The Subsidy Addiction: Jobs Vs Foodstamps
In the aftermath of Friday's mediocre jobs report, and while we wait for the USDA to release the latest November foodstamp update which will almost certainly print at a new record high, here is yet another representation of a relationship we have shown on several occasions previously, yet which is always entertaining, and shows just what kind of "recovery" the US is undergoing. Presenting the indexed change of payrolls (green line) and foodstamps recipients (red). No explanation is necessary.
Some thoughts from Bloomberg Brief:
An ongoing concern is that growth in jobs continues to be dwarfed by the surge in food stamps. During the first 10 months of 2012 there were 1.01 million new additions to the USDA’s Supplemental Nutrition Assistance Program (SNAP), a 2.2 percent increase. During the same period, the number of nonfarm payroll jobs increased by 1.5 million, a 1.1 percent gain.
The results from the end of the recession in June 2009 are even more staggering. The number of food stamp recipients has rocketed 30 percent since mid-2009, yet the number of nonfarm payroll jobs has inched up a mere 2 percent over that same period. Considering the composition of those jobs – in low wage industries – the household sector is clearly suffering.
In a conference call last Thursday, a day before the jobs report, Scott Beattie, CEO of Elizabeth Arden noted that the company’s customers remain challenged by the economy. “These are customers that are living paycheck-to-paycheck, many of them reliant on government subsidy in food stamps and unemployment insurance and other kinds of government subsidies, and you see it,” he said.
Dick Boer, CEO of Koninklijke Ahold Nv, the Dutch owner of Stop & Shop, mentioned his concerns with this issue in late November. “We know that 15 percent of the Americans are living on food stamps today, and we know that most of them, even after two or three weeks, are short of money.”
And David Dillion, the CEO of grocery store giant Kroger recently said that while the economy has gently improved, value customers are still stretched. “We still are getting a lot of food stamps, a very high dollar amount and a very high percentage amount, and that is definitely problematic.”