Friday, September 16, 2016

What happens when the safety net gets smaller?

It looks as if fewer people want to get in.  The graph above shows participants in the Supplemental Nutritional Assistance Program (SNAP).
"In 2009, the federal stimulus bill allowed states to waive the work requirement, which limited out-of-work adults to three months of SNAP benefits before they must find a job, in areas with high unemployment," the note said. "These waivers continue to end in many states either because 1) the federal government has not extended the waivers, or 2) state governors are opting out of them."

7 comments:

  1. Froeb,
    It appears the the number are in a constant decline, however, it would be interesting to see a graph of SNAP and the relationship that is has with new presidents. I asked because this is an election year.

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  3. I don’t believe the safety net is getting smaller, I think the holes in the safety net are just getting larger. In the article “The number of people on food stamps is plummeting at the fastest rate ever after the government made a key change” by Bob Bryan on http://www.businessinser.com, it mentions how the changes in SNAP benefits will not only affect the “families rolling off of food stamps, but also companies that see large amounts of SNAP spending” (Bryan, 2016). But what about the food banks and other community programs that help feed and take care of those in need? This change will also have an impact on them. There is a good chance they are going to see an influx in the number of people who come to them for help. Will they be able to keep up with the demand? Are there enough people willing to volunteer their time and money to help those in need? This change has a larger impact on society than I think the government is willing to recognize.

    In Managerial Economics it states, “Determining whether an economic policy is good or bad requires analyzing all of its effects – the unintended as well as the intended effects” (Froeb et. al, 2016, p.18). I don’t believe the government analyzed all the effects the changes would have on our society. Unfortunately it is up to our society to take care of their own while the government makes the holes in the safety net bigger and bigger.

    References:
    Bryan, B. (2016). “The number of people on food stamps is plummeting at the fastest rate ever after the government made a key change”. http://www.businessinsider.com.

    Froeb, L., McCann, B., Shor, M. & Ward, M. (2016). Managerial Economics, 4th ed. Boston, MA: Cengage Learning.

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  4. I don’t think that the lower unemployment rate is an effective deciding factor for the government in determining whether or not to waive employment requirements for SNAP recipients. For example, low wage earners who are not unemployed also rely on SNAP to supplement their income. According to (Rosenbaum & Keith-Jennings, 2016), poverty and food insecurity, or the shares of families lacking consistent access to adequate food is a much more effective indicator of SNAP participation than the unemployment rate.

    We also have to consider the purpose of SNAP and its real benefits that contribute to society as a whole. SNAP is known as “the cornerstone of the nation’s nutrition safety net” and is shown to be an economic boon for the nation because of increased consumer spending. In an article titled “The Real Benefits of SNAP”, according to research by USDA Economic Research Service, each $1 billion of retail generated by SNAP creates $340 million in farm production, $110 million in farm value-added, and 3,300 farm jobs. Every $1 billion of SNAP benefits also creates 8,900-17,900 full-time jobs, which will help to alleviate the pressure of unemployment and in turn, help to boost the economy.

    The government is looking at this issue from a cost point of view. Froeb, et al, 2016, p. 35 notes that if you begin with the costs, you will always get confused; but if you begin with the decision, you will never get confused. The government needs to reassess its strategy of determining eligibility for SNAP according to the unemployment rate. Instead, it should take into consideration how the SNAP program contributes significantly to our economy, including SNAP recipients making purchase in large retail stores such as Walmart and Dollar General (Bryan, 2016).

    Bryan, B. (2016). “The number of people on food stamps is plummeting at the fastest rate ever after the government made a key change”. Retrieved from http://www.businessinsider.com/number-of-people-on-food-stamps-plummeting-faster-than-ever-before-2016-9

    Froeb, L., McCann, B., Shor, M., & Ward, M. (2016). Managerial Economics, 4th ed. Boston, MA: Cengage Learning

    Rosenbaum, D., & Keith-Jennings, B., (2016). SNAP Costs and Caseloads Declining: Trends Expected to Continue. Retrieved from http://www.cbpp.org/research/food-assistance/snap-costs-and-caseloads-declining

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  5. Brittany HippenstielSeptember 25, 2016 at 8:16 AM

    It is clear by the material I have read, and the graph provided by Froeb that the participating in SNAP is on a decline. The recession is obviously the first thing that comes to mind as to why the decline is happening. The repair of the economy, and other contributing factors will assist in the continuing decline.

