The Nation's Pulse

Stamped for Failure

Welcome to California, where it pays not to work.

By From the May 2010 issue

It's a sunny saturday afternoon in balmy Santa Cruz, California. Commercial stalwarts the Gap, Starbucks, and Borders Books, as well as a handful of locally owned stores and restaurants, are open for business, hoping to lure weekend shoppers with money to spend. Those prospective shoppers, however, are engaged in a somewhat less enjoyable activity: they are trying desperately to avoid the aggressive panhandlers, street musicians, and drug dealers who congregate daily in Santa Cruz's central business district.

In recent years, things have changed. California has become a place where thousands upon thousands of people have simply made the decision to not bother to work. Instead, they spend their days lounging on the streets, playing music, smoking pot, and harassing passersbys. And they are able to sustain this lifestyle, thanks to California's generous public assistance policies.

IN 1976, FUTURE PRESIDENT Ronald Reagan, himself a former governor of California, took to the airwaves to assail what he called "welfare queens" -- those people who refused to work, instead living comfortably off government handouts. In those decades, it was unlimited cash benefits, or welfare, that created that entire class of indigent people. In 2010, things have changed -- at least somewhat. Today, it is food stamp policies that are helping people to refuse to work.

Food stamps are nothing new. In fact, they have been around in some form since the Great Depression. The benefits, which were formally renamed the Supplemental Nutrition Assistance Program (SNAP) in 2007, are currently being supplied to a record number of Americans. As of winter 2009, nearly 40 million people were receiving food stamps -- roughly one in eight Americans. Santa Cruz County reported a year-on-year increase in food stamp use of 38 percent from 2008 to 2009, and has announced it expects yet more record growth in 2010. Plainly, much of the growth in food stamp use is attributable to the recession. Many Americans who have never received public assistance before are now turning to food stamps. In part, this is because food stamp use has become increasingly destigmatized. Because the benefits are now dispensed on a plastic card designed explicitly to resemble a credit or debit card, instead of cumbersome and potentially embarrassing paper stamps, people are able to use them discreetly.

Yet this does not characterize the entirety of those who rely on food stamps. Indeed, for many Californians enrolled in the program, work is something they have consciously elected to shirk. I've spoken with Californians who have decided not to work because, as one middle-aged man put it, "Why should I? To get a bunch of money that I can't buy anything with?" Another told me that he does just fine playing music on the street. (Santa Cruz buskers are said to bring in around $15 an hour.) Some even view refusing to work, and subsisting on food stamps instead, as a form of subversion. "I'm sticking it to the man!" one man in his early thirties said when discussing his food stamp benefits.

Food stamps are funded primarily through federal dollars. Individual states conduct the programs themselves, meaning that the application processes, standards, income requirements, and benefit levels are determined on a state-by-state basis. It's the way California administers its food stamp program that has led to a climate of such flagrant misuse.

It is remarkably easy to apply for food stamps in California. Indeed, judging by the layers of bureaucracy that I had to navigate to get an interview with someone at Santa Cruz County's Human Services office, I'd venture to say it's easier to get food stamps than to conduct an interview about them. After more than a week of negotiations -- Obama demands fewer preconditions to meet with Ahmadinejad -- I was finally able to speak with Claudine Wildman, a director at the Santa Cruz County Human Services Department.

Wildman was kind enough to walk me through the application process. It begins with a one-page paper or Internet application ascertaining the applicant's income level and household makeup. After that, someone from the Human Services department conducts a food stamp "interview" in person or by telephone. The procedure requires little subjective human judgment. The questions asked, and criteria for judging whether a person qualifies for food stamps, are determined by a computer program. A single mother struggling with two jobs and a 22-year-old "musician" are treated the same way. Assuming that the applicant comes in under the income threshold, some degree of proof is required before the food stamps are administered. So long as a single applicant can produce pay stubs that show he earned less than $1,127 in a given month, he will receive food stamps. After that, within just a couple of days, the benefits are handed out.

Income is the only criterion. Resources such as houses or cars are not considered when determining eligibility. There are no work requirements. There are no drug tests. There are no time limits. Astonishingly, there are not even citizenship requirements -- most immigrants that can prove legal U.S. residence qualify.

California's standards adhere to the federal minimum, which requires income and proof of residence as the sole criteria for receiving benefits. But it doesn't have to be this way. Indeed, other states apply far more rigorous standards. Pennsylvania, Michigan, and Illinois demand information on utility bills and mortgage payments when deciding eligibility. Texas, Georgia, and North Carolina take into account applicants' assets, such as vehicles, and Florida considers evidence such as credit union statements. Ohio requires a face-to-face interview. Of the 10 most populous states, only California and New York ask the federal minimum.

