The U.S. Department of Agriculture released its data on the Supplemental Nutritional Assistance Program (SNAP) for 2013, and the numbers aren't good.
Participation in SNAP – commonly referred to as food stamps – is near an all-time high. Out of 115 million households in America, 23 million of them used food stamps in 2013 -- a staggering 20% of all U.S. homes.
That's alarming news. After all, the main reason a person needs food stamps is if they're unemployed or their job compensation isn't enough to cover the cost of basic living expenses.
While scanning the comment sections of websites reporting on these figures (always a bad idea), I noticed a common theme: Readers overwhelmingly blame the government for this problem. It is the fault of the government policy, they reason, that so many Americans can't cover the cost of food with their own incomes.
To be sure, our government has many problems. But in this specific situation, the criticism seems misdirected. Here’s why.
The government – whether at the federal, state, or local level– employs 8% of all working Americans. In other words, 92% of American workers depend on private sector wages to cover their life expenses.
Why are so many workers seemingly unable to cover their essential costs? One dominant line of thinking is that excessive government regulation makes it difficult for employers to both pay workers a reasonable wage and stay afloat. But is that what's happening in modern America? Not at all.
Corporate profits peaked to an all time high in 2013, and economists are forecasting even higher profit margins for 2014. Despite these record earnings, employee wages continue to drop. Accounting for inflation, workers ages 25-64 have seen their wages drop by 4% since 1970. The drop occurred despite the fact that worker production and GDP per capita dramatically increased over the same time span.
Workers are struggling. Companies aren’t. On the contrary, they’re thriving. Over the same time period that worker wages dropped by 4%, executive wages more than quadrupled. When the world around you is constantly getting more expensive through inflation but the amount you are paid doesn't keep up, is it any surprise that people need to turn to government assistance to get by?
U.S. companies have more money than ever to pay employees a living wage. Yet here millions of Americans are, being underpaid to the point that they depend on government assistance to feed themselves. Who should they aim their frustration at: the government or the profitable companies denying them a raise?
The answer is pretty clear.