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February 5, 2016

Cut the Minimum Wage for the 1 Million Losing Food Stamps


Perhaps 1 million poor able-bodied adults will be cut this year from the Supplemental Nutrition Assistance Program(SNAP), commonly referred to as food stamps. That could hurt a lot of people, but it might also provide the opportunity to do something to help that population.

The 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), allows poor, able-bodied adults without dependents (referred to as ABAWDs), between the ages of 18 and 49, to receive food stamps for only three months. By the end of that period, if beneficiaries haven’t found a job, are engaged in job training, or are volunteering or participating in some type of workfare for at least 20 hours a week, the food stamps cease.

While that provision was included to encourage food stamp beneficiaries to find work, states can request exemptions from the time limit during periods of high unemployment, which they did during the Great Recession.

However, with unemployment around 5 percent, more than 20 states will return to the three-month limit in 2016—including Georgia, Florida, South Carolina and Pennsylvania—putting the total number at more than 40 states.

In response to the change, advocates for the poor claim that many food stamp beneficiaries have difficulty finding a job.

For example, the Pittsburgh Post-Gazette quotes Ellen Vollinger, with the Washington, D.C.-based Food Research and Action Center, as saying, “There are a lot of people who are working part time and can’t get the hours they want. … When the time limit hits, it is going to hit a population that is very vulnerable and does not qualify for much else in terms of aid.”

Ed Bolen, with the left-leaning Center for Budget and Policy Priorities, writes: “Cutting people off SNAP won’t lead them to find jobs, particularly in areas with high unemployment. Many able-bodied SNAP participants aren’t working because they can’t find a job or enough job training, or because they face challenges that prevent them from getting or keeping a job, such as health issues or homelessness.”

These concerns are valid. The poor often have limited work skills and experience, and many have limited social skills as well. And employers may be reluctant to take a chance on them at the current federal minimum wage of $7.25 an hour. And many states and cities have a minimum wage much higher than the federal level.

And yet many on the left who decry the cut in food stamps and protest the difficulty finding a decent job support raising the minimum wage to, say, $10 or even $15 an hour.

If an employer won’t take a chance on a job applicant with minimal skills for $7.25, why in the world would anyone think the poor would have an easier go of it if the minimum wage were $15 and hour?

Let me propose a different option: Instead of doubling the minimum wage, how about letting low-skilled food stamp recipients work for half the minimum wage?

What if an employer who hired a low-skilled worker on food stamps were able to pay that individual, say, $4 an hour for a set period of time, say, six months. After that the employee would be bumped up to the company’s entry-level wage.

That option would allow the employee to get some on-the-job training, and the employer would have some time to see if the employee was a good fit.

It’s not a new idea. Some people have proposed allowing employers to pay young workers just entering the workforce something less than the minimum wage as a way to encourage more youth hiring.

Most economists believe that many of the poor can’t find a job because the minimum wage has priced them out of the market. They cost employers more than the value they bring to the company—especially now that Obamacare mandates most employers spend thousands of dollars providing health insurance.

The price of their labor is the only thing low- or no-skilled workers have to bargain with. Allow those unemployed food stamp recipients to work for less than the minimum wage, at least for a short time, and maybe they will be able to get a job—and a future.


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