Furthermore, in California, not only are barriers to entering the program scant, but people are outright encouraged to apply for food stamps. Bureaucrats in Sacramento, viewing the benefits as a form of economic stimulus, have said they hope people enroll in the program.

And it's true that food stamps are a boon to the state's grocery stores. The stamps can be used to purchase almost all cold grocery items, because the determination of what is buyable on food stamps is entirely temperature-based. It goes without saying that money not spent on food is money that can be spent on something else. It is not uncommon in Santa Cruz to witness a young person reeking of marijuana buying a pint of ice cream on his food stamp card. In effect, the food stamp program is subsidizing his drug habits.

SANTA CRUZ IS SOMEWHAT of a hub for the voluntarily jobless. The city of 50,000, nestled on the northern edge of Monterey Bay some 70 miles south of San Francisco, has long had a reputation for political radicalism. These days, as the 1960s recede, Santa Cruz has also gained a reputation as a great place to shirk work and just hang out. And while the phenomenon of people simply choosing not to work is particularly visible in Santa Cruz, it is also happening across the nation's most populous state. The policies and standards detailed above describe the procedures throughout California.

Not only does California place minimal strictures on those applying for food stamps, but it also renders the food-stamp-collecting life more lucrative than elsewhere by granting higher average benefits. According to U.S. government statistics, in fiscal year 2008, the average food stamp benefit per household nationwide was $227 per month. In California peers such as Texas, that figure was $271, and in Florida, it was $250. In California, by contrast, the average was $300 per household, and, according to the Los Angeles Times, that figure is set to rise to $341 per household in 2010. And the administration of food stamps creates perverse incentives: the less one works, the more food stamps one receives. Those with zero reportable income -- including the voluntarily jobless -- receive the maximum allowable amount. (For a single person, that is $200 per month.)

According to the latest data, the unemployment rate in California is 12 percent, 13.5 in Santa Cruz County. There is anecdotal evidence to suggest that the unemployment crisis may be somewhat overblown. I spoke with a young woman named Katrina who began work at an organic grocery store in Santa Cruz in November. She recently finished college back in her New England home state, and moved to California to be close to her brother, who lives in San Jose. (The weather didn't hurt either.) Within five days of moving to Santa Cruz, Katrina had found a job. Her roommates in Santa Cruz, however, have elected to take a different course: "They smoke pot all day, and get their food from food stamps," Katrina laments. "The media talks about the unemployment crisis here, but there is no incentive to work!" With increasing data suggesting that unemployment benefits often serve to prolong periods of joblessness, it remains an open question whether California's unemployment "crisis" is as bad as the media would have us believe.

It would be difficult to subsist solely on food stamps -- at most, a person can collect about $7 a day. Yet when combined with other benefits, such as unemployment insurance, and in some cases, limited cash assistance through welfare, living the life of Riley becomes more attractive. What's more, many people who have chosen not to work collect unofficial, untaxable, and unreported income-through panhandling, playing music, or other less savory activities. They've elected to live a life of leisure, and California has made it easier. And of course, it does not help that the state punishes actual working people with punitive taxes. Sales taxes in California are 8.25 percent, the nation's highest, and many local jurisdictions levy even higher rates. For those items that are both taxable and buyable on food stamps, such as soda, the tax is refunded.

BEFORE THE LANDMARK 1996 welfare reform, welfare recipients received non-expiring benefits without any work requirements. Yet when it comes to food stamps, the welfare reform moment has yet to happen.

To be sure, the policy of non-expiring benefits has its critics. Robert Rector, a fellow at the Heritage Foundation in Washington, recently told the New York Times that food stamps are "quasi-money," and argued that "the food stamp program is a fossil that repeats all the errors of the war on poverty." Yet, for the most part, the powers that be look set to continue to encourage food stamp use. George W. Bush's administration enacted a program to encourage people to enroll in food stamps and introduced the plastic cards. The current administration is continuing the policy of normalizing food stamp use, and it included funds for higher food stamp benefits in the 2009 stimulus bill.

Many on food stamps genuinely need help -- the working poor, beggared by California's high real estate prices and tax rates, are especially in need of a hand. But there also exists a large group of Californians who have simply chosen not to work. There is a certain logic to their decision. Working a job, after all, especially in a non-skilled position, is not necessarily fun. If a state government wants to subsidize a lifestyle of sloth, it's hardly surprising that some have decided to take advantage of the opportunity. Ultimately, it is the state of California that is the culpable party.

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About the Author

Ethan Epstein is an editorial assistant at the Weekly Standard.