GO
Loading...

A bright spot for economy: Fewer people rely on food stamps

As the lingering impact of the Great Recession slowly recedes, so are the numbers of American families who rely on government help to put food on the table.

After a surge in 2008, government spending on the Supplemental Nutrition Assistance Program, or SNAP, has peaked and begun falling, according to an analysis of the latest data by the research institute Center on Budget Policy and Priorities. So have the number of participants collecting SNAP benefits.


Maggie Barcellano prepares dinner at her father's house in Austin, Texas. Working-age people now make up the majority in U.S. households that rely on food stamps, a switch from a few years ago when children and the elderly were the main recipients.
AP
Maggie Barcellano prepares dinner at her father's house in Austin, Texas. Working-age people now make up the majority in U.S. households that rely on food stamps, a switch from a few years ago when children and the elderly were the main recipients.

Apart from easing the burden on the government's budget, the decline is a sign of improvement in the average American household's financial footing.

"In the past food stamps participation has been something of a leading indicator, so it may mean that the economic recovery is being felt more broadly," said Dottie Rosenbaum, a CBPP senior fellow and co-author of the analysis. "To the extent that it is because people's economic circumstances have improved, that's the role it is intended to play and we think that's the main reason it is coming down."

Government benefits like SNAP and unemployment insurance are supposed to act as "shock absorbers" for the economy, dampening the impact of severe downturns like the Great Recession.

In addition to easing the financial pain for households at the bottom of the economic ladder, they help blunt the wider impact of the drop in consumer spending that accompanies high levels of unemployment.

Read More Who uses food stamps? Millions of kids, that's who

SNAP is available to families and individuals based on their resources, income level and size of their household. To qualify, individuals have to have gross income of less than $1,245 a month; for a family of four, the maximum allowable gross income is $2,552 a month. As of last November, average benefits in the 50 states ranged from a low of $214 a month in Minnesota to a high of $445 a month in Hawaii, according to the CBPP report.

Benefit levels were increased in 2009 under the Recovery Act, part of the government's stimulus program after the Great Recession.

"SNAP is a very good way of delivering economic stimulus because low-income people spend rather than save," said Rosenbaum. "That's what makes the program a good bang for the buck stimulus."

Now, as benefit levels revert to lower levels and fewer families qualify, the impact on the federal budget is easing. Overall SNAP spending roughly doubled from 2007 through last year, peaking at 0.5 percent of gross domestic product. That level is expected to keep falling as the economic recovery continues.

Read MoreStates make end run around food stamp cuts

The drop in participation is widespread; some 47 states have seen cuts in their SNAP rolls, which peaked nationally at nearly 48 million. But participation levels vary widely based on average state income levels.

In Wyoming, where roughly 2 percent of household incomes are below the poverty line, roughly 6 percent of the population is in the SNAP program. Roughly 1 in 5 people participate in SNAP in Mississippi, the state with the highest poverty rate.

By CNBC's John Schoen.

Contact Economy

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More