Food Stamps The New Cash Tender For North Carolinians

11:18 AM, May 11, 2009   |    comments
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North Carolina-- Since the start of the recession, North Carolinians have received $1.6 billion in food stamp benefits. These payments, in turn, have generated $2.8 billion in economic activity across all 100 of the state's counties. Absent food stamp benefits, the state's economic woes would be worse.

These findings come from a new NC Budget and Tax Center ( BTC ) Brief authored by John Quinterno, a research associate at the Center. The brief estimates the statewide and county-by-county impacts of food stamp payments made between Dec. 2007 and Mar. 2009.

"Food stamp benefits help low-income families and households struggling with a dramatic loss of income make ends meet," says Quinterno. "Because most benefits are spent quickly at groceries and area stores, the payments also help to maintain local economic activity."  "So far during the recession, food stamp benefits have generated $2.8 billion in economic activity," explains Quinterno. "This is equal to 1.7 percent of all the wages paid in the state in 2007."

To compute the economic impact of food stamps, the author compiled monthly payment information from the North Carolina Department of Health and Human Services and applied an economic multiplier of $1.73. This multiplier is in the mid-range of published values, which makes the resulting estimates conservative ones.

During this recession, food stamp payments have benefited all 100 North Carolina counties. In dollar terms, the economic impact has been most pronounced in Mecklenburg County ($262.1 million), followed by Guilford ($161.4 million), Wake ($140.6 million), Cumberland ($125.3 million) and Forsyth ($95.8 million) counties. Relative to the size of local wage bases, the economic impact has been greatest in Caswell County, followed by Warren, Martin, Perquimans and Washington counties.

"The importance of food stamps benefits is growing as the recession worsens," notes Quinterno. "Since the start of the recession, the number of households receiving food assistance has increased by 21 percent. In March, 1.2 million North Carolinians lived in households receiving assistance. If those individuals gathered in one place, they would form a metro area almost as populous as Charlotte."

Additionally, households receiving food stamps recently received a boost from the federal recovery legislation, which authorized a temporary 13.6 percent increase in the value of food stamp benefits. The additional money not only will help low-income households weather the economic storm, but also will bolster local economies when the funds are spent at area retailers.

Click here to see the full report and county by county breakdown of Food Stamps awarded.

NC Justice Center

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