3 reasons why work requirements for food stamps are a bad idea
Thanks to an obscure part of the 1996 law that re-worked the country's welfare system, about one million Americans will probably lose food assistance by the end of 2016.
The Supplemental Nutrition Assistance Program (SNAP) — colloquially known as food stamps — was altered by the law so that unemployed adults who are not disabled or raising children can only receive assistance for three months. After that, they must find at least 20 hours of work a week or be cut off. (Work training programs can also count, but only five states offer them.)
The law waived these requirements in the aftermath of the 2008 economic collapse, and states were happy to go along. But now that unemployment rates are falling, several governors have already allowed the requirements to kick back in.
The waivers will expire for many more states by then end of 2015. According to calculations by the Center on Budget and Policy Priorities (CBPP), this process will end food assistance for approximately one million Americans over the next two years. This will come on top of other cuts the SNAP program has already recently absorbed.
The CBPP and other left-leaning advocates are calling on state governments to prepare for the crunch, and for Congress to step in. But it's also worth outlining a few basic reasons why applying work requirements to food assistance (or really any form of government aid) is a bad idea.
1) Food stamps are excellent economic stimulus.
Because it goes to the poor, and because the poor spend it quickly on basic necessities, SNAP is an excellent form of economic stimulus — one of the most powerful in the government's policy toolkit. The purchases made with food assistance translate into more demand for businesses, which means more income for workers, more possible hires, and more economic activity rippling outward.
Conversely, cutting food assistance will make it harder for the economy to generate job openings. And requiring people to find at least 20 hours a week of work when there literally aren't enough jobs to go around isn't just cruel, it's nonsensical. Right now there are almost two Americans looking for work for every one job that's available. (And nearly seven million Americans are currently forced by circumstance to work part-time even though they want to work full-time.)
It's good that federal law allows the work requirements to be waived during times of widespread economic hardship. But if we must have work requirements, a better and simpler policy trigger would be to apply them only when there are more jobs available than people looking.
2) Work requirements hurt workers' bargaining power.
For many Americans, it's intuitive that people should work if jobs are available, no matter how crummy they are. But there's a trade-off: if we use the social safety net to force people to take bad jobs, employers have less incentive to offer people good jobs. The harder we push to keep people working, the more likely we make it that the jobs they find will pay a pittance and treat them poorly.
This is the essence of worker bargaining power. Workers must have leverage to tell employers "no" in order to force wages up and improve working conditions. Work requirements for government aid undercuts that leverage.
As Stephen Pimpare documented in his book The New Victorians, some of the business interests that backed the 1996 welfare reform were rather explicit about this goal. The Chamber of Commerce said welfare reform would "improve the quality and availability of people looking for work" and would "lower the cost of hiring a low-skill worker" (i.e. would cut wages). The pro–work requirements Hudson Institute said reform would be a "boon...for business managers seeking quality employees in a tight labor market." It's obvious why businesses would want workers that are as cheap and compliant as possible. What's not obvious is why government should help these businesses out at the expense of the needy.
As with the job openings ratio, work requirements would make more sense if they kicked in when unemployment drops below 4 percent — the threshold most economist consider "full employment," where worker bargaining power kicks in — versus the 5.6 percent it's at now.
3) Everybody's got to eat, whether they've got a job or not.
One thing we tend to lose sight of is that the whole idea of "having a job" — that you will spend your days specializing in one activity, that you will be paid for this activity, and that you will use that money to buy everything you need, like food — is a pretty new development in the grand sweep of human history. Arguably, the concept of "unemployment" didn't even exist until the late 1800s.
Before that, the vast majority of people on the planet were farmers. They grew their own food, worked their own land (or more often the land of an overlord), built their own homes and goods and so forth. Obviously, money and markets existed, but people just relied on them far less than they do today. Since then, the spread of market institutions — modern property rights, land ownership, economies of scale, industrial capitalism — has eliminated that way of life. Today, if your not getting income from the market, and if the government won't give you non-market income and food assistance unless you're also getting income from the market, you're probably screwed.