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Working & the Economy

Calculating How to Go Hungry

Former House Speaker Paul D. Ryan (R-Wis.). Congressional photo

To understand how food stamp benefits are calculated is to understand England’s Poor Law of 1834.

Although the British Poor Law was far harsher than anything we have today, both it and the current system of food stamps share a common philosophy: the poor must be goaded into working.

Prior to the Poor Law, aid to the poor was handled by the local parish, a system that a royal commission in its report to Parliament said was far too lenient. Instead, Parliament took the care of the poor away from parish care and created infamous “workhouses.” While you would be fed and sheltered in a workhouse, life there was designed to be so unpleasant you would rather take any kind of work than land in one.

Or as the report put it, the goal was “to provide for those who are able to work, the necessaries of life, but nothing more…that he would rather do his utmost to find work, by which he could support himself than accept parish pay.

One hundred and seventy-seven years later, ex-U.S. Rep. Paul Ryan (R-Wis.), the former Speaker of the House, put it more succinctly. “We don’t want to turn the safety net into a hammock that lulls able-bodied people into complacency and dependence,” he said.

And what better way to do it than by making sure people who do get food assistance through the government never get enough. And the main instrument to achieve that goal is the series of calculations the government uses to decide how much a person or family will get in benefits.

Catlin Nchako, a research analyst at the Center for Budget and Policy Priorities (CBPP), a liberal think tank in Washington, D.C., has spent the last six years analyzing the food stamp program and has long experience in calculating food stamp benefits.

It starts, he says with determining what is called “countable” income. For a family of three, a mother who is earning Maryland’s minimum wage of $11 and her two children, this begins with a standard deduction of $164 and, more importantly an earnings deduction of 20 percent. It is the earnings deduction that is the first poke the government takes to prod people to work.

If you are working, you will get a larger benefit because the earnings deduction will make it seem that you are poorer than you actually are. For our hypothetical family earning $1,906 per month, their countable income is now $1,525.

When people who are working are favored, it means those who are not working are put at a disadvantage.

Nchako used as an example two families each made up of three people with identical incomes at the federal poverty level. But one family gets $249 per month from food stamps because all its income is from wages, while the other family, which lives off Social Security, receives only $93.

It’s not that retired people eat less. It’s that, because of its design, the food stamp calculation is intended to drive people back to work, even the elderly.

The next deduction is for childcare. Assuming the mother pays $122, she can lower her countable income by the same amount. Now the countable income is $1,403.

The final deduction is for shelter and it is a bit convoluted. The income of $1,403 is divided in half and that number, $701, is subtracted from the actual shelter cost. Assuming our family is paying $925 a month for a studio apartment – the fair market rent in Anne Arundel County – this would yield a deduction of $224. When that deduction is applied to the income for our family of two, their countable income is now $1,179.

Because the government assumes a family spends 30% of its countable income on food, it figures the amount the family is spending to eat is $353. And it is at this point the government pokes the family again.

The maximum allowable benefit for a family of three anywhere in the lower 48 is $509. Since the family is already spending $353, their shortfall is $156. And that will be the monthly value of their food stamps.

But there is a problem with that calculation. By using a maximum benefit of $509, the government assumes that food prices are identical everywhere in the country. They are not.

It also assumes that $509 is adequate for a family of three. Again, that seems dubious.

Nchako said that half of all food stamp families spend what they have during the first two weeks of any month. The assumption is also belied by the actual cost per meal. While the government benefit says you can survive on $1.40 per person per meal, a study by the Nielsen Company, which adjusted for location, says that the actual number in Anne Arundel County is $3.34.

The bottom line, Nchako says, is that the current food stamp benefit “isn’t sufficient.” And if the Poor Law of 1834 is any guide, that may be the goal.

But even if one believes that less than adequate food stamps benefits will encourage people to work, it raises another question. The financial stick that beats the parent beats the child as well. And a government policy that forces children to go hungry is at best questionable.

Read the whole series:

Part one: Meet the Food Stamp Firms of Maryland, plus Bum Blockade: How We Got the Food Stamp Data

Part two: All About the Hunger Industry, plus The Tax Deduction Recipe That Feeds Hunger

Part three: Measuring Hunger: One Size Does Not Fit All

Part four: The No Man’s Land of Childhood Hunger

Part five: When the Floor Becomes the Ceiling

Part six: There’s No Wage Like the Minimum Wage

Part seven: The Volunteer Army Trying to Fight Hunger


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Calculating How to Go Hungry