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Food Stamps

The Economic Impact of Food Stamps at the Local Level

Current threats to SNAP

Under the directions of the President, US administrations are planning billions of dollar cuts from anti-poverty programs for low-income families including Supplemental Nutrition Assistance Program (SNAP) formerly known as Food Stamps.

The President proposed $220 billion cuts to SNAP in the budget for the financial year 2020, while he suggested the other programs like Medicare and Social Security also to suffer massive cuts of $845 billion and $25 billion respectively. Fortunately, the CONGRESS is divided on these proposals and it unlikely that these plans get through. The GOP allies, though, shared his views about the negative impacts of the assistance programs, and the same narrative is being used by the current administration to harden the eligibility criteria for these welfare initiatives.

Study by the Department of Agriculture

A new finding in research named “The Impacts of Supplemental Nutrition Assistance Program Redemptions on County-Level Employment” conducted by the US Department of Agriculture government enormously opposed this narrative. Economists involved in the study found that government funding SNAP has been fairly pretty effectual in motivating the economy since the start of the Great Recession. More precisely, the spending has been most helpful in serving rural Americans, those who tremendously supported Trump in the 2016 election.


Another finding suggests that one job was created on every $22,000 spent on the program, from 2001 to 2014, at a time when jobs were opportunities were rare. So the total spending of $ 70billions a year reflected positive growth in the jobs’ market.

Simultaneously money was pumped in the rural supermarkets and other small scale businesses on account of the grocery subsidies offered to low-income households under this program.

Food Stamps Support to Economy During Recession

And here’s another surprising conclusion from the report: $70 billion SNAP spending was the single most beneficial spending for the economy of the United States more than any other spending i.e. infrastructure development of defense spending.

The direct payments to the beneficiaries under SNAP instead of releasing grants to contractors of States actually helped to create jobs during years of Recession, the economists of USDA reported.


The report in question reflects the first ever analysis by the government to minutely evaluate the economic and financial impact of the Food Stamp Program at the grass root level. There is also substantiation that these food subsidies had a negative impact on city jobs before the deep recession that started from 2007, but the trend changed after that as food assistance program helped protract jobs at agriculture farms, supermarkets, and transportation companies.

The Food Assistance Programs Helped Keeping People out of Poverty

  • The said report also authenticated that the Democrats and other progressive policy-making groups have long been supporting the large scale anti-poverty assistance programs and argued that such initiatives are in no manner a burden on the economy rather they have a positive impact.
  • Statistics revealed that during the first year of the current administration, income from the safety net programs including SNAP kept over 45 million Americans people above the poverty line. This number further increased by almost 200,000 when compared to 2016.
  • Until now the President and the Republicans in Congress have not been able to implement their proposed cuts on safety net programs, due to the opposition from the House Democrats whose votes they needed to pass an annual budget.
  • Different social safety net programs have different size of impact in economic impact, for example, Social Security kept 27 million people above the federal poverty level. Refundable tax credits helped another 8.3 million people. SNAP, on the other hand, supported nearly 45 million low-income Americans in 2017, lifting 3 million of them out of poverty.

Administration’s Viewpoint

  • In the presence of the factual statistics, the White House still maintains the argument that although there have been some positive impacts are observed, relatively less success is attained in supporting the self-sufficiency among masses receiving benefits under these social programs for years.
  • To further highlight the negative impacts of the safety net programs including SNAP, the White House Council of Economic Advisers argued in a statement in 2018, that the Employment rates have remained relatively small and people’s dependency on these programs has increased.
  • The Administration’s version keeps getting stiffer to protect as new research discredits the assertion.


  • The reflection that welfare programs are a cause of keeping people from working is a deeply well-established belief within the GOP (Republicans) but research shows that there is a small scale of inducement to avoid working, as social programs already have work rules.
  • For example, SNAP requires well-bodied recipients without children to work 80 hours a month or prove they’re meeting other related requirements in order to qualify.
  • Some experts reviewed the research on forcing the beneficiaries to work to trade for benefits, which has already been experimented in many states. Such obligations increased the employment among participants in a little percentage because most beneficiaries were employed. And experts concluded that the obligation to work in exchange of benefits didn’t do much to lift people from poverty:
  • Work compulsions scarcely caused poverty rates to go down, due to the fact that even working poor weren’t earning enough to elevate themselves out of poverty. In addition, it was found in the study at half the experiment locations, work requirements resulted in more people to be in deep poverty.
  • Many other studies conducted by different institutes and groups also supported the hypothesis that helping millions of children on low-income American families under SNAP during their school years will sure lift their earning power as adults.
  • The research proved that according to the data of Census Bureau SNAP lifted 8.4 million people — including 3.8 million children — above the poverty line in 2015 alone. This was in addition to lifting 2.0 million children out of “deep poverty” (defined as incomes below half of the poverty line) in 2015, more than any other government assistance program.
  • The food assistance program also lifted more households with children out of “extreme poverty” —having an income of less than $2 per person per day — than any other government program.
  • The rationale of SNAP’s being so successful in fighting poverty is that it focuses on most vulnerable families al local level.
  • Statistics reflect that around 92 percent benefits go to those at or below the poverty line, 56 percent goes to those below half of the poverty line (that is, below $840 a month for a family of three in 2016).


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