If we look at the unemployment rate in the U.S., it seems that everything is improving. U3 unemployment has dropped from 10% to 8% in the last two years. U6 unemployment came from 17% to 14% in 2 years.
Chart 1: Percent of Population on Food Stamps |
If we compare the unemployment rate (Chart 2) against the percentage of the population on food stamps (Chart 3), we can see that there is a correlation here. In 1970 for example, the U3 unemployment rate was 5% with a food stamp percentage of 2%. Then we peaked in 1982 with a U3 unemployment rate of 10% and a food stamp percentage of 10%. The unemployment then dropped to 4% in 2000 with the food stamp percentage dropping to 6%. And since then the food stamp percentage has hit a record of 15% today.
Chart 2: U3 and U6 Unemployment |
Chart 3: Percentage of Population on Food Stamps |
So there you go, another correlation, one that accounts for underemployment by discouraged and part-time workers. We are in times of wage stagnation and will have difficult times up ahead.
Data on the Food Stamp Participation Rate can be found on the SNAP website.