Since the beginning of the Great Recession in 2009, and the lack of any true recovery in both jobs and GDP over the last four years, a new type of economy has sprung up in many small and medium sized towns. This economy is based on the calendar day when large numbers of people receive their benefit checks, and is creating a new supply and shipping business model, where bulk food and grocer products are sent to locations on what is commonly known as Uncle Sam Day,
At precisely one second after midnight, on March 1, Woonsocket would experience its monthly financial windfall — nearly $2 million from the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. Federal money would be electronically transferred to the broke residents of a nearly bankrupt town, where it would flow first into grocery stores and then on to food companies, employees and banks, beginning the monthly cycle that has helped Woonsocket survive.
The “economy” (unemployment, shuttered factories, debt) is permanent, but the economic cycle is monthly, thanks to “Uncle Sam Day” - Washington Post
What is also significant about this new economic model, is the fact that it may be the only thing that keeps many small and medium sized towns and counties alive. On March 14, the Census Bureau issued new data for 2012 that showed one in three counties were dropping in population, with many dying off, or simply becoming areas for retirees to spend their final years. With no potential for jobs, businesses, income, or tax revenues, younger generations are flocking to more populated areas in the hopes of finding employment in difficult times.
As of the end of February, more than 47 million people now rely upon food stamps to supplement, or completely fulfill their grocery needs. With little or no alternative income sources, buying food and other necessities allowed under the SNAP program is often done immediately after new benefits are downloaded to EBT cards, and retailers are now recognizing it as the best way to get sales, knowing the rest of the month will be more limited.
As America has moved from being an agricultural economy, to an industrial giant, and finally a consumer oriented one, the next step appears to be an economy based in reliance on government welfare. Besides the individuals who are spending billions of dollars per year that they receive from Uncle Sam each month, businesses are now building their business models and supply chains around the new monetary phenomenon known as Uncle Sam Day.
You can also follow Ken Schortgen Jr on Twitter, and listen to the weekly economic roundup segment of the Angel Clark radio show from 6-7 p.m. EST on Friday evenings.
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