Sorry for the horrible transition but I want to recount a little history of myself. When I was young, like around 12 or 13 years of age (only 8 to 7 years ago) my mother used to be on Welfare and the Food Stamp program. Yes, we were quite poor (and we still are today, relative to the average US income but rich compared to the average incomes of other nations). Every month the government sent my mother around $300 worth of food-stamps. You might think we were dirt poor but my mother always managed to buy my brother, sister, and I good clothing, feed us every day, and still shop for luxuries like cosmetics. Perhaps we weren't so poor after all.
What I hated the most about this welfare thing was when my mother would ask me to go to the store. Boy oh boy, did I hate going to store. It wasn't because I couldn't finish playing videos games or playing "Man Hunt" in the street with my friends. It was because I felt embarrassed buying food with these weird looking coupons that signaled to everyone in my surrounding that I was poor.
In economic terms, there's a social cost attached to purchasing food with coupons. That social cost made me dislike consuming a good, which in this case, was taking a walk to the store. The higher the social cost attached to buying food, the less I wanted to go and buy food.
We can look at this analogy a different way. The higher the social cost attached to letting other people know you're poor, the less you will want to participate in these government programs.
Today, I still have that little demon on my shoulder reminding me to get a college degree and never have to deal with that again.
This story reminds me of a political debate surrounding the problems with welfare. I don't recall from where I read this but liberals and conservatives were debating (as usual) on whether or not to simply give actual dollar bills to those in "need." Those in favor of distributing dollar bills in placement of coupons argue that the current food-stamp program is degrading. In my opinion, that's exactly the reason why "alternative" forms of purchase for the poor are necessary - because the social costs will be higher and less people will use the program. Perhaps, they should institute a program where people on welfare must wear t-shirts that say "I take government money."
Those who need the program will use it while those who don't need it will think twice! I'm pretty sure my mother would have thought twice.
For those of you who want to know about actual welfare economics - which is different from what I discussed, perhaps ya'll should Google subsidies and compensating/equivalent variations. This stuff is NOT for the lay reader.
©2008 Jeff Peters, all rights reserved. You must have written permission from the author in order to republish this work.
Published: Saturday, September 6, 2008
Last modified: Saturday, September 6, 2008
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Reader Comments:
Posted By: Maria Folsom
Date: 2008-09-07 15:50:50
Christopher, while I mostly agree with you, I happen to live in a neighborhood (northwestern rural Montana) where food coupons are a status symbol. Really! Recipients are proud to use them openly around here. They are even used (illegally, of course) as an underground currency of sorts. (This factoid is heresay; the proud usage is a first-hand observation.) So it depends on the local culture and the popular mentality.
Posted By: Christopher Espinal
Date: 2008-09-07 18:12:16
That is certainly true!