Overall, higher wages and employer-provided health care would not only lower state and federal public assistance costs, and allow all levels of government to better target how their tax dollars are used, but it would also rightfully hold corporations accountable to their employees and thus challenge the status quo of federal and state subsidization of corporate profit. Beginning in the late 1990s and early 2000s, as part of the larger shift toward privatizing public assistance systems and putting SNAP benefits on ATM-style Electronic Benefit Transfer cards, large banks themselves have also benefitted from SNAP and other safety net programs. They have done so, in part, by way of the contracts they hold with states to help administer benefits. Specifically, regardless of the actual effectiveness of EBT-based benefits, J.P. Morgan Chase and other banks cover none of the operating and equipment costs, which are instead covered by and split evenly between states and the federal government, while reaping the benefits of large contracts, interest collected on federal reserve money held for government programs, and user penalties including EBT card loss, out-of-network-use, and balance inquiries. According to the Government Accountability Institute, for example, J.P. Morgan Chase made more than $500 million between 2004 and 2012 from the transaction fees of government benefits to US citizens. In New York alone, J.P. Morgan Electronic Financial Services has a nine-year EBT services contract with the State Office of Temporary and Disability Services worth $177 million. Furthermore, according to a 2012 study entitled “Food Stamps: Follow the Money,” the characteristics of such contracts provide other key indices of banking power and profit. The study found that J.P. Morgan Chase held contracts for EBT in 21 states, Guam, and the Virgin Islands, clone rack signaling significant market power and a relative lack of competition.
Contract terms varied widely among states, thus indicating a lack of efficiency and standards as well. Collectively, and perhaps most significantly, banks profits from government programs during both bad and good economic times: during times of economic hardship because more people enroll in assistance programs, and during times of economic strength because rising interest rates mean more profit on the money they hold to distribute to beneficiaries. Furthermore, corporate and banking control and windfall profits—enhanced and secured by neoliberal restructuring—have affected the socio-economic well-being, and thus food security, of low-income communities and communities of color beyond the struggle over wages. The trend toward bio-fuels in particular—shown in Part I to be predominantly a corporate-controlled affair— has had a direct impact on the cost of food. A 2011 Food and Agriculture study concluded that the expansion of bio-fuels production, particularly in the United States with corn-based ethanol, and in the EU with biodiesel, is at fault for the demand shock for cereals since 2000. Such control of demand has had a large impact on tight commodity markets, such as corn. US ethanol, for example, consumes 40% of the country’s corn, and 15% of global corn production. While estimates vary on the impacts, the National Academy of Sciences concluded that 20 to 40% of the global food price increases in 2008 and the growth widespread hunger were due to bio-fuels expansion. Furthermore, other studies have found that each billion-gallon increase in ethanol production yields a 2 to 3% increase in corn prices. Finally, although the Farm Bill originally intended to stave off food insecurity and support the economy, the result has been detrimental to public health. Specifically, the continued subsidization of commodity crops, and re-entrenchment of this system of supports under neoliberal political and economic restructuring, has helped produce the obesity epidemic in the United States As of 2012, for example, 96% of US cropland was dominated by grain and oilseed commodity crops.
Between 1995 and 2010, $16.9 billion in federal subsidies went to companies and organizations that produced and distributed corn syrup, high fructose corn syrup , cornstarch and soy oils. In this light, as of 2012, the United States has the highest global per-capita consumption of HFCS at a rate of 55 pounds per year. Furthermore, as of 2013, 54% of the oil consumed by Americans is soy oil primarily in the form of cooking oil, baked good, and frying fats. As can be expected from mass consumption of these products, the rates of diabetes and obesity in the US have reached alarming levels: more than a quarter of the US population, or approximately 90 million people are obese, and 21 million have diabetes. Moreover, these food-related health challenges disproportionately impact communities of color as follows: Black adults have 47.8% obesity, Latinos/as have 42.5% obesity, and Asian Americans have 10.8% obesity. Significantly, the combination of ease of access, low cost, and negative health impacts of such foods, further harms low-income communities well-being while corporations themselves continue to profit. Conservative politicians and news pundits have maintained an assault on federal anti-poverty and safety net programs, and on SNAP in particular. The attacks on federal anti-poverty and safety net programs have consistently targeted the use of SNAP by such communities by relying upon anti-poor and racist “culture of poverty” stereotypes that readily blame marginalized communities for their social and economic conditions. Leading up to the passage of the 2014 Farm Bill, for example, House and Senate Republicans—both House Republicans inside and outside the House Agriculture Committee— aimed to impose new work requirements on SNAP recipients, under the assumption that those that receive public assistance have no incentive to work; to allow states to require drug testing for SNAP beneficiaries, under the assumption that low-income people and people of color are likely to use that money to purchase drugs, or that their substance abuse is the primary cause of their hardship, not vice-versa; and to ban ex-felons from ever receiving nutrition assistance, under the belief that ex-felons no longer deserve the support of society.
