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This article talked about the historical reasons why the food stamp program is part of the Farm Bill. It had an interesting statistic within it:

FDR also supported creation of the first Food Stamp Program, in 1938. The program operated by permitting people on relief to buy orange stamps equal to their normal food expenditures; for every one dollar worth of orange stamps purchased, 50 cents worth of blue stamps were received. Orange stamps could be used to buy any food; blue stamps could only be used to buy food determined by the Department of Agriculture to be surplus. Over the course of nearly four years, the program reached approximately 20 million people in nearly half of the nation’s counties, and cost a total of $262 million (about three billion dollars in 2006 dollars).

The USDA tracks the Supplemental Nutrition Assistance Program (SNAP) participation and costs. It notes that in 2006-2012:

Fiscal
Year
Average
Participation
(Thousands)
Average
Benefit
per Person1
(Dollars)
Total
Benefits
(Millions of
Dollars)
All Other
Costs
(Millions of
Dollars)
Total
Costs
(Millions of
Dollars)
2006 26,549 94.75 30,187.35 2,715.72 32,903.06
2007 26,316 96.18 30,373.27 2,801.21 33,174.48
2008 28,223 102.19 34,608.40 3,033.64 37,642.04
2009 33,490 125.31 50,359.92 3,261.58 53,621.49
2010 40,302 133.79 64,702.16 3,611.30 68,313.47
2011 44,709 133.85 71,810.92 3,904.59 75,715.51
2012 46,609 133.41 74,619.46 3,817.33 78,436.79

1Represents average monthly benefits per person.

In the first 4 years of running the food stamp program, it served 20 million people for $3 billion, or $150 per person (in 2006 inflation-adjusted dollars). In 2006, SNAP served 26 million people for $30-$33 billion, or $1,137-$1,239 per person. Why is there an 8 times increase in the per person cost of running the program?

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    Question is, what was the relative cost of a food basket then and now? Inflation-adjusted isn't necessarily food-basket adjusted.
    – user4012
    Jul 7, 2013 at 15:26
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    Another part of the answer may simply be the fact $150 doesn't get a whole heck of a lot of food for the year also.
    – xuinkrbin.
    Jul 9, 2013 at 5:26
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    While @DVK has already mentioned this, it is worth explicitly restating: any inflation measure is normative. CPI measures what the States' bureau of statistics is told to measure as "consumption," and what they believe they ought to measure. These "consumption bundles," represent normative accounts of what is believed "fit" for workers, sometimes broken down segmentally, to eat, wear, (sometimes) rent, drink, smoke, gamble. Sometimes with categories set at zero. CPI may not meaningfully reflect SNAP recipients living costs over time as they're below CPI bundle consumption levels. Aug 19, 2013 at 4:54
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    Population changed? Quality and quantity of food changed? Overall inflation is different from inflation on agricultural products? Higher percentage is people needing food support then than now? There are many possibilities. Apr 5 at 5:28
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    The table of modern values is confusing. The average benefit per person is monthly, but the last three columns appear to be annual. The 1938 figures seem to be a total program cost over 4 years, so it would be $37.50 year 2006 dollars per person per year, if 20 million is really correct. I suspect that there is a lot of double counting in the 20 million figure which might really be 20 million monthly disbursements or 20 million annual disbursements rather than 20 million actual beneficiaries. OTOH, the Great Depression was characterized by massive non-monetarily driven deflation.
    – ohwilleke
    Apr 5 at 6:04

3 Answers 3

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Quite simply, the standard of living for the average American has increased so dramatically that to equate a 1938 poverty level with a 2013 level 75 years later would not be practical. The same amount of "stuff" (e.g. living space, calories, leisure time) that would have made a person "rich" in the midst of the Great Depression would comparatively be "poor" by more modern standards.

As a thought exercise, drive through the inner suburbs of, say, Detroit - a city that was booming in the early part of the century. There, the average house may be around 700 - 900 square feet, give or take. Those houses aren't 'slum' but neither are they rich.

