The Economic Consequences of Cutting the Supplemental Nutrition Assistance Program

Abstract

The importance of the Supplemental Nutrition Assistance Program in combating poverty in our country by alleviating hunger was driven home anew during the Great Recession of 2007-2009 and the subsequent tepid economic recovery. The program is credited with preventing a dramatic increase in hunger and food insecurity in spite of the historically high levels of unemployment and under-employment throughout the Great Recession.

The Supplemental Nutrition Assistance Program distributed $72 billion worth of benefits to nearly 45 million Americans in fiscal year 2011. The program also plays an important role in sustaining demand for groceries provided by businesses in communities around the country. This analysis finds that each $1 billion dollars spent by recipients enables nearly 14,000 Americans to find or keep their jobs.

With long-term unemployment still high, and with overall unemployment expected to drop only slowly for several more years, cutting SNAP is likely to do significant harm to millions of families and workers. But there is a reasonable probability that such cuts will be proposed in the FY 2013 House leadership budget proposal. If cuts are proposed, this study offers policymakers a tool to estimate the employment consequences that will result. The study estimates that:

> Each $1 billion reduction in SNAP eliminates 13,718 jobs

> A ten percent reduction in the size of SNAP would cause more than 96,000 job losses

> These losses would be particularly strong in food-related industries, which would lose as many as 11,000 jobs under a 10 percent cut to the SNAP program

> Job losses will likely have the greatest impact on younger workers, since they account for a disproportionate share of workers in food-related industries