are coming back, the Fed isn’t providing stimulus to the economy the way it once did, and unemployment numbers are dropping. However, one puzzling statistic keeps jumping out: food stamps use is continuing to increase. Why is this, and what should we make of this seemingly opposite push-and-pull?
Where We’re At Today
Last month for July 2014, the national unemployment rate in the country jumped a smidgen up to 6.20%, which represented a gain from June 2014’s rate of 6.10%. However, this change is about as miniscule as you can get, and is certainly nothing to be worried about. What is worrisome, though, is that it’s higher than the record low of 2.50% we had in May 1953, as well as being higher than the almost 60-year run we enjoyed of 5.83% from 1948 to 2014. For reference’s sake, the highest high we’ve ever experienced came in November 1982 when the unemployment rate was 10.80%, which is reassuring to know that no matter how bad the recession was, we still didn’t mark a new record.
This tiny difference in unemployment rate between June and July came about simply because more people entered the workforce, balancing out the numbers. When looking at July both now and 12 months ago, we can see that the unemployment rate has decreased 1.1 percentage points, for a total of 1.7 million people. However, the long-term unemployment rate (jobless for 27+ weeks) remained unchanged at 3.2 million in July, with this portion accounting for 32.9% of all unemployed people.
According to the US Department of Agriculture, food stamps usage in households accounted for 20% of all households. Comparing the usage from the fiscal years in 2013 and 2012, there were 23 million households on food stamps in any average month, which marked an increase of 722,675 from last year (a total of 22.3 million households).
It’s a little puzzling, then, to see these numbers be so diametrically opposed. If more people have jobs and jobs pay them money and money allows them to afford things like food, then why are we seeing food stamps usage go up?
How to Add Up the Numbers
One of the things that becomes clearest most immediately is how to define this problem. What many articles fail to mention is there’s a very clear difference between having a job and having a job that pays sustainably well, and therein is a huge difference. Just because the unemployment rate is dropping and more people are getting work doesn’t mean that the kind of work they’re getting is necessary and sufficient to stock their cupboards with groceries.
Some states, like New York, have recognized this and kicked in their own money so households can qualify for extra assistance (i.e. the Heat and Eat “loophole”). Previously, some states required giving recipients only $1 in aid so they could get higher food stamps benefits, but since that’s been removed from the newest Farm Bill.
And at the end of the day, it’s still going to take a bit more time to balance out the scales and see an inversely proportional relationship between the unemployment rate and usage of food stamps. In theory, more jobs should mean less reliance on food stamps, but what matters most is the kinds of jobs people are working. It’s no use breaking your back for 60 hours a week when you’re not making as much as an upper middle class earner who works 35, and that’s one of the biggest reasons for this current imbalance.