Now, do the same thing in San Jose or Fairfax County - counties that developed much later. The average house size is going to be more in the 1400 - 2000 square foot range. Why? The answer isn't really climate - it's wealth. Wealth, as they say, is a rising tide that lifts all boats.

This same phenomenon explains why a middle class American gets more calories and has a bigger house than a middle class Briton, German, or even Brazilian. There are differences in the standard of living.

The poverty line in the United States is based on a relative measure - not an absolute one. The poverty line is based on the diet of an average American living in 1963 (cite), a standard of living that is far in excess of that in 1938. Using this constant as a measure, the proportion of households that could not get this fixed amount of calories in 1959 was 22%. In 2011, it was 15%. That is a dramatic difference, and is reflected in a higher standard of living. In 1938, in the throes of the Great Depression, that number probably would have been much, much, higher, meaning that a "middle class" person consuming the same amount of resources in 1938 would have needed to be much, much richer.

Simply put, everybody was richer in 1963 than in 1938. Relatively speaking, poverty - meaning towards the end of the spectrum - was a much lower thing.

As an interesting aside, the Economist has a great article comparing the depth and breadth of welfare vis a vis 'poverty' across Asia that bears some meditation.

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    "why a middle class American gets more calories and has a bigger house than a middle class Briton, German, or even Brazilian" ... that whole paragraph is just odd. Neither calorie intake nor "house size" btw. US <-> UK or Germany should be explainable by "wealth". And what does the Brazil comparison, a country with less than half the PPP GDP of Britain, have to do here?
    – Martin Ba
    Oct 26, 2020 at 22:41
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The data cited isn't really accurate.

According to the U.S. Department of Agriculture:

The program operated by permitting people on relief to buy orange stamps equal to their normal food expenditures. For every $1 worth of orange stamps purchased, 50 cents worth of blue stamps were received. Orange stamps could be used to buy any food. Blue stamps could only be used to buy food determined by the Department to be surplus. . . .

Over the course of nearly 4 years, the first FSP reached approximately 20 million people at one time or another in nearly half of the counties in the United States, peak participation was 4 million, at a total cost of $262 million.

A slightly more in-depth analysis can be found here:

The first Food Stamp Program came about as a result of the need to distribute excess farm commodities during the Great Depression. After World War I, exports to Europe decreased and farm prices continued to drop during the 1920s. Between 1929 and 1932, commodity prices fell more than 50%. Although farmers were producing bumper crops of wheat, they still had less than half the income of non-farm families. In 1933 about 25% of Americans lived on farms as compared to the 2% of the US population living on farms today (7). As part of President Franklin Delano Roosevelt’s New Deal, Congress passed the Agricultural Adjustment Act of 1933. The purpose of the act was to provide farmers with more income and distribute food to the needy. This mission was carried out by the Federal Surplus Relief Corporation, which became the Federal Surplus Commodities Corporation in 1935. By 1938, the federal government was purchasing, transporting, storing, and distributing massive amounts of food to state and local relief agencies. Although most citizens supported transfer of surplus foods to the needy, some criticized the Federal Surplus Commodities Corporation because the process duplicated services being provided by the private wholesale and retail grocery industries (8). To address these concerns, Secretary of Agriculture Henry Wallace had the idea for the first Food Stamp Program.

On May 16, 1939, Mabel McFiggin of Rochester, NY, became the first relief recipient to purchase food stamps. Eligible people could spend cash they ordinarily used for food to purchase orange stamps. As a bonus, they received $0.50 worth of free blue stamps for every dollar they spent. Participants could use the orange stamps to buy any food; however, blue stamps could only be spent for foods the USDA had declared as surplus (7). The idea behind requiring needy families to purchase stamps was that “income normally spent on food would not be diverted to nonfood items owing to the subsidy embodied in the free blue stamps” (9). During the 4 years of the program, the top-20 blue stamp surplus foods ranked in descending order were dry beans, flour, corn meal, eggs, fresh vegetables, hominy grits, apples, butter, oranges, dry prunes, pears, pork, raisins, grapefruit, potatoes, lard, rice, dry onions, peaches, and plums (8).

