Tag Archives: Nevada SNAP

The SNAP-ping Turtles Attack: Food Stamp Fraud Myths and Legends

Food Stamps

Among the most depressing of the many Republican attacks on people who are the least able to defend themselves are the ones snapping away at the SNAP program, aka Food Stamps.  It’s even more depressing that the attacks are based on myths and urban legends.

The attacks are continuous.  As of April 16, 2016 approximately 41,000 lost access to food assistance as a result of the Walker Administration’s work rules, although his department of Health Services admits it doesn’t track people who find work on their own. [WEAU]  Another 1,000 will lose access to food assistance in West Virginia. [Dpost]  Add yet another 5,000 in Georgia who’ve lost access because of work rule changes. [USAPP] Louisiana hacked off the access for 30,000 in late 2015. [AJA] And, then, of course, there’s the viral display of the lady who took it upon herself to embarrass a fellow human being for using assistance to feed his children.

The tantrum, if true, illustrates the extent to which the myths and urban legends about the food assistance programs have become part of the Republican narrative about food stamps and the people who use them.

One of the more persistent myths is that there is an abundance of food stamp fraud, and the fraud is the result of misuse of the assistance by the recipients.  

First, the food assistance program is actually one of the most efficient and honest programs in government.  And, most of the fraud is on the part of retailers, NOT the customers.

“SNAP fraud has actually been cut by three-quarters over the past 15 years, and the program’s error rate is at an all-time low of less than 3 percent. The introduction of EBT (Electronic Benefit Transfer) cards has dramatically reduced consumer fraud. According to the USDA, the small amount of fraud that continues is usually on the part of retailers, not consumers.” [HC.org]

Even during the last Recession, SNAP problems were miniscule: “SNAP has one of the most rigorous quality control systems of any public benefit program, and despite the recent growth in caseloads, the share of total SNAP payments that represent overpayments, underpayments, or payments to ineligible households reached a record low in fiscal year 2011.” [CPBB]

The USDA, which administers the program has taken notice of the allegations of “waste, fraud, and abuse,” continually leveled at the assistance, and presented a report in 2013:

“The report indicates that the vast majority of trafficking – the illegal sale of SNAP benefits for cash or other ineligible items – occurs in smaller-sized retailers that typically stock fewer healthy foods. Over the last five fiscal years, the number of retailers authorized to participate in SNAP has grown by over 40 percent; small- and medium-sized retailers account for the vast majority of that growth. The rate of trafficking in larger grocery stores and supermarkets—where 82 percent of all benefits were redeemed—remained low at less than 0.5 percent.”  (emphasis added)

More specifically, most of the fraudulent use can be attributed to these small retailers:

“While the overall trafficking rate has remained relatively steady at approximately one cent on the dollar, the report attributes the change in the rate to 1.3 percent primarily to the growth in small- and medium-sized retailers authorized to accept SNAP that may not provide sufficient healthful offerings to recipients. These retailers accounted for 85 percent of all trafficking redemptions. This finding echoes a Government Accountability Office (GAO) report that suggested minimal stocking requirements in SNAP may contribute to corrupt retailers entering the program.” [emphasis added]

However, the lady in the supermarket screaming at the customer, is probably thinking  it’s the food assistance recipient who commits most of the fraud and not the retailer.  She’s likely not concerned that the USDA has initiated rules to sanction 529 retailers, and permanently disqualifying 826 outlets for trafficking in benefits, or falsifying their applications.  Or, that in 2012 the USDA reviewed more than 15,000 stores and permanently disqualified nearly 1,400 for various program violations. She’s also not likely concerned that the USDA has expanded the definitions of fraud to include newer schemes. [USDA]

snapping turtle

Let’s conjecture that the screaming-mimi is associating food assistance with lazy do-nothings who are eating from her hard earned sacred tax dollars. Again, she’s wrong.

