Tuesday, July 23, 2013

Food Stamps for Profits

Walmart, which pays its workers an average wage of $8.81 an hour, recently gathered a few headlines when it threatened to cancel construction on three stores in Washington D.C. after the city council wanted to force them to pay a living wage of $12.50 an hour (although earlier this year, Walmart claimed in a letter to Ralph Nader that $12.67 an hour was already the average wage they paid their employees.)

As of last year, the average wage for a McDonald's worker was $7.65 an hour, and they would have had to work 550 years to earn the CEO's pay.

New York Times: "Wage trends in fast food are not simply a result of impersonal market forces. Corporate policy matters. According to Bloomberg News, the disparity between the pay of McDonald’s fast-food workers and its chief executive officer has doubled in the last 10 years, while the company lobbied against minimum wage increases and discouraged unionization. According to a recent Gallup Poll, more than two-thirds of Americans support an increase in the minimum wage, and some restaurant owners are also on board."

McDonald's and Walmart both push their workers onto public services and food stamps.

Congress is currently debating cutting food stamps in the farm bill. Paul Ryan's budget would cut $33 billion over 10 years. Yet there are Republicans in Congress who get huge farm subsidies, but who also voted to slash food stamps in the current farm bill. 14 Republicans have gotten a combined $7.2 million in farm subsidies since 2004, but voted to cut the Supplemental Nutrition Assistance Program (SNAP) to the bone; but only one of those 14 then voted against the version of the bill that would have removed SNAP entirely.

One example of GOP hypocrisy would be Tennessee Rep. Stephen Fincher, who's received $3.5 million in subsidies over the years; but he's on a biblical crusade against SNAP, a program that 22 percent of the people in his home county rely on.

For the GOP, the theory has always been that government programs such food stamps (as well as unemployment and disability compensation) discourages work. Sean Hannity at Fox News likes to ask the question of whether Americans are "better off on food stamps" or "better off with a job". The ideological spin and mean-spirited rhetoric by the conservative media, think tanks and bloggers, as well as most Republican politicians, is that food stamps (SNAP) is just anther welfare program for lazy Americans who don't want to work.

But 47% of SNAP participants are under the age of 18 years old, another 8% are over the age of 60, and 36% were white (non-Hispanic) --- the largest group. But 58% of all SNAP recipients lived in a households with earnings from a job. Increasingly, the faces of people  getting food stamps are in a working-poor family --- and not just the unemployed or those on TANF (traditional welfare).

The profile of food stamp recipients has changed in the last decade. The number of households that have earnings while also participating in SNAP has more than tripled from about 2 million in 2000 to about 6.4 million in 2011 --- when a slew of good-paying jobs were being offshored to foreign countries overseas. Data shows a loss of 56,190 factories between the first quarter of 2001 until the end of 2010.

Coincidently, that was right about the same time when the banks were deregulated (1999) and the capital gains tax for billionaires was lowered to a mere 15% by the Bush tax cuts (2003) and when the stock market crashed (2008) as 8.7 million Americans lost jobs (2008/2009) --- all these event cumulating into the perfect storm. It's no wonder that so many Americans now need help to eat.

But what's not usually told is who primarily benefits from food stamps: Marion Nestle on the business of food stamps: “Here’s where the profits come in." Among the beneficiaries, there are the food producers such as Cargill, PepsiCo, Coca-Cola and Kraft, as well as retailers like Wal-Mart.

Consider the irony of companies like Walmart helping its employees apply for food stamps, and then profiting from their food stamp dollars. That's not public welfare, that's corporate welfare.

But this food stamp-corporate welfare model goes all the way to Wall Street, and is led by JPMorgan Chase, which administers the SNAP benefits in 24 states. JPMorgan's segment that makes food stamp debit cards made $5.47 billion in 2010. These banks who helped gut the American economy, and then were "bailed out" by the American taxpayers, are now profiting off the misery of the working-poor at the expense of the American taxpayers again. So it's not just companies such as McDonald's, Nestle, JP Morgan and Walmart who profit from food stamps.

And all these major U.S. corporations who profit from the managing and selling of products for food stamp money, also benefit in a much more important way: social stability. All those millions of working-poor Americans have continued to work for increasingly depressed poverty wages, but only for so long as they aren't hungry. But civility ends and social unrest begins when people can't feed themselves anymore, because then, hungry people will have nothing else lose.

Stephen Colbert on the great food stamp debate.

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