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Want to Cut Food Stamp Costs? Raise the Minimum Wage

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.
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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 and 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 percent of the population -- live in poverty. That is 2.5 percent 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 percent of the population. Median incomes for most Americans have been stagnant, while incomes for the wealthiest among us have exploded.

Today the top 1 percent of earners receives almost 20 percent of the income -- the highest percentage since 1951. Since we began recovering from the Great Recession, family incomes for those in the top 1 percent have risen a whopping 31 percent, while those for the rest of us have increased only .04 percent.

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 percent 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 U.S. 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 percent 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.

Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on He is a partner in Democracy Partners and a Senior Strategist for Americans United for Change. Follow him on Twitter @rbcreamer.

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