Using Nevada (pdf) as an example for the moment, the median income of SNAP recipients in the state was $20,479 per year, or about $1700 per month, and 49% of the households had at least one person working in the previous 12 months; 29% had two or more workers, and only 21.8% had no one working in the previous year.  Why might the person not be working? Try acknowledging that more than 1/2 of SNAP beneficiaries nationally are either children or the elderly. [StoH]  And, no – they are not undocumented individuals: “Undocumented immigrants are not (and never have been) eligible for SNAP benefits. Documented immigrants can only receive SNAP benefits if they have resided within the United States for at least five years (with some exceptions for refugees, children, and individuals receiving asylum).” [StoH]

On a national basis, children account for 44% of food assistance, the elderly and the disabled account for another 20%.  That leaves 36% who are non-elderly, and not disabled, of whom 22% have children to support and feed, and 14% are childless.  [CBPP]

SNAP recipients Those interested in the SNAP statistics for every Congressional District in the nation can find the pdf files here.

Those interested in living in the fact based universe will also find that far from munching on the taxpayer’s dime, every $1 dollar in food assistance generates $1.80 in economic returns to the community. [USDA]

snapping turtle However, we can publicize every FAQ, every article, every report, in the land and there will still be screamers at the Wal-Mart who are convinced that low-life no-gooders mooching on the dole are taking their earnings and wallowing in sin and sloth.  The right wing echo chamber has done a good job of vilifying children, the elderly, the disabled, and the down on their luck to find an excuse to cut spending for at risk citizens. 

snapping turtle

The snapping turtles have also done a good job of associating African Americans with food assistance programs.

“The 2013 data shows, white people are nearly three times less likely than African-Americans to live in poverty; yet, white people claim more food stamps.  According to the data, not only do white people benefit from food stamps, they also benefit from not having politicians and cops target and malign them as lazy, unproductive welfare queens who take advantage of a social safety net. As the chart indicates, racist ideas about welfare have come to overshadow statistical facts that reveal that the face of food stamps is in fact white.” [AnHQ]

There is support for this conclusion  in Nevada statistics.  In Congressional District One 58% of food stamp recipients are white, in Congressional District Two 80.3% are white, in Congressional District Three 66.3% are white, and in Congressional District Four 52.9% are white.  According to the Census Bureau Nevada District 1 has a population of 693,623 of whom 380,587 are white; District 2 has 697,426 residents of whom 580,111 are white; District 3 has a population of 734,973 of whom 499,767 are white; and District 4 has a population of 713,077 of whom 470,799 are white. As much as the popular right wing mythology may want to reinforce the narrative of the Welfare Queen it just doesn’t fit with the statistical reality.

snapping turtle  When statistics don’t fit … try ideological mythology. Food Stamps make you dependent on Government, and dependency is evil incarnate because it is a disincentive to work.  This, flat out, makes no sense at all.  For example, I live in an area with a public water system. Does hooking up to the water system mean that I’m lazy and have no incentive to walk to the spring for the daily bucket? Or, that I should have to dig my own well, and install my own septic tank?  Perhaps this is plausible if I live far enough from my neighbors to put in a septic system, but I don’t so the result would be “my septic tank next to your well.”  Not a pleasant nor hygienic prospect.  Do public roads make me a lazy dependent? Does having a police department make me less independent – should I have to hire my own rent-a-cop?  Maybe in some radical libertarian  landscape no one depends on anyone else, but this is only a fairy tale of dystopian proportions.  Not a land in which any rational soul would want to reside.

snapping turtle

There’s another element not often discussed in polite circles – good old fashioned selfishness.  The trick is to make selfishness acceptable. Perhaps some of the snapping turtles harbor an unhealthy notion that someone out there somewhere is taking money out of their shells, someone who is undeserving of assistance.  I’d be willing to bet that a right wing snapping turtle would never agree that food assistance should be denied to an octogenarian, or to a disabled person, or to a small child, or to a young mother trying to keep food on the table while going to school to complete her education. So, the “undeserving” must be meanly labeled.  They’re Lazy, they’re druggies, they’re people who “have too many children.”  (I’m particularly appalled at the argument which goes: “They” have too many children,” while the next contention is that funding for family planning must be eliminated.)  The line “I saw people at the food bank who are driving better cars than mine,” illustrates the issue.

