The $13 billion boost to food stamp benefits in the new coronavirus aid bill isn’t some kind of giveaway to the poor — it’s some of the best stimulus government money can buy.
Economists say the new increase for food stamps, known as “SNAP,” or the Supplemental Nutrition Assistance Program, through June, 2021, wouldn’t just help those going hungry during the pandemic. It also boosts the economy more than other kinds of stimulus spending.
Each dollar spent on SNAP turns into $1.73 in economic activity, compared to $1.36 for each dollar spent on federal aid to state governments and $1.29 for a payroll tax holiday, according to Moody’s Analytics researchers.
Meanwhile, cutting the corporate tax rate yields but $0.30 per dollar.
“Every dollar in SNAP benefits boosts the economy,” said Luis Guardia, president of the nonprofit Food Research and Action Center. “It helps strengthen the existing food supply and the mechanisms that support that.”
Because people spend food stamps quickly and in their communities, which are also likely to be economically distressed, the program has a multiplier effect, boosting local businesses and economies.
The U.S.D.A. found SNAP spending has ten times the job-creation impact compared to other transfer payments or federal expenditures, particularly in rural areas.
Marc Jones, CEO of Homeland Stores, a chain of 80 grocery stores located in Oklahoma, Kansas, Texas and Georgia, said his “food stamp business has increased noticeably” since the pandemic began.
On average, Jones said food stamps comprise about 10 percent of sales, but stores in the poorest communities and those hit hardest by the pandemic rely on SNAP funds for about 30 percent of sales.
“We work with our regional and local food banks quite a bit. We hear from them that they’re seeing unprecedented need,” Jones said.
In April, the program helped nearly 43 million Americans per month afford a nutritiously sufficient diet, according to the latest government data.
SNAP benefits are based on the U.S.D.A.’s “Thrifty Food Plan,” which calculates weekly food costs of roughly $40 a week for single adults, or $134.50 for a family of four.
This budget assumes shoppers can buy in bulk to get lower prices. That isn’t always possible for families who live paycheck to paycheck.
Brandi Wright of Van Buren, Missouri, mother of two, said she was facing eviction and feared “being put out on the street” before she connected with charitable aid and SNAP benefits.
“It’s very scary when you have children,” she said.
She said the $374 a month she gets in SNAP benefits now gives her the flexibility to buy things like meat in large packages, then portion it out and freeze it.
“If you have the money to spend it, you can buy in bulk,” said Wright. “Without food stamps… I couldn’t buy bulk because I didn’t have the couple hundred dollars.”
As a result of the pandemic, the number of Americans estimated to be at risk of going hungry has risen from 35 million to nearly 50 million, according to estimates by the nonprofit Feeding America.
Much of that new need is coming from people who’ve never had to reach for food stamps before.
When Baltimore resident Henashena Hayes had to abruptly shutter her daycare business in the spring, the 73-year-old quickly realized that her monthly Social Security check of just over $1,000 wouldn’t be enough to cover all her bills and also buy food.
Hayes said she received some food boxes from local churches, but she said she worried about her nutrient intake, particularly because her age puts her into a higher risk category for Covid-19.
“I try to stay eating healthy,” she said, but she found it difficult to acquire fresh fruits, vegetables and dairy products from channels that distribute primarily nonperishable groceries.
After enrolling in SNAP, Hayes said that now being able to buy fresh food helped her overcome her initial qualms.
“I felt guilty because I worked most of my life. I’m used to working and paying my own bills,” said Hayes.
“I saw it as a handout, but this is survival,” she said.