    The number of people participating in the SNAP program has decreased since 2012 when they were at their peak. The decrease is an astonishing 9% (Almost 4 million people). The decrease is expected to continue. This is because of the new regulations, allowing only a 3 month unemployment period, and also readjusting income and household regulations.

    In agreeance with the other conversation taking place I have to agree that the SNAP program is contributing to our economy. Think of the income that so many business that accept SNAP are bringing in. If individuals were not eligible for SNAP, they would not be spending as much as they are able to with the assistance. This is only assisting in our strengthening of the economy. This is where the difficulty of decision making comes into play. In the reading it states to first, recognize the relevant benefits and costs of a decision, and second, remember to consider the consequences of the decision from your company’s point of view. (Froeb, pg 36)

    While reading a report from the Food and Nutrition Services, it was interesting to me to read that not all of the people eligible for SNAP utilized them.
    "On average, 51 million individuals were eligible
    for benefits each month in 2013, and 43 million
    received them. Overall, the program served 85
    percent of all eligible individuals in 2013, up
    from 83 percent in 2012." (http://www.fns.usda.gov/sites/default/files/ops/Trends2010-2013-Summary.pdf)

    http://www.cbpp.org/research/food-assistance/snap-caseload-declines-accelerated-in-recent-months
    http://www.fns.usda.gov/sites/default/files/ops/Trends2010-2013-Summary.pdf
    Froeb, L., McCann, B., Shor, M., & Ward, M. (2016). Managerial Economics, 4th ed. Boston, MA: Cengage Learning


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  6. I was recently in class and the discussion of SNAP benefits had come up. A fellow student giving his capstone project talked about the turnover rate at his current employer. He contributed a lot of the turnover to the people who work for 30 days then they are again eligible to receive their SNAP benefits so they quit.
    So while the government may think they are “Solving the problem” they are not addressing the real problem. People are finding ways around the rules and in the meantime the decrease in SNAP benefits are affecting those stores that receive revenue from these benefits and also employers who are facing increased turnover rates. Froeb et al quoted Henry Hazlitt from the Wall Street Journal in saying “the art of economics consists in looking not merely at the immediate but at the longer effects of any act of policy; it consists of tracing the consequences of that policy not merely for one group but for all”. My question is has the government looked at the longer effects of this policy?
    I for one certainly am not against the idea behind the policy but prior to cutting off benefits for those that cannot find a job we have to make sure there are jobs for them to find first.

    Froeb, L., McCann, B., Shor, M., & Ward, M. (2016). Managerial Economics: A Problem Solving Approach 4thed. Boston, MA: Cengage Learning.

    Bolen, E., Rosenbaum, D., Dean, S., & Keith-Jennings, B. More Than 500,000 Adults Will Lose SNAP Benefits in 2016 as Waivers Expire. Center on Budget and Policy Priorities. Web. Retrived from: http://www.cbpp.org/research/food-assistance/more-than-500000-adults-will-lose-snap-benefits-in-2016-as-waivers-expire

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  7. When the safety net gets smaller, eligible people will fall by the wayside. Less people will have access to the program. The Supplemental Nutrition Assistance Program (SNAP) was designed to provide assistance to eligible, low-income individuals and families. SNAP is the largest program in the domestic hunger safety net. However, there are so many States and agency regulations that create obstacles for those who need access to the program. For instance, “when the economy strengthens, SNAP participation declines. Of course, it seems logical that SNAP participation would decline as the economy strengthens. However, there are many people who probably still need access to the program even though the economy shows signs of strengthening. The Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) continued the commitment to be a national nutrition safety net and gave States a substantial new opportunity to streamline complex rules.” (Adapted from www.fns.usda.gov). “The art of business consists of identifying assets in low-valued uses and devising ways to profitably move them to higher-valued ones” (Froeb, 2016, p. 19). In addition to helping families during tough times, SNAP has an added benefit of serving as an economic multiplier – meaning it puts critical dollars back into local economies. Every $1 in new benefits generates up to $1.80 in economic activity. (Adapted from www.fns.usda.gov).

    Froeb, L.M., McCann, B.TT. Shor, M. and Ward, M.R. (2016). Managerial economics: A problem solving approach, 4th ed. Cengage Learning: Boston, MA.

    http://fns.usda.gov/snap/supplemental-nutrition-assistance-program-snap.

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