Although the underlying set of beliefs remains deeply embedded within society, many of these provisions were ultimately stripped from the bill and none of those measures were included in the 2014 Farm Bill. The most pervasive myth is that people on SNAP are “not in a hurry to get off,” primarily because of the supposed lack of incentive to work and the ease of profiting off federal support. On the contrary, most SNAP recipients remain in the program for a short period of time until they become financially stable and are able to transition to self-sufficiency, with half of all new participants leaving SNAP within nine months and many others leaving the program once their immediate need has passed. Moreover, as of 2011, many SNAP beneficiaries are already working: nearly 10.3 million working families receive assistance, comprising 36% of the total program enrollment, with more than three times as many SNAP households working as those that rely solely on public assistance for their income. Moreover, 4×8 tray grow according to a 2012 Congressional Budget Office report, SNAP usage is expected to decline between 2012 and 2022, reflecting a potentially improved economic situation and declining unemployment rate. Finally, despite sustained claims of fraud that accompany efforts to cut SNAP benefits, SNAP continues to have one of the lowest fraud rates among Federal programs. According to a 2013 USDA Food and Nutrition Service report, the rate of SNAP fraud has declined from 4% of benefits down to about 1% over the last 15 years. SNAP is among the most widely used anti-poverty programs in the United States and, according to the Center on Budget and Policy Priorities, the second most responsive federal program during economic downturns, only behind Unemployment Insurance . The percentage of the population with income below 130% of the federal poverty line—the income limit for SNAP eligibility—increased substantially during the period of the Great Recession, from 54 million in 2007 to 60 million in 2009, and 64 million in 2011. During this period, the rate of SNAP participation rose among eligible households from 65% in 2007 to 75% in 2010, up to 83% in 2012, with the program expanding at a record pace of 20,000 people per day. By the end of 2014, more than 46 million people, over 14% of all Americans, were using SNAP. SNAP eligibility and use, however, varies significantly by race/ethnicity, with communities of color experiencing the highest rates of eligibility for, and use of, SNAP, particularly during economic downturns. For example, by end of 2009, SNAP was used by 12% of the US population , 28% of all Blacks and 15% of Latinos/as nationwide were using SNAP. On the other hand, only 8% of whites were using SNAP, substantially below the national average. Such trends follow racial/ethnic and economic geographies as well, with SNAP use greatest where poverty and racial/ethnic stratification runs deep. Across the ten core counties of the Mississippi Delta, for example, 45% of Black residents receive SNAP support, while in larger cities such as St. Louis, with a population of 353,064, the percentage of Black residents receiving SNAP support rises to 60%. Even in the largest cities, those with over 500,000 people, such trends remain: white SNAP use peaks at 16% in the Bronx, New York for example, while Black SNAP use peaks at 54% in Kent, Michigan.
Significantly, there are 20 counties across the United States where Blacks are at least 10 times as likely as whites to be SNAP beneficiaries, and 26 counties in the United States where over 80% of Blacks were SNAP recipients. Conversely, there are only 5 counties with more than 39% of white receiving SNAP benefits. The growth of SNAP use amidst the Great Recession has been especially rapid in locations worst hit by the housing bubble burst, and particularly in suburbs across the United States where SNAP use has grown by half or more in dozens of counties. Furthermore, this is the first recession in which a majority of low-income communities and communities of color in metropolitan areas live in the suburbs, giving SNAP and other federal aid new prominence there. The increase in SNAP eligibility and use thus mirrors the impacts of the crisis in housing and employment, and the racialized distribution of impacts of such crises. Specifically, SNAP use was found to have increased by the greatest amount in places characterized by increased poverty, increased unemployment, more home foreclosures, and increased Latino/a populations. A 2012 Congressional Budget Office report confirmed such findings and estimated that although 20% of the growth in SNAP spending was caused by policy changes, including the temporarily higher benefit amounts enacted in the American Recovery and Reinvestment Act of 2009 , the housing crisis and weak economy were responsible for about 65% of the growth in spending on benefits between 2007 and 2011, with the remainder caused by other factors, including higher food prices and lower incomes among beneficiaries. Such has been the case historically: when unemployment rose, SNAP use always did too, signaling how SNAP use has long played a role in alleviating periods of economic distress. As such, SNAP is heavily focused on the poor. According to a 2015 Center on Budget and Policy Priorities report, about 92% of SNAP benefits go to households with incomes below the poverty line, and 57% go to households below half of the poverty line . Because families with the greatest need receive the largest benefits, and because households in the lowest income bracket use twice the proportion of their total expenditures on food than do those households in the highest income bracket, SNAP is a powerful anti-poverty tool. SNAP, when measured as income, kept 4.8 million people out of poverty in 2013, including 2.1 million children, and lifted 1.3 million children above half of the poverty line in 2013. Furthermore, SNAP is also effective in reducing extreme poverty. A 2011 National Poverty Center study found that SNAP, when measured as income, nearly halved the number of extremely poor families with children in 2011 by 48% and cut the number of children in extreme poverty by more than half . That the increase in SNAP eligibility and use during the start of the Great Recession mirrored larger trends in the economy—and was patterned after long-standing racial and economic inequality—signals the need to again assert that the experience of food insecurity is one part of a larger structure that continues to affect the most historically marginalized populations.