Selected SLC Research


Policy Analysis | November 9, 2010

Economic Impact of the Great Recession

The persistent economic slowdown following the Great Recession has impacted many sectors, both public and private, families and vast numbers of individuals throughout the nation, as well as the South. As indications of a recovery become apparent, there still are distressing indicators of the long-lasting effects of the Great Recession. Unemployment, which rose above 9 percent nationally for the first time since September 1983, peaked nationally at 10.1 percent in October, 2009, and has only fallen slightly (to 9.6 percent) in October 2010. More disconcerting than the total unemployment picture, however, is the number of Americans who are considered long-term unemployed, especially those who have been out of work for more than a year. In the second quarter of 2010, 31 percent of the 14.6 million jobless in the United States had been unemployed for 52 weeks or longer, a figure that amounts to 2.9 percent of the total labor force according to the Bureau of Labor Statistics. Prior to the start of the Great Recession in the first quarter of 2007, the number of long-term unemployed was only 9.5 percent of the total unemployed population (which was itself only 4.5 percent of the labor force). In addition, according to The New York Times, the overall average length of time for remaining unemployed in United States increased to a record 35.2 weeks this summer. The impact of long-term unemployment has compounded the unemployment picture in a number of ways, including increasing the number of applicants for food aid through the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps) of the United States Department of Agriculture (USDA).

Recently released data from the USDA states that 17 percent more Americans depended on government assistance to purchase food over the previous year. Nationally, 42.3 million Americans in 19.7 million households-14 percent of the population-relied on assistance from the USDA in August 2010, an increase of 1.3 percent from the previous month. In the region, food stamp use exceeded the national average in all but one state (Virginia). Mississippi and Tennessee had the highest participation rates for the food assistance program, both with more than 20 percent of state residents receiving SNAP aid, followed closely by Louisiana and West Virginia at 19 percent each. Florida and Texas both recorded the fastest growth in their ranks of SNAP recipients at 26.1 percent and 25.2 percent, respectively. West Virginia recorded the lowest growth of any state in the country at 1.5 percent, although the state's participation rate of 19 percent places it well above the national average.

To be eligible for SNAP aid, individuals or families must have gross monthly income of 130 percent of poverty ($2,389 for a family of four currently) and net monthly income of 100 percent of poverty ($1,838 for a family of four currently). There are some exceptions for individuals receiving some forms of disability and for households that include an elderly person, among other factors. The income threshold is established annually by the U.S. Department of Health and Human Services. For 2010, the poverty threshold for a family of four is $22,050.

State

Number of people on foodstamps August 2010

Year-over-year change

Month-over-month change

Percent of population onfood stamps

Alabama

839,921

13.4%

1.7%

17.8%

Arkansas

480,144

9.8%

1.1%

16.6%

Florida

2,809,636

26.1%

2.2%

15.2%

Georgia

1,681,376

18.2%

1.4%

17.1%

Kentucky

805,040

8.9%

1.3%

18.7%

Louisiana

856,446

10.7%

0.6%

19.1%

Mississippi

594,788

9.2%

1.5%

20.1%

Missouri

927,068

9.0%

0.9%

15.5%

North Carolina

1,442,650

17.1%

3.6%

15.4%

Oklahoma

608,349

15.7%

1.2%

16.5%

South Carolina

829,862

12.5%

1.4%

18.2%

Tennessee

1,260,726

9.6%

0.7%

20.0%

Texas

3,803,719

25.2%

1.2%

15.3%

Virginia

820,549

15.1%

1.2%

10.4%

West Virginia

345,906

6.7%

1.5%

19.0%

U.S. total

42,389,619

17.0%

1.3%

13.8%

Source: USDA Food and Nutrition Service, Supplemental Nutrition Assistance Program Monthly Data, from the Internet site http://www.fns.usda.gov/pd/snapmain.htm, accessed on November 5, 2010.

The growth in the number of families receiving SNAP assistance coupled with the persistence of unemployment is a troubling reminder of the depth of the Great Recession. While unemployment has did not remain above the 10 percent mark for as many months as it did during the recession of 1982-1983, the Great Recession is being felt in the length of time individuals are experiencing employment, a situation that strains the financial wholeness of even those individuals who had saved prudently against misfortune. The policy implications of this data are dire. With a growing percentage of Americans needing government aid for food, their ability to participate in an economic recovery seems limited, indicating a longer and deeper recession than those in the past. With state budgets already strained and increasing calls to rein in spending at the federal level, concern over an increasing share of the population dependent on food assistance is merited.