This example is a visceral reaction – not a questioning skepticism.  Is the vehicle the only asset of any significant value in the entire household?  Does “better” mean newer? If so, then what was traded in to buy it? The comment better illustrates a definition of poverty that would have only the totally destitute ‘deserving’ of assistance, not someone with a functioning vehicle, an air-conditioner, a television set, a refrigerator – as if these consumer items weren’t a necessity in modern American life. Define poverty harshly enough and all manner of selfishness can be justified.

snapping turtle

There’s one myth justifying selfishness we can dismiss. The one that says we should drug test SNAP recipients to see if they’re worthy.  Seven states spent more than one million dollars on drug testing welfare recipients only to discover that there wasn’t a reason to do it in the first place.  Missouri spent $336,297 testing 38,970 recipients to find 48 positive tests. (0.123%) Oklahoma spent $385,872 on tests for 3,342 people and got 297 positives. (11%) Utah’s results were less rational, 9,552 people were tested and 29 were positive. (3.03%) Kansas screened 2,783 persons, with 11 positive results, a 3.95% result costing $40,000. Mississippi tested 3,656 persons and got 2 positive drug tests. Tennessee tested 16,017 people and got 37 positives.  Arizona tested 142,424 persons and got a grand total of 3 positive results. [TP]  Not that it will put much of a chink in the armor of the snapping turtles, but the numbers certainly don’t justify the expense or the rationale for selfishness underlying the testing.

snapping turtle forbidden

I’d like to see the day when (1) Congressman Sludgepump launches his canards about SNAP recipients being lazy moochers, and a reporter asks if he knows the demographics of the recipients in his District, or  when (2) State legislator Gloomcryer decries the possibility of drug use by food stamp beneficiaries and he’s challenged to cite statistics to support his contentions, or when (3) we finally become outraged at the outrageous duplicity and mendacity of the Snapping Turtles. 

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Nevada Jobs and Corporate Welfare Part 2

NV low income jobs fam 4The list in the chart above shows jobs in Nevada which are projected to have 5,000 or more persons employed as of 2020, and the average wages assuming full time employment at 40 hours per week for 50 weeks per year.   All information comes from Nevada’s DETR.

One other assumption is that the family of four includes a head of household wage earner, and three dependents.  The optimists among us may assume that if there are two wage earners the family will avoid being eligible for SNAP (pdf) and other benefits.  However, this rosy view doesn’t take into consideration the possibility of a single parent family.  Nor, does it assume the “pro-family” ideal of the male head of household being able to support his family on the proceeds of a single job.   In short, of the common jobs available — or projected to be available by 2020, ten of the categories show average wages which are insufficient to keep an average family of two adults and two children above the income level at which they would be eligible for SNAP benefits.

One glance at the chart should demonstrate why there is conversation about increasing the minimum wage to $15.00.  Notice that those occupations in which individuals can earn $15.00 or more per hour don’t fall into the generalized category as eligible for SNAP (food stamp) benefits.

Obviously, there are two ways to cut the SNAP benefit rolls.  The first is simply to slash the funding, raise the requirements, and tell potential and current beneficiaries to wing it as best they can.  Ideologues may cheer the removal of government support which in turn should induce the “Lazy and Shiftless” to take on more work and seek “economic freedom” from “government intrusion.”   However, as evident in the chart, a single income from a low wage job is insufficient to put food on the table for an average family at present.  Two low income jobs (fast food work, stocking shelves, etc.) may serve to maintain minimal living standards — are the Ideologues recommending three or more jobs?  At this point we’re perilously close to Janis Joplin’s rendition of the lyrics “Freedom’s just another word for nothing left to lose.”

The second option is to raise the minimum wage to $15.00.   There’s an economic benefit to this: “Economists generally recognize that low-wage workers are more likely than any other income group to spend any extra earnings immediately on previously unaffordable basic needs or services.” [EPI]

The economics of this are simple — as lower income families spend more for goods and services previously unattainable the DEMAND for those goods and service increases. The greater the aggregate demand, the more hiring to satisfy that demand — remembering the First Rule of Human Resources: The only reason to hire additional personnel is because  staffing is inadequate to satisfy current demand with an acceptable level of customer service.

Even the Chicago Federal Reserve offers modest applause for this thinking: “We are skeptical that minimum wage hikes boost GDP in the long run,” Aaronson and French wrote. “Nevertheless, we do find evidence that putting money into the hands of consumers, especially low-wage consumers, leads to predictable increases in spending in the short run.”  In fact, an increase in the minimum wage to $9.00 was projected to add an overall 0.3% increase in the GDP. [MMA]  In short, we can see some economic growth by raising the minimum wage, or we can continue to offer public assistance to the employees of highly profitable corporations so that their “shareholder value” (bottom lines) are at record levels.

