Food Stamps and the Low Labor Participation Rate

Why wouldn’t labor participation be low if people get free food but don’t have to look for work?

Here is a really interesting headline from Fox News: “Most states waiving work requirements for food stamps, despite improving job market.”

Most states still are waiving work requirements for those on food stamps, raising concerns that despite an improving job market the Obama administration is feeding government dependency — and all at the expense of taxpayers.

Forty-four of the 50 states have to some degree eased work requirements for the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps: 30 states grant waivers state-wide, while another 14 issue partial waivers in areas of high unemployment.

Why do I find the headline interesting? The key term is “labor participation.” The labor participation rate is the number of people who are in the labor force as percentage. The labor participation rate has been horribly low in the Obama economy.

The important thing to realize is that the unemployment rate can be lowered by a low labor participation rate. If people are not looking for a job they are not counted as unemployed.

So in the middle of this story we have the following statement:

A spokesman with the USDA’s Food and Nutrition Service told Fox News that SNAP recipients still are expected to seek and accept work, if they are able – though most states do not make that a requirement.

Do you see the conflict? The Fox News headline implies that, because of the “improving job market” (which is measured as the lower unemployment rate), we should expect the Food Stamp work (or at least seeking work) requirements to be reinstated.

But how do we know that the unconditional food stamps are not significantly contributing to the alleged “improved job market”?

There are now two ways to lower the unemployment rate. First, the unemployed can find work. Second, the unemployed can stop looking for work. Every time people stop seeking employment, the unemployment rate goes down. And now we discover that people can get food from the government in many states without having to look for work.

So the “improved job market” could be, to some extent, a result of food stamps being given without any conditions attached. Maybe, as soon as people were required to seek employment as a condition for receiving food stamps, the unemployment rate would shoot up and the “improved job market” would be revealed as an illusion.

In any case, while food stamps are lower on my priorities of government spending that needs to be cut, I think reinstating the requirement to put some effort into looking for a job would be a good idea. Here’s the Fox News discussion:

One of the worst things you can do is present this issue as a matter of “laziness” or an unwillingness to work. The problem is that people can’t rise to the occasion if they are never allowed to meet the occasion. By protecting people from economic reality, we encourage them to never adapt to economic reality. They don’t know what they are capable of because they are not forced to find out.

The best analogy I can think of is resistance training. In order to get stronger you have to provoke your muscles with a hard activity in order to provoke an adaptive response. If you never do that you never become that stronger person.

Now if people are helpless and weak, then they need continual help. But that’s not how society used to view able-bodied people without dependents. In fact, even many disabled people with dependents are better than that.

Should we promote a system that strengthens people or that weakens them?