Tuesday, March 10, 2009

Nonsense: Lost retail dollars in the midst of our economic crisis

Getting purchasing power into the hands of the residents of Dallas County sounds like a fairly good thing to do these days. It sure seems that way to me.

This fact led me to check in on my friends at the Texas Health and Human Services Commission to gather some financial data on the state's adminisitration of the Supplemental Nutrition Assistance Program (SNAP) here in Dallas County. (Brief aside: it is interesting that the State of Texas doesn't use the program's correct name in reporting its own numbers in administering the benefit to Texans--evidently in Texas we call it "Food Stamps").

Here's what I found.

For March 2009. Dallas County reported out 105,691 SNAP households representing 258,122 individuals. The average benefit per month turned out to be $277. Assuming that the program will function at about this level for the year, Dallas County participants will receive $351,316,884 to spend on groceries at local grocery markets across the county.

Officials estimate that only 67% of eligible Texans receive the SNAP benefit to which they are entitled. If you apply this estimate to Dallas County (an extremely conservative approach to this research question), it means that 157,748 households are eligible for the benefit, but 52,056 households are not taking advantage of the opportunity.

Put in retail buying power terms, Dallas County will miss out on $173,036,674 that could flow through our depressed economy at a time when every dollar counts.

The manner in which the Texas Health and Human Services Commission administers the SNAP initiative should be brought under review by the Texas Legislature.

Leave the poor aside for a moment.

Thanks right!

Forget the poor children (all 153,510 of them who were served in March 2009).

Forget the senior citizens (all 16,543 of them served this month).

Just think of the loss to area food retail and wholesale stores this month and over the course of the year!

Afterall, $173,036,674 is not "chump change." Just ask the manager at your grocery store next time you are there.

How foolish can we be?

(To check out the data, go here.)

Credit where credit is due: thanks to my friends in Austin at the Center for Public Policy Priorities and to Senior Policy Analyst, Celia Hagert in particular for this post.

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13 comments:

Chris said...

I'm sure some people prefer not to move on Uncle Sam's Plantation.

Google: Back on Uncle Sam's Plantation by Star Parker

Anonymous said...

We live under an economic system --- maintained, enforced, and endorsed by Uncle Sam himself --- that more or less guarantees at least 5% unemployment. If he makes it impossible for some people to work, then he should bear the moral burden of providing for them with the excess that his system generates.

Jeff W

Anonymous said...

This is one of the simplest and (in my view) least objectionable govt benefits, regardless of your political leanings. It is strictly means tested and a very modest benefit for the truly poorest among us. Most households with even minimum wage earners will find benefits phased out very quickly. To anyone who objects: have you ever tried buying groceries for 3 people on $277/month? What's really sad is that over 300,000 Dallas County residents are poor enough to qualify. That's 12.5% of our population.

Eric Livingston said...

Off topic:
Larry, I'm sure you've already seen this, but if not, be sure to read this piece:

http://tiny.pl/bfkm

Texas, and specifically, Dallas, is leading the way in homeless children.

c hand said...

Could SNAP be improved by adding an obesity test to its means testing? A woman(400 lbs?) and her 10 year old boy(200lbs?) in my town don't seem to be improving their health with food stamps. Should the corn dogs and cheeseburgers be replaced with steamed broccoli in the free school lunches of fat kids?

The health and well being of our neighbors is at stake.

Anonymous said...

While at first blush it seems contradictory that poverty and obesity are positively correlated, they are. It's simply cheaper to eat unhealthy than to eat healthy. A fat laden double cheeseburger is both cheap and calorie rich - real bang for your buck, though unhealthy. Compare 80% lean hamburger meat (i.e. 20% fat) at WalMart with the cost of food at your local Whole Foods (or similar high end market). It's just cheaper to eat unhealthy.

I also suspect there's a strong psychological element. Just as too many poor people invest what little they have in cigarettes as a means to cope with their circumstances, (cheap) food is one of the few things someone poor may be able to afford that takes ones mind ever-so-temporarily off of day-to-day struggles.

Larry James said...

Thanks for the posts, but no one is talking to the main point here: the economic benefit to retailers and to all the rest of us via the jobs, tax base, overall economy! Spending public funds in this manner turns out to be an investment in the whole!

Chris said...

Food stamps are just another expansion of the welfare state. Once people are on welfare, it's almost impossible to get off. All the gains made by welfare reform have been erased by the stimulus bill.

All other things being equal, it has been shown than children on any kind of welfare have lower I.Q. than children who have not.

I refer you to the studies made by Robert Rector of the Heritage Foundation.

In addition, I understand one can sell food stamp cards on any street corner to get money for drugs, liquor, etc., perhaps get 50-75 cents on the dollar.

Anonymous said...

Chris:

The Pentagon has bought $10,000 toilets. Does that mean we should never again buy military hardware?

If there are abuses, then we should try to end the abuses. The fact that some program can be abused doesn't tell us whether something is worthwhile. Since humans are always involved, you can bet every program will be abused sometime by someone.

Anonymous said...

Larry:

I think what you're seeing is that whatever the economic benefits, that issue will always take a back seat to ones political ideology/leanings. If you like the idea of food stamps, you don't need local economic benefits to convince you. If you don't, no amount of local economic benefit could persuade you.

Larry James said...

You may be correct, Anon 2:56, but people in the middle who tend to be more reasonable on both sides do think in terms of larger self-interest and community interest.

To Chris' point, there is so little fraud in the SNAP program thanks to tight regulations and to the EBT cards that it is not worth talking about. Had Wall Street been so regulated we would not have the mess currently afoot.

Chantel said...

Larry James' words, Travis County's numbers

For March 2009. Travis County reported out 34,603 SNAP households representing 92,500 individuals. The average benefit per month turned out to be $271. Assuming that the program will function at about this level for the year, Travis County participants will receive $112,528,956 to spend on groceries at local grocery markets across the county.

Officials estimate that only 67% of eligible Texans receive the SNAP benefit to which they are entitled. If you apply this estimate to Travis County (an extremely conservative approach to this research question), it means that 51,646 households are eligible for the benefit, but 17,043 households are not taking advantage of the opportunity.

Put in retail buying power terms, Travis County will miss out on $55,423,836 that could flow through our depressed economy at a time when every dollar counts.

The manner in which the Texas Health and Human Services Commission administers the SNAP initiative should be brought under review by the Texas Legislature.

Leave the poor aside for a moment.

Thanks right!

Forget the poor children (all 53,449 of them who were served in March 2009).

Forget the senior citizens (all 3,129 of them served this month).

Just think of the loss to area food retail and wholesale stores this month and over the course of the year!

Afterall, $55,423,836 is not "chump change." Just ask the manager at your grocery store next time you are there.

How foolish can we be?

Imee said...

Ah well. As with any program, government or otherwise, the SNAP/food stamp program can and will always be prone to use and abuse of either its benefactors or its administrators.