“New research shows more than half of low-wage workers at fast-food restaurants rely on public assistance to survive – a rate double that of the overall workforce. According to researchers at the University of California, Berkeley, low wages in the fast-food industry cost American taxpayers nearly $7 billion every year – that’s more than the entire annual budget of the Centers for Disease Control and Prevention. A companion report by the National Employment Law Project found McDonald’s alone costs Americans $1.2 billion annually by paying its workers insufficient wages. Last year the top 10 largest fast-food companies alone made more than $7.4 billion in profits.”  [DN]

Then there are the landscapers, the stock clerks, the dishwashers, the customer service clerks, the security guards, and the retail sales clerks.  A 2009 ASPE study tells us a bit more about these people.   As of 2001, approximately 58.9% were female, only 17.3% of all low wage workers were under 20 years old, and 64% were White.  Only 14.4% were divorced or separated, 39.1% were married, 46.5% had never married. {Exh.2}

The bottom line concerns the bottom line.  If free market capitalism is the way we are supposed to be conducting business, then public assistance subsidies would be unnecessary IF the private sector paid wages which enabled the generation of sufficient aggregate demand to grow the economy.

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It Can Happen Here: Corporate Welfare and Nevada Jobs

NV Food Service Jobs WagesThe eligibility level for SNAP benefits for a family of four is estimated at 130% of the federal poverty level ($23,550).

“A household is defined as a person or a group of people living together, but not necessarily related, who purchase and prepare food together. Households, except those with elderly or disabled members, must have gross incomes below 130 percent of the poverty line. All households must have net incomes below 100 percent of poverty to be eligible. Most households may have up to $2,000 in countable resources (e.g., checking/savings account, cash, stocks/bonds). Households with at least one member who is age 60 or older or a member living with a disability may have up to $3,250 in resources.” [SNAP]

The median wage reports from NV-DETR should be interpreted to mean that half the employees in this job category fall below the annual income in the second column.

And the point of all this?

The point is quite simply, we don’t get to have it both ways.  We can’t continue to employ people at wages which make them eligible for public assistance and then expect not to have to pay for the public assistance to help (as in the case of SNAP) to put food on the table for their families.   The second point is that this isn’t a situation that occurs in some highly generalized national way — it’s right here in the Silver State.  Worse still, it’s happening in the most prominent sector of the Nevada economy — hospitality and food service.

And so, we get stories reporting a McDonald’s employee being advised to seek public assistance by her employee resource hotline. [BusinessInsider] A study finds that over one half of Wal-Mart’s employees make less than $25,000 per year. [BusinessWeek] It’s already been reported that one Wal-Mart in Wisconsin could cost taxpayers some $900,000 including such “subsidies” as Medicaid, home heating assistance, reduced price school lunches, and Section 8 housing assistance. [HuffPo]  These and other stories led one columnist to call Wal-Mart the new “Welfare King.” [Salon]

Why Do The Welfare Kings Worry?

Inflation.  There is nothing a lender (banker) likes less than inflation. Even the prospect of inflation causes the vapors.   Thus, the banker’s political allies offer such bromides as the following:

“Where would the money come from to pay minimum wage workers a higher rate of pay? It would come from the customers of those businesses. When the cost of doing business rises, those businesses have to raise the prices of their products. This happens across industries and across the economy. The end result is inflation. Workers are making more money, but that money is only buying what their former wage purchased.”

Sounds right, but … the issue at the present is that wages aren’t keeping up with current levels of inflation, much less drive any inflation.  [CSMonitor] Even if we calculate that the full cost of the wage increase is passed along to customers, the research doesn’t support the contention that a wage-price spiral will ensue from improving the minimum wage:

“Past research on how business costs rise with minimum wage hikes indicates that a 10-percent minimum wage hike can be expected to produce a cost increase for the average business of less than one-tenth of one percent of their sales revenue. This cost figure includes three components. First, mandated raises: the raises employers must give their workers to meet the new wage floor. Second, “ripple-effect” raises: the raises employers give some workers to put their pay rates a bit above the new minimum in order to preserve the same wage hierarchy before and after minimum wage hike. And third, the higher payroll taxes employers must pay on their now-larger wage bill. If the average businesses wanted to completely cover the cost increase from a 10-percent minimum wage hike through higher prices, they would need to raise their prices by less than 0.1 percent.” [BTFE]

However, nothing seems to alleviate the never-ending terror of the financial sector (banks) that something will cause the dollars they lent to customers will be repaid in dollars of slightly less value (inflation).