Both the orange and blue stamps were printed in $0.25 denominations and during the course of the 4 years from May 1939 through March 1943 were distributed in nearly half the counties in the country, covering an area where more than 60% of the population lived. Major cities were targeted and people in New York City received 14.4% of the total subsidy in early 1942. Peak participation in the first Food Stamp Program was 4 million people, although over the 4 years nearly 20 million citizens received benefits (8).

The only state that did not receive food stamps was West Virginia. This was due to a provision in the state’s legislation that did not permit exemption of blue stamp sales from tax. To address the depression in that state, West Virginia received other types of direct assistance rather than food stamps.

Joseph Mutolo was the first retailer to redeem the stamps. Like other grocers, he converted the stamps into cash through food wholesalers or banks. There were reports of illegal trafficking in food stamps and the first retailer caught violating the program was Nick Salzano in October 1939 (7).

During the 4 years that the first Food Stamp Program lasted, cost to the federal government was $262 million (7). Adjusting for inflation that would amount to a 4-year program costing about $3.7 billion today (10). With never more than 1,000 federal employees engaged in the plan operations, administrative costs of that initial program were only about 3% of total funds spent. Thus, much of the operational burden was carried by state relief agency employees who certified households as eligible and largely ran the program (8). Milo Perkins, the first Food Stamp Program administrator stated, “We got a picture of a gorge, with farm surpluses on one cliff and undernourished city folks with outstretched hands on the other. We set out to find a practical way to build a bridge across that chasm.” With World War II came a booming economy that largely erased the unmarketable food surpluses and widespread unemployment of the Great Depression (7). The first Food Stamp Program ended in spring 1943.

The ultimate source for all the modern accounts of the number of beneficiaries is a 1947 journal article which is closed access.

Thus, by design, the biggest benefit you could receive was a third of your total, post-benefits food expenditures. And, if you were really poor, and could only afford a small amount of food, you couldn't afford to buy many food stamps. The program bore little similarity to the modern food stamp program which started in 1961 and was revamped significantly in 1963.

The plan was also carried out as a price management measure for food at a time when food prices were artificially low due to a demand shortage, leading to on oversupply of perishable food inventories.

Also, the average number of beneficiaries at one time was less than 4 million during that four year period, so the average amount of time that any given person received benefits was less than ten months, probably significantly less.

As a result, the 1939-1943 data for the program (it really started in 1939 not 1938) isn't comparable to the modern Food Stamp program data on an annualized basis.

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How about you check the details of what was and wasn't included, what the prices for food were at the time and what they are now, like inflation might hit different parts of the purchasable goods differently. Also 1938 to 2006 is a long time span, especially considering that you're not even talking about the same food stamps program:

https://en.wikipedia.org/wiki/Supplemental_Nutrition_Assistance_Program#History

Like there have been various programs and Food Stamp acts since 1938. Also to add some more data points:

  • year / cost per person / benefit per person
  • 1938 ~$150 --
  • 1970 ~$681 ~$31
  • 1980 ~$1053 ~$83
  • 1990 ~$1171 ~$90
  • 2000 ~$1145 ~$83
  • 2010 ~$1543 ~$121
  • 2019 ~$1314 ~$101 (pre-covid inflation)

So already 1970 had roughly 4-5 times the cost for 1/6 of the people. Also likely the food stamp program during the great depression had a different nutritional goal in mind. Like at that time you probably had a much bigger agrarian and industrial sector so higher calorie consumption, while produce was probably more widely available. While nowadays you can pretty easily get unhealthy amounts of calories but getting healthy nutrition is expensive.

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