How welfare recipients spend their money: It's not steak and seafood.

Forget Steak and Seafood: Here’s How Welfare Recipients Actually Spend Their Money

Forget Steak and Seafood: Here’s How Welfare Recipients Actually Spend Their Money

Moneybox
A blog about business and economics.
April 15 2015 1:04 PM

Forget Steak and Seafood: Here’s How Welfare Recipients Actually Spend Their Money

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There's a reason it sells.

Photo by David McNew/Getty Images

Red-state lawmakers have been on a rather unnecessary crusade lately to stop welfare and food stamp recipients from spending their government aid on luxuries like cruises and supermarket king crab legs. This has, thankfully, led to some discussion about how low-income families actually use their money—which is to say, not all that differently than the rest of us. (More of their budgets generally go to food, because people have to eat.)

This all reminded me of one of my favorite graphs on this subject. In 2013, Ann Foster and William Hawk of the Bureau of Labor Statistics used data from the Consumer Expenditure Survey to analyze the spending habits of families who receive public assistance, including food stamps, cash welfare, housing aid, or Medicaid. Unsurprisingly, their budgets tend to be quite modest. Their big budget items are housing, transportation, and food, spending on which came out to about $6,460 per year, or about $124 per week. That's for an average family of 3.7 people—meaning roughly $33 per mouth to feed. Based on some brief online searching, king crab legs cost about $34 a pound these days (though bulk discounts might be available).

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Jordan Weissmann

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Here are those expenses broken down into weekly totals, which might be a bit more comprehensible.

welfare_recips_2

The point of these charts isn't that food stamp and welfare recipients never overspend, or make what might seem to be poor financial decisions. (Personally, I would love to see a distribution curve showing the range of spending patterns among families). Nor am I suggesting that these programs are 100 percent free of fraud; believe it or not, investigators found cases in California where welfare beneficiaries withdrew their benefits on cruise ships (the state later banned them from doing so). The point is, these are fringe cases, and they're used to demonize a group of people who are often working extremely hard just to get by.

Jordan Weissmann is Slate’s senior business and economics correspondent.