SNAP can serve as an economic indicator. What is the program telling us about the economic recovery?
Analysts who look to SNAP, the nation’s food assistance program, as an economic indicator, will find little encouragement in the latest statistics provided by the U.S. Department of Agriculture.
Participation in SNAP – the Supplemental Nutrition Assistance Program dipped slightly in February, but remains near the record high of more than 46.5 million Americans in December 2011, according to the most recent USDA data.
SNAP served more than 46.4 million Americans in February, a 4.8 percent year-over-year increase from the nearly 44.2 million Americans who received SNAP benefits in February 2011, according to the USDA, which reports that roughly one-in-seven Americans received food assistance last year.
What’s behind the rise? Declining economic conditions are a major factor, according to a USDA report in the March 2012 issue of Amber Waves. “For most of the program’s 40-year history, SNAP participation has tracked with the unemployment rate, rising as unemployment worsened and falling as employment picked up,” wrote USDA analysts Margaret Andrews and David Smallwood. Since 1980, a 1 percentage point increase in the national unemployment rate results in up to three million additional SNAP participants.
According to the USDA, SNAP participation slowly declined between 1983 and 1989, as the economy strengthened, then increased sharply from 1990 to 1994. Participation reached 28 million in March 1994, then declined steadily to a low of 16.9 million in July 2000. Rates began rising in 2001 with increased unemployment and poverty, continuing to rise during the most recent economic downturn.
“The face of SNAP has changed during the recent economic downturn as more newly unemployed or underemployed people rely on SNAP to feed their families,” according to the USDA website.
Between 2007 and 2010, the SNAP caseload grew by 56 percent, while the number of people in poverty increased by 26 percent, and the number in deep poverty rose by 32 percent. To qualify for SNAP benefits, a household generally must have monthly gross income less than 130 percent of federal poverty guidelines: $2,422 a month for a family of four in the current fiscal year, and a monthly net income less than 100 percent of poverty guidelines and assets of less than $2,000. The current maximum allocation for a family of four is $668 a month.
SNAP also serves as an economic multiplier, boosting the economy during difficult times, according to the USDA, which reports that every $1 in new SNAP benefits generates up to $1.80 in economic activity. Each $1 billion in increased SNAP benefits supports the equivalent of 18,000 full-time jobs, including 3,000 farm jobs.