I spent part of Monday out in St. Charles. In front of the McDonalds locations on Elm Street and Fifth Street they had banners, ‘Now Hiring, $10 An Hour.’
Tuesday I read the state audit of Missouri’s food stamp program. Nicole Galloway’s office gave the bureaucrats’ efforts a “Fair” grade: after reading all of the report I’d have gone with “Poor,” or, “Very Incomplete.”
Let’s start with a little history. Back in 1972 McDonalds’ czar Ray Kroc slipped the Committee To Re-Elect The President (“CREEP”) an illegal $250,000 to persuade Richard Nixon to support a subminimum wage for teenagers. [ https://www.brennancenter.org/blog/justices-should-think-quarter-pounders-latest-money-politics-case ] McDonalds still fights increases in the minimum wage, lately threatening to unleash robotic arms to fry fries instead of paying workers more [http://www.businessinsider.com/mcdonalds-ex-ceo-takes-on-minimum-wage-2016-5 ].
So, when McDonalds offers $10.00 an hour starting pay it’s not a sign of generosity but of desperation…They lack any chance of getting enough workers to operate unless they pay 25% above Missouri’s current minimum wage. [ https://labor.mo.gov/DLS/MinimumWage ]
The peril of not paying $10.00 an hour gets demonstrated every day near my home. That McDonalds refuses to match the $9.00 an hour starting pay at the Burger King a block away. The result? At Burger King you get your food in a couple of minutes. At McDonalds on Wednesday I waited 20 minutes for two burgers and a medium order of undercooked fries. (Where are those robotic arms when you need them?)
Even with reduced benefits and slashed enrollment, food stamps pump better than a billion dollars a year through cash registers, virtually all of them in Missouri. Correctly, the audit found that a small portion of Missouri issued stamps get redeemed in other states. [ https://auditor.mo.gov/content/auditor-galloway-finds-not-enough-being-done-prevent-or-detect-abuse-food-assistance-program ] Some of that out of state use is predictable. I remember a Clark County Missourian telling me that ‘all we sell is beer, cigarettes and fireworks.’ A drive up the Avenue of the Saints proves that true. Most families there go east to Keokuk or Fort Madison in Iowa to do their food shopping.
On the other hand, people using their Missouri Electronic Benefits Card just in Texas for 90 days straight could point to fraud – or something close enough to investigate.
Problem: Missouri doesn’t have the staff or information technology to properly investigate fraud.
The Missouri legislature – enabled by governors from both parties – traditionally severely underfunds the administration of food stamps and other benefit programs. Most food stamp cases get processed in a COBOL based computer program from the mid-1990’s. Case management gave way to cheaper Call Centers and Processing Centers – leaving no particular state employees accountable for monitoring individual cases.
The good news? Evidence seems to point to 99% of food stamp families following the rules. The bad news? The same lack of resources which prevents investigating fraud also makes it impossible to verify that 99% estimate.
Auditor Nicole Galloway’s staff includes a ton of contextual data in their audits. For example, the food stamp review report includes charts/maps showing food stamp participation and the poverty rate in every county. For example, St. Charles County has a poverty rate of 6.1% [audit p. 6] while 3.87% of residents get food stamps [p. 9].
Wait a minute! Since food stamps help those with incomes up to 30% above the poverty line, shouldn’t the total getting stamps be at or above that poverty rate? Too bad Missouri doesn’t have money to do outreach to let folks know about the help they could get to feed their families.
You see, in the end, it’s still about money. Restaurants have to pay what the market demands to get and keep staff or they wither. The state goes cheap on running their food stamp program, resulting in an inability to detect, investigate or mitigate fraud. It turns out that often you don’t save money by not spending it.
Submitted by Glenn Koenen, WCD Member