The American Nightmare: Middle Class and Living on Food Stamps

240%.

That is how much the food stamp caseload has increased since the recession began in 2008. The 40% decline in average household net worth as well as the decrease in average income has 'hollowed out' the American middle class.

This has created a vicious cycle. Such a significant percentage of net worth is tied up in homes that the combination of stagnant job market and declining incomes has made it difficult for the housing market to revive, further exacerbating the problem.

One manifestation of this has been the exponential increase in demand for government assistance, particularly food stamps. The program is officially known as the Supplemental Nutrition Assistance program. It was started in 1964, offering approximately 350,000 people a total of $75 million dollars in various benefits to help ease their transition out of poverty. It was thought at the time that a nation as wealthy and forward-thinking as the US should not tolerate poverty and should do what it could to eliminate it. The actual stamps, handed in to stores or supermarkets, were phased out in the 1990s. As of October 2011, over 46 million Americans received $65 billion in benefits delivered primarily through an Electronic Benefits Transfer card.

No longer limited primarily to impoverished denizens of such infamously poor areas like the Appalachian Mountain area of West Virginia, the Delta region of Mississippi or inner city ghettos, food stamps have become an economic necessity for middle class and wealthy suburban communities. Despite this trend, political opposition to any sort of government assistance has become a popular ideological rallying point

The ethical, moral and economic question is whether a society that aspires to remain globally competitive can afford the cost of failing to assist its own populace. JL

Adam Reiss and Poppy Harlow report in CNNMoney:

Since the recession, persistent unemployment has left middle-class life out of reach for millions of Americans.

But few residents of Morris County, N.J., could have ever imagined they would end up on government assistance.
Morris County is known for its wealth and million-dollar homes. Median household income there is over $91,000. Yet, the number of people receiving food stamps in the area has nearly tripled in the past five years.

Phyllis Tonnesen is on the front lines of the epidemic. She works for the Department of Human Services Office of Temporary Assistance. In her 27 years at the agency, she says this is the worst she's ever seen it.

The food stamp caseload has increased 240% since the beginning of the recession.

5 job market dropouts
"These people thought they had the American Dream," Tonnesen said. "They had decent jobs, a home, a new car every five years, took the kids to the shore for vacation. Suddenly here they are applying for food stamps."

The Smiths are one of those families. That's not their real name. They want to keep their identity secret so their three kids won't be teased at school.

Four years ago, Mr. Smith lost his six-figure job of twenty years at a telecom company and ended up selling shoes for $10 an hour.

He quickly depleted his 401(k) as the family went from $130,000 a year in income to just $15,000. In this area of New Jersey, the United Way says it takes at least $60,000 a year for a family of four just to get by.

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The $250 in food stamps his family gets could come to an end soon because he has a new job selling janitorial supplies, putting him over the threshold for aid. He's now making about $15 an hour, while his wife works part-time at a local bakery, for $9 an hour. That's raised their yearly income to about $18,000.

"The help has dropped out so rather than getting ahead with a bit more money we are just treading water," says Mr. Smith.

Unable to sell their home, the Smiths stopped making mortgage payments in 2009 and expect to be foreclosed on any day now. At that point, they hope they'll be able to move in with friends.

The Smiths say their three children are learning some valuable lessons about life and the value of a dollar. Their daughter is a junior in high school and has been working as waitress at a local burger joint for the past two years. Their 18-year-old son is graduating from high school and already has a job at the local auto repair shop.

Their 15-year-old son is worried he will have to move away from his home and friends. "It's tough," he says. "We've been here a long time and this is where we spent most of our lives. Losing the house is tough."