An unemployment line. (Credit: Reuters)
America’s social safety net, such as it is, has recently come under some scrutiny. Chana Joffe-Walt’s in-depth exploration of the increase in people getting Social Security Disability benefits at NPR got many listeners buzzing. Then in The Wall Street Journal, Damian Paletta and Caroline Porter looked at the increase in the use of food stamps, called SNAP. All three journalists look at the increasing dependence on these programs and come away puzzled: Why are so many people now getting disability and food stamp payments?
The answer is twofold. Recent trends give us the first part of the explanation. Yes, as Paletta and Porter note, the economy is recovering and the unemployment rate is falling. But, as they recognize, the poverty rate is also rising. And therein lies the rub: people are getting jobs but staying poor. The available jobs are increasingly low-wage and don’t pay enough to live off of. And the big profits in the private sector haven’t led to an increase in wages.
GDP and employment may be doing well, but that hasn’t done much for those at the bottom of the totem pole. As the WSJ article points out, 48.5 million people were living in poverty in 2011, up from 37.3 million in 2007, a 30 percent increase. This is despite an unemployment rate that’s fallen off its peak. Some of the fall in the unemployment rate has been driven by people simply giving up on looking for a job altogether. But those who do get jobs are likely trading their once middle-class employment for low-wage work. The National Employment Law Project has found that mid-wage jobs have been wiped out during the recovery in favor of low-wage work: low paying jobs grew nearly three times as fast as mid-wage or high-wage work.
But there’s a deeper explanation that goes beyond the current economic picture. Aren’t there other programs for the increasing ranks of people living in poverty to turn to? Unfortunately, we’ve worked hard to weaken key parts of the safety net by changing how programs operate and then cutting back on their funds. Consequently, the number of people who are reached by programs for the poor has shrunk. But when you take away someone’s lifeline, they don’t stop needing it. So they either suffer hardship or find support elsewhere. What disability insurance and SNAP have in common is that they are fully funded by the federal government, which also can set the eligibility requirements. While states narrow eligibility requirements for TANF or unemployment insurance, the federal government can leave them (relatively) more open for SNAP and disability. That leaves them absorbing those who we’ve thrown off the rolls of other programs.