I have commented on the disappearance of the unemployed draft horse (discussed here) when technology made them uncompetitive. On the plus side people of course have more alternatives than horses. On the negative side, the unemployed are not going anywhere, and they are going to expect some sort of productive work.
Food stamps are starting to act as a prop at the lower end of the market. Corporate profits have been getting larger, so it is not as if in total the corporations are getting squeezed. Although clearly there is gaming of the system by the employers, the prevalence of the need for food stamps by working people indicates that there is a problem with the dollar value wage equilibrium at the lower end of the employment market.
Kristina Cooke, Reuters, 22 August 2011 (hat tip: NC)
NEW YORK (Reuters) - Genna Saucedo supervises cashiers at a Wal-Mart in Pico Rivera, California, but her wages aren't enough to feed herself and her 12-year-old son.
Saucedo, who earns $9.70 an hour for about 26 hours a week and lives with her mother, is one of the many Americans who survive because of government handouts in what has rapidly become a food stamp nation.
Altogether, there are now almost 46 million people in the United States on food stamps, roughly 15 percent of the population. That's an increase of 74 percent since 2007, just before the financial crisis and a deep recession led to mass job losses…
"It's kind of sad that even though I'm working that I need to have government assistance. I have asked them to please put me on full-time so I can have benefits," said the 32-year-old.
She's worked at Wal-Mart for nine months, and applied for food stamps as soon as her probation ended. She said plenty of her colleagues are in the same situation…
About forty percent of food stamp recipients are, like Saucedo, in households in which at least one member of the family earns wages. Many more could be eligible: the government estimates one in three who could be on the program are not…The maximum amount a family of four can receive in food stamps is $668 a month.
Over the past 20 years, the characteristics of the program's recipients have changed. In 1989, a higher percentage were on benefits than working, but as of 2009 a higher percentage had earned income…"SNAP is increasingly work support” …6 percent of the 72.9 million Americans paid by the hour received wages at or below the federal minimum wage of $7.25 an hour in 2010. That's up from 4.9 percent in 2009, and 3 percent in 2002, according to government data.
Bolen said just based on income, minimum wage single parents are almost always eligible for food stamps.
I feel like I need to say more.
But with so many moving pieces, I am not sure exactly where the problem lies. Our earlier discussion on the increased number of people on disability I believe is also symptomatic of our problem. I have strong suspicion that wage arbitration caused by the combination of an ever interlocked global economy combined with a general level of world overpopulation are the primary culprit. But they are easy words to say, and difficult to prove