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Gov't Report: Food Stamps Participation at Historic High, Even as Unemployment Rate Falls

11:00 AM, Feb 20, 2014 • By JERYL BIER
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A recently released Department of Agriculture (USDA) report on the "Food Assistance Landscape" for the fiscal year 2013 shows that for the second year in a row, participation in the federal government's SNAP (food stamps) program has increased despite a corresponding drop in the unemployment rate, bucking the historical trend. The unemployment rate fell below 8 percent in 2013. On the other hand, the percentage of the U.S. population on food stamps in 2013 rose to the highest level ever, just over 15 percent at 47,600,000 persons.  The orange and blue lines on the right side of the chart below demonstrate the divergence:

The author of the report, Victor Oliveira of the USDA's Economic Research Service, describes the anomaly in the recent trend:

The percentage of the population in SNAP increased in both fiscal 2012 and 2013, even as the unemployment rate fell for the third consecutive calendar year—a result inconsistent with the historic rela- tionship between the two variables. The improvement of economic conditions during the early stage of recovery, when the unemployment rate starts to fall, takes longer to be felt by lower educated, low- wage workers who are receiving SNAP benefits. For example, the poverty rate in 2012 (the latest year available) was about the same as during the 2 previous years, suggesting that while unemployment was falling, many low-income households did not share in the economic growth. During previous economic recessions, the unemployment rate fell before SNAP participation decreased (a lagged response). It is possible that as the economy continues to recover, SNAP participation will follow but with a longer lag than following previous recessions.

Other areas explored in the report are the continued reduction in participation in the Women, Infants, and Children (WIC) program, and the increasing expenditures in the National School Lunch Program despite falling participation.  The report notes that food and nutrition assistance expenditures continue to drive the growth in the USDA's budget, now accounting for 72% of USDA outlays.

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