Boss rakes in millions; workers get food stamps

August 17, 2011 | John Burbank

john burbank

John Burbank, Executive Director

From the Everett Herald:

While watching Congress and the president wrangle over the fake crisis of raising the debt ceiling, the Department of Agriculture reported that 45.8 million Americans now receive food stamps to help purchase food. That’s one out of every seven Americans.

In our state more than 1 million people now depend on food stamps — almost one out of six. The number of people receiving food stamps has grown by 90,000 in Washington over the past year alone. That’s like putting almost the entire population of Everett into poverty. In five years, the number has grown by half a million.

There’s a simple reason for the increase: people are poor, and getting poorer, as the recession grinds on. How poor? Well, to get food stamps for a family of three, your annual income must be less than $37,000. For a single person working full-time, you cannot make more than $10.50 an hour. Exceed those limits and you lose your food stamps.

Food stamps are not easy to get. First, you have to be in or close to poverty — you can’t really earn a living wage. You pretty much have to empty out your bank account. And for those who worry about such things, no, you can’t be an “illegal” alien or have a drug conviction. So we are talking about keeping hunger at bay for working citizens. To get food stamps you have to be personally interviewed and go through a document check. That’s the red tape that keeps one-third of eligible people from receiving food stamps.

If you need food stamps, they are literally life-saving — so they’re worth a lot! But if you don’t, you might wonder about their value. So here are the numbers:

If you are single and making $10 an hour working full-time, you will get about $16 a month. Hardly worth going to an interview! In Washington, the average food stamp benefit per person is $120 a month. For a household, the average benefit is $243.

Though they are a relatively measly benefit, food stamps have an outsized economic benefit for our economy. Every $5 in food stamps spent on groceries generates $9 worth of total economic activity. That’s because the food stamps are spent in local stores employing local people, who also spend their paychecks locally. Direct expenditures on food stamps accounted for $1.4 billion in economic activity in 2010, and the multiplier effect meant that $2.5 billion was injected into our economy that year through food stamps.

If you think food stamps are just hand-outs to the undeserving, you should know a couple of things: About half of food stamp recipients are children. Another 10 percent are people over age 60. And the average household income for food stamp recipients is just three-fifths of what is considered poverty.

Now think about your local Starbucks barista. She very likely makes less than $10.50 an hour. If she works full-time, she is still on the cusp of poverty. She can and should qualify for food stamps. Meanwhile, the CEO of Starbucks, Howard Schultz, enjoyed a total compensation package of $21.7 million last year. That’s a lot of lattes. If he enjoyed a measly income of just $1 million, that other $20.7 million could have paid for food stamp benefits for 15,000 people. But he is not paying for those food stamps. Instead, the federal government and us taxpayers are subsidizing poor wages at Starbucks with food stamps for its employees. $21.7 million for the boss, food stamps for the workers … Something is out of kilter.

All told, the federal government provides $65 billion a year in food stamps to almost 46 million Americans. While that sounds like a lot of money — maybe it’s something Republicans in Congress would like to cut out — it comes down to $118 a month for each recipient. And it pales next to the $2.2 trillion we’ve lost over the past 10 years thanks to the Bush (and now Obama) tax cuts for the wealthy few.

But thank goodness there are food stamps. With wages stagnating, unemployment hovering at 10 percent and people discouraged from even looking for work, we should be able to make sure people can eat. In fact, it’s the least we can do in America, the richest and most productive country in the world.

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Posted in Column, State Economy

Comments

  1. Winslow P. Kelpfroth says:

    I”m not sure there were food stamps as such when I was a child, but there were those gallon cans of beef, chicken and pork plus the 5-pound blocks of cheese and sacks of powdered milk from the USDA program. Our family didn’t qualify for them, but we took them as payment for childcare we provided for the folks who were out of work. It was like currency. Chop a cord of firewood for the neighbors, get a couple blocks of cheese.
    I’m confused by the comparison between the baristas and Mr. Schultz, who is my sister’s neighbor. Certainly, he made $20+ million last year, but has he made that every year? Probably not. Let’s see, the company has 17,000 stores; that works out to $3/store/day for Schultz’ part in guiding the whole enterprise. If there are 6 employees per store, he’s grabbing a whole 50 cents per day from each of them. Scandalous.

    • Alex Stone says:

      Winslow,

      You’re right – Schultz has not made $20 million every year. In 2008, Schultz earned $98.6 million. In 2009, $29.21 million. And in 2010, as noted in the above article, he earned $21.7 million. (Data available on Forbes.com).

      Schultz runs a multi-national enterprise that sells premium coffee at premium prices – but the employees are paid near-poverty wages. (In Chile, for example: http://www.reuters.com/article/2011/07/07/starbucks-idUSN1E76523020110707)

      People working for a company that paid its CEO nearly $150 million over the past 3 years shouldn’t have to rely on government food programs to feed themselves and their families. There’s something wrong with a system that values the executive who takes (by your math) $3 per day out of 17,000 stores – without ever pouring a cup of coffee at one of them.

      Schultz certainly deserves to be compensated for his work – but not at the expense of Starbucks workers.

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