An 'Indecent' Problem: MA Rep. Proposes Fixes For SNAP Workers

Second of a three-part series. This story was reported by Jimmy Bentley, Jenna Fisher, Neal McNamara and Alex Newman.

MASSACHUSETTS — It's a problem with no easy solution: thousands of working people in Massachusetts earn so little that they still qualify for food benefits.

Data provided to Patch by the state Department of Transitional Assistance (DTA) showed that 100 companies together employed more than 25,000 people who were getting some level of Supplemental Nutrition Assistance Program (SNAP) benefit in 2020. But more than 20 percent of all SNAP households in the commonwealth have at least one person who was working.

U.S. Rep. Jim McGovern (D-Worcester) has long been an advocate on issues related to hunger and nutrition and co-chairs the House Hunger Caucus. McGovern, says "there's something fundamentally wrong and indecent" about large corporations employing thousands of people enrolled in SNAP. McGovern said these companies take advantage of the tax code to pay very little in taxes, while simultaneously having taxpayers supplement low wages with federal assistance.

Previously in this series: For Thousands In MA, A Job Still Means Relying On Food Stamps

"Walmart makes a lot of money in profits," he said. "Amazon does, too. You mean to tell me they can't pay their workers enough of a wage to not have to rely on government assistance to make ends meet and put food on the table?"

McGovern says he supports three initiatives he believes will lift workers out of poverty and end the "corporate subsidies" large companies can obtain current SNAP rules. Those legislative proposals include raising the federal minimum wage to $15 per hour, closing corporate tax loopholes and getting the PRO Act signed into law to make it easier for workers to join unions.

$15 Minimum Wage

McGovern supported boosting SNAP benefits by 15 percent during the pandemic in last year's CARES Act. But that only raised SNAP benefits from an average $1.40 per meal to about $2 per meal.

A real boost for workers can only come through a boost in the federal minimum wage from the current $7.25 per hour to $15 per hour, he said.

"I’m fighting to increase SNAP benefits because food should be a fundamental human right, but we ought to put pressure on these companies to stop paying crappy wages to their workers," McGovern said. "This is the single most important way to end poverty in this country."

Jill, a Worcester-area resident who spoke to Patch about working while getting SNAP, earns $18 per hour as a teaching assistant in a Blackstone Valley school system. But she qualified for SNAP because her hours were cut over the summer due to pandemic shutdowns, blunting the impact of her relatively higher wage. Jill also worries, however, that a $15 minimum wage could drive up the cost of goods, effectively making her poorer.

Anna Stansbury, an economics researcher at Harvard University, said there is some debate about what affect a $15 minimum wage would have on job cuts or employers cutting work hours.

"There is a debate among economists over the degree to which, when wages are higher, companies can be expected to cut total employment," she said.

Stansbury said some research suggests a minimum wage boost to $15 per hour could cut government SNAP expenditures by $1 billion or more per year. Economists like UMass Amherst's Arindrajit Dube suggest fears about job cuts are overblown.

With Democrats in control of both the House and Senate, President Joe Biden had an opportunity to boost the minimum wage, but didn't take it. The $15 minimum wage was originally included in the latest $1.9 trillion COVID-19 stimulus plan, but every Republican and eight Democrats voted to remove it.

But McGovern said the fight is only beginning. Large corporations and other public officials who don’t support raising the minimum wage must be pressured to do so, he said.

"The dignity of work ought to mean you get paid a livable wage in a way that doesn't require taxpayers to subsidize work through programs like SNAP," McGovern said.

Closing Corporate Tax Loopholes

McGovern said Congress needs to close tax loopholes for large corporations, noting that many corporations pay little or no taxes toward the SNAP program but benefit from it as a subsidy for their payroll.

"Many of these companies don't pay taxes, and yet they pay their workers unlivable wages, and the taxpayers subsidize through programs like SNAP, and it’s just wrong," McGovern said.

According to the New York Times, the U.S. tax code has encouraged many large companies to shift some business activities to offshore accounts, creating havens that prevent profits from being taxed. The report said other large companies have saved billions in taxes by giving options to executives to buy future stock at a discount. Those companies are then legally allowed to deduct the options as a loss in profits.

Famously, Amazon reportedly paid $0 in federal taxes on $11 billion in profits in 2018. The company has since publicized that it does in fact pay taxes, but has said the U.S. tax code helps them save as a way of boosting the larger economy.

"Like most governments that try to encourage economic investment by companies, the U.S. Congress has written a tax code that incentivizes the type of job creation, capital investment, development of technology, and employee ownership that Amazon does because these are critical drivers of a prosperous economy," the company said in a 2019 press release.

Make Joining a Union Easier

McGovern said the House recently passed a bill called the PRO Act which aims to make it easier for people to join a union. The bill would allow unions to override laws in right-to-work states to collect union dues, make it illegal for businesses to interfere with union elections and other activities, and establish fines for companies that violate workers' rights.

Some companies with the most Massachusetts employees enrolled in SNAP were unionized, including Stop & Shop. About 792 of the company's 22,000 workers received a food benefit in the year ending in October 2019.

In the case of Jill, the Blackstone Valley teacher's aide, she saw her biggest ever raise in 15 years when her union negotiated its most recent contract. But that also means Jill has to wait until the next contract negotiation to see another substantial boost.

Union representation is also very low for workers at private companies, Harvard's Stansbury said. It was only about 6 percent in 2019, she said.

"Workplaces that are 'union-free' are often union-free not because they are such good places to work ... but because of the reality that organizing a union and winning a union election is extremely difficult, especially in the context of often very well organized and resourced employer opposition," she said.

McGovern said he doesn't think large companies are negotiating fairly with the unions if they still have employees enrolled in federal food assistance.

"Some of these companies do not negotiate in good faith," McGovern said. "We had four years of Donald Trump and a National Labor Board that you couldn’t rely on. Hopefully that will change with a new administration."

Next: The third part of this series will explore how as Amazon has expanded in Massachusetts, so too has the number of employees who qualify for SNAP benefits.