…even if this costs us more to sustain the individuals and their families hired at current minimum wage levels. Out of Our pockets.  Not to put too fine a point to it, but American taxpayers — including Nevadans — are being asked to subsidize corporations which do not pay living wages to their employees, at the same time those corporations and banks are demanding that the federal government reduce its expenditures for social safety net programs.

If lower income workers are feeling like they are in a Grand Bind — it’s because they are.

*Annual median wages are not included because the levels of wages do not include earnings from tips.  The Nevada minimum wage for tipped employees is $8.25 per hour.

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What the Heck? SNAP go his arguments

Joe HeckWe can update statistics on the SNAP (food stamp) program in Nevada by referring to the Caseload Summary of the DWSS, (pdf).  For FY 2012 there were 187,896 adults and 163,969 children receiving SNAP benefits. Of these, 143,115 adults and 124,890 children lived in Clark County, and 24,834 adults and 21,672 children lived in Washoe County. (p.45)  In sum there were  351,865 receiving food assistance.

The average value of the benefits statewide per case in FY 2012 was $258.56, per month, and per person averaged to $122.70. [DWSSpdf]

And, yes there are more people participating in the SNAP program in Nevada, as indicated by the following chart:

NV SNAP participation per 1000

This trend is in line with the employment (unemployment) trends in Nevada since FY 2003.   Nevada’s highest unemployment rate was 14.0% in October 2010, and was lowest (3.8%) in April, 2000.  [BLS] Nevada’s current unemployment rate of 9.5% earns the Silver State the dubious honor of being 50th in the ranking of state unemployment rates as of August 2013. [BLS]

NV Unemployment 3There’s good and bad news herein.  As DETR explains:

“Service-providing industries are expected to create 100,500 jobs in the ten-year forecast horizon. A lot of the growth in the service-providing industries is a reflection of increasing population and consumption over a decade. Leisure and hospitality industry is projected to have 36,100 more jobs by 2020, the largest employment gain in jobs among all industries. Most of the gain is anticipated to be generated in the accommodation and food services sector.” (pdf)

The number of jobs is increasing — but, as we discover from the BLS tables of average hourly wages and weekly earnings — the average hourly wage in the leisure and hospitality sector is $13.54 per hour, with an average weekly wage of $352.04.  This is the lowest rate of all the sectors in the tables, the next lowest rate being $16.67 in “retail trade.”

Thus, we have a situation in which the unemployment rate which drives a significant portion of the SNAP applications is decreasing, but the kinds of jobs increasingly available are in the lowest wage categories.   With the highest unemployment rate in the nation, and jobs increasing predominantly in the lowest wage sector, Nevada will be hard pressed to find ways to reduce family poverty.

Representative Joe Heck (R-NV) explained his vote on the continuing resolution, with dramatic cuts to the SNAP program, in a statement which doesn’t square with the reality of employment projections in Nevada:

“Every able-bodied American that does not have dependents should be required to meet the work requirements … the reforms put in place by this bill ensure that only those that meet the income guidelines receive the assistance they need,” Heck said in a statement. “The best thing we can do to help those on SNAP and other forms of federal assistance is create an economic environment where the private sector can grow and create more good-paying jobs.”

Instead of pragmatic assistance to those employed in low wage jobs, Heck offers verbiage: “create an economic environment….”  Pure GOP speak for Business Subsidy Good; People Assistance Bad.  The advice is singularly unattached to the reality that the jobs actually being created tend NOT to be “good paying.”

What Representative Heck asserts, but does not substantiate, is that any of the 351,865 receiving food assistance in Nevada do NOT meet the income guidelines.   The issue to which Representative Heck may be applying his penchant for generalities is the BBCE guidelines.

