I had discussed in one of my earlier articles on the Supplemental Nutrition Assistance Program enrollment in the United States. This post looks into the relation between the number of Americans enrolled for the SNAP program and the unemployment rate. Ideally, a decrease in unemployment rate should result in a decline in number of enrollments under the SNAP program.
The chart below gives the unemployment rate in U.S. from October 2008 to April 2012 and the Supplemental Nutrition Assistance Program enrollment during the same period
Very clearly, the decline in unemployment rate had no positive impact on the number of Americans enrolling for SNAP. On the contrary, the number of people enrolling has been increasing or remained largely steady.
Over 15 million Americans have enrolled for the SNAP benefits in the last three and half years.
Talking about the lost decade and the impact on households, nearly 29 million Americans have enrolled for SNAP benefits since the year 2000.
What the data tells us is that the huge government spending post the financial crisis has not percolated to the real economy and benefited the really needy. Further, there has been no significant improvement in the jobs markets as indicated by the headline unemployment numbers.
I had discussed the real unemployment in details in one of my earlier articles. My concern is that similar policies are most likely to continue and the impact of the real economy and average middle-class Americans will be minimal. At the same time, inflation can lead to further decline in purchasing power for middle-class households. It remains to be seen when the policymakers will shift their attention towards attempting to revive the real economy rather than providing an extended bailout for financial institutions.