One graph that says much about America, and our future: the growth in jobs vs. food stamp use

Summary:  Today we have a graphic that tells us much about both the recovery and the trends shaping the New America — growth in food stamps vs. jobs.  What forces drive these contrasting trends, and how will they help reshape America?


Below we see the US recovery in one graphic, from the February 4 issue of Bloomberg Briefs. It shows the weakness of the recovery, but has another and deeper lesson for us. The pressure of the Great Recession on business accelerated existing political and economic trends.  As a result the New America has an increasing fraction of jobs that are some combination of minimum-wage, temporary, part-time, and with no benefits (Wal-Mart and Amazon have perfected these tactics; see the links below).

Free competition, open borders to immigration, and the destruction of private sector unions all contributed to this situation. Despite what we’re told, this was not inevitable or immutable by public policy.  The nations of Northern Europe have shown this by the successful protection of their middle classes.

Bloomberg Briefs, 4 February
Bloomberg Briefs, 4 February 2013

Foreshadowing the next wave of automation

This structural change in the bargaining power of management and labor puts us in a weak position to cope with the robot revolution, the next wave automation (see posts below for descriptions and analysis).  Employers have learned to structure their workforce to minimize wages — and prevent unionization (including defanging the New Deal’s labor protection laws and agencies).  The next wave of automation will further erode away both jobs and skill premiums, pushing more people into the ranks of the marginal workers.

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Does the September jump in food stamp recipients signal a red alert for the US economy?

Summary:  The number of households getting food stamps tells us little about the future (ie, it’s not a leading indicator). It tells us something about the present. And reporting about it tells us much about the reporter.  America will become a stronger nation when we demand high-quality sources of information, and complain about those that twist the news to suit our biases. That’s something each of us can do, starting today.

The US Department of Agriculture released the food stamp data (ie, SNAP) for September. Before tropical storm Sandy hit.  Zero Hedge tells a story about the numbers.

The just reported foodstamp number for September was a doozy, with 607,544 new Americans becoming eligible for foodstamps, as a record 47.7 million Americans are now living in poverty at least according to the USDA. The monthly increase was the highest since May 2011, and with August’s 421K new impoverished America, over 1 million Americans made the EBT card their new best friend. It is unclear just which atmospheric phenomenon will get the blame for this unprecedented surge in poverty, which comes at a time when the pre-election economic data euphoria was adamant that the US economy was on an escape velocity to utopia.

Being from Zero Hedge, this is of course misleading.  The USDA data page clearly shows that September data includes disaster relief, and they hyperlink to an explanation.  The number of people getting SNAP benefits rose 608 thousand in September. The number of people getting new SNAP benefits in response to Hurricane Isaac: 654 thousand.

USDA Food & Nutritional Service Responses to Hurricane Isaac

FNS approved operation of the Disaster Supplemental Nutrition Assistance Program (D-SNAP) for new D-SNAP recipients and ongoing SNAP recipients to help disaster survivors in Louisiana and Mississippi in response to Hurricane Isaac which made landfall on August 28, 2012. Preliminary reports show that as of October 12, 2012, FNS has provided over $114.9 million in Disaster Supplemental Nutrition Assistance Program (D-SNAP) benefits to help disaster survivors in Louisiana and Mississippi in response to the extended power outages and flooding caused by Hurricane Isaac. Over 654,652 individuals in 283,598 households received these benefits. In addition, FNS provided over $19.2 million in supplemental benefits to 299,169 individuals in 125,605 ongoing SNAP households affected by the disaster.

Zero Hedge also provides graphs (as usual, of excellent quality), which tells the story of our economic recovery: weak — and leaving many people behind.


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