The Wal-Mart at Midnight Indicator, Ctd.

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Monday, October 04, 2010 at 11:30 am

A few weeks ago, The Wall Street Journal picked up on an extraordinary illustration of the far-reaching impact of the recession and the growth of poverty in America. A Wal-Mart executive noted a surge of customers paying for basics — milk, bread and baby formula — at midnight on the first of the month. Just before midnight, on the 30th or 31st, families would appear in the stores’ parking lots to start shopping. Why? State governments generally direct-deposit monthly Women, Infants and Children (WIC, or welfare) and Supplemental Nutrition Assistance Program (SNAP, or food stamps) benefits into debit card accounts then. The paper fleshes it out into a full story today:

Many customers in the Houston Wal-Mart during the wee hours Friday were young mothers whose WIC money had just kicked in on their Texas Lone Star benefits cards.

“The real troubling part to us is why [they are] out shopping at that hour,” Dave Dillon, chief executive of Kroger, said in an interview, adding that the supermarket giant adjusted its shelf-stocking patterns after witnessing the same phenomenon as Wal-Mart. “We clearly see an increase,” he said.

Wal-Mart declined to disclose details, but it has also responded to the early-morning spike on the first of the month. It increases staffing and ensures that its shelves are stocked with the necessities customers are seeking, a spokesman said, though he stressed that the number of shoppers involved at midnight is relatively minor compared with peak periods such as weekends.

“We know our customers are living paycheck to paycheck as they continue to struggle as a result of the economy,” said Wal-Mart spokesman Lorenzo Lopez.

The phenomenon underscores the extraordinary hardship the recession has imposed. But it also does speak to WIC and SNAP’s efficiency as government programs. They are nothing but voucher systems. The government gives families the equivalent of cash, and lets them spend it in local stores as they see best fit. The arrangement benefits the businesses — Wal-Mart and Kroger’s clearly feel for the young moms stocking up, but profit from the transactions. And it benefits the families too. They get what they need, as soon as they need it, as efficiently as possible.

That was a point Joel Berg of the New York City Coalition Against Hunger made to me last week, discussing passed and pending cuts to SNAP.

We come at this from a moral position, a nutritional position, and an economic recovery position. This cut is so insane from an economic position as well — we know food stamps are the most effect form of stimulus. The jury is still out on parts of the stimulus — but the jury isn’t out on food stamps. It was a 1,000 percent, beyond home run grand slam success, if you’ll excuse me mixing metaphors.

The money went to people who needed it, rapidly, and without a lot of bureaucracy. Actually, SNAP used to have something like a 15 percent administrative overhead drag. Since the stimulus bill increased benefits and boosted the number of people getting them, administrative costs are down to 7 percent. For all the conservative ranting — vouchers, vouchers, vouchers — food stamps are a voucher program! You’re not being sent to a government-run food center. You’re getting a voucher to use in the private market. It is good for businesses too.

The child nutrition bill that might have cut SNAP again, though, has stalled in the House.

Follow Annie Lowrey on Twitter


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