In fiscal year 2010, GAO estimates that 2.6 percent (473,000) of households that received Supplemental Nutrition Assistance Program (SNAP) benefits would not have been eligible for the program without broad-based categorical eligibility (BBCE) because their incomes were over the federal SNAP eligibility limits.  [GAO]

However, what Representative Heck isn’t including is another segment of the GAO Report on SNAP:

GAO estimates that BBCE increased SNAP benefit costs, which are borne by the federal government, by less than 1 percent in fiscal year 2010. In that year, total SNAP benefits provided to households that, without BBCE, would not have been eligible for the program because their incomes were over the federal SNAP eligibility limits were an estimated $38 million monthly or about $460 million for the year. These households received an estimated average monthly SNAP benefit of $81 compared to $293 for other households. BBCE’s effect on SNAP administrative costs, which are shared by the federal and state governments, is unclear, in part because of other recent changes that affect this spending, such as state budget and staffing reductions in the recent recession.  (emphasis added)

In short, one can argue that the broad based categorical eligibility did increase the cost of SNAP — but it cannot be seriously asserted that these were the “budget busting” increases cited by those who object to funding the program.

However, there’s always that fall back position: Generalizing about “waste, fraud, and abuse.”  The USDA defines welfare fraud as (1) exchanging SNAP benefits for cash; (2) an application who is dishonest on his or her application; and (3) a retailer who has been disqualified for past abuse lies on an application to be restored to the program.

Further, the USDA has taken serious (and effective) steps to reduce SNAP abuse:  “Due to increased oversight and improvements to program management by USDA, the trafficking rate has fallen significantly over the last two decades, from about 4 cents on the dollar in 1993 to about 1 cent in 2006-08 (most recent data available).”

Those who oppose the SNAP program are more likely to cite stories of “dead people getting SNAP debit cards.”   For example, an audit in Nevada found cards issued to 27 deceased persons. [LVRJ]  This from a total of 351,865 recipients — see what your calculator returns when you divide 27 by 351,865.

Calculator

This news was followed by the following opinion statement:

About 2,400 people were in both databases, and 749 of the deceased were not shown as deceased in the Welfare Division database. Auditors then reviewed 50 of these cases and found that 27 cards had been used after the cardholder had died. Because the sampling number was so low, it is likely that far more than the 27 cards of dead people still are being used. [LVRJ]

It could be.  At the same time it could also be true that the small sample size tended to make the problem look as though we were viewing the heavens with binoculars.  Larger issues may be suggested but the details are extremely hard to determine.   Phrased more elegantly: “A study with low statistical power has a reduced chance of detecting a true effect, but it is less well appreciated that low power also reduces the likelihood that a statistically significant result reflects a true effect.” [NCBI]  The comparison of Vital Statistics databases with SNAP rolls is obviously a desirable thing; however the extrapolation that this “proves”  serious fraud is a step too far.

There is no substantiation for the allegation that the broad based categorical eligibility (BBCE) guidelines for SNAP added an unbearable burden to the federal coffers.  There is no evidence that SNAP is beset by waste, fraud, and abuse — indeed the level of abuse has been reduced in recent years from 4% to 1% (and note not all the fraud is on the part of the recipient).

“Over 99 percent of those receiving SNAP benefits are eligible and payment accuracy was 96.20 percent in 2011 –a historic high. Payment errors are less than half what they were 10 years ago, which has reduced improper payments by $3.67 billion in 2011.” [USDA]

And here comes the kicker — the reason that SNAP benefits were audited for comparison to Vital Statistics?  The federal government directed this:

USDA publishing a final rule in August 2012 that requires States to cross check against the Social Security Master Death File, Social Security’s Prisoner Verification System, and FNS’s Electronic Disqualified Recipient System, prior to certifying individuals for the program, to ensure that no ineligible people receive benefits.”

It really doesn’t quite do to cite an example of an audit to “demonstrate” fraud and abuse, when the intention of the agency conducting the audit was part of an on-going effort to reduce that self-same  fraud and abuse.

If Representative Heck can’t cite any rationale for his desire to “reform” SNAP other than to berate the BBCE — not a significant part of the poverty reduction problem — and to bemoan “abuse and fraud” also not a significant problem, then his objections are hollow ideology at the expense of those recipients who find themselves seeking employment in a land of low wage jobs.

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