Hunger in America: A Crisis of Food Inflation and Shrinking Safety Nets

By Sophie Young, Research Associate, Oakland Institute



Hunger and food insecurity is on the increase in the U.S. as families face ultimatums: to pay for food or rent, food or medicine. In 2006, 42 percent of households chose between food and utilities, 35 percent between food and housing, and 32 percent between food and health care. (1)

This situation has been made worse with the U.S. facing the worst food inflation in 17 years. (2) According to the U.S. Department of Agriculture, in February 2008 alone, the cost of eggs jumped 25 percent, milk 13 percent, and chicken nearly 7 percent. The federal Consumer Price Index (CPI) for the cost of food rose 5.1 percent from February 2007 to February 2008, and is expected to hit 6.5 percent for all of 2008. (3) The price of Thrifty Food Plan, the mix of food that poor families depend on, has increased in price even faster--by 6.5 percent. (4)

The most impacted by price increase are the poor. Families are running out of food by the end of the month, parents are skipping meals so children can have enough to eat, and families are doing without minimally adequate, balanced and healthy diets.

Who is Hungry in the United States?

Close to one in eight Americans struggled with food insecurity even before the downturn in economy. (5) USDA surveys show that food insecurity remains most prevalent in low-income households that are single-parent families, Hispanic and black, in metropolitan or rural areas, and particularly in the Southern and Western states. (6) Families below the poverty line--earning less than $20,000 a year--who already spend over 20 percent of their income on food, (7) are most impacted by the food crisis. Unable to afford increasing prices at the stores, they are standing in swelling lines at food pantries marked by shortages.

The hunger survey conducted by the Conference of Mayors shows that four main populations sought food assistance in 2007. (8)

Households with Children

Children make up 12 million of the 35.5 million Americans living with hunger or food insecurity. (9) Of the clients of America's Second Harvest emergency food providers, 36.4 percent are children aged 0-17. (10) According to a recent report from the USDA, hunger among children worsened in 2007, increasing by more than 50 percent: 691,000 children suffered from hunger sometime in 2007, up significantly from 430,000 in 2006. (11)

Elderly Persons

10 percent of people served by America's Second Harvest emergency food providers are seniors aged 65 and over. (12) Seniors--who live on fixed incomes, lack access to supermarkets and rely on whatever food is donated--often depend on processed foods, which add to their vulnerability. (13)



Individuals

Requests for food assistance by individuals increased in 57 percent of the cities surveyed in the U.S. Conference of Mayors 2007 Hunger and Homelessness Study. (14)

Employed Persons: A New Class of Hunger?

In addition to the 35.5 million plus Americans already living with food insecurity, "an unprecedented influx of nontraditional patrons" (15) is now seeking emergency food aid. These include employed Americans whose wages cannot keep apace with inflation and who are finding ways to cope with surging fixed costs--particularly food, transportation, and mortgages.

It would nevertheless be inaccurate to call the employed an entirely new class of hunger. Thirty-six percent of households served by America's Second Harvest Network in 2006 had one or more family members employed. (16) In low-income households with children--41 percent of which are food insecure-- (17) 91 percent have at least one parent working part- or full-time, and 56 percent have at least one parent working full-time year-round. (18)

Why is there Hunger in America?

A constellation of economic factors is squeezing American families' budgets: high food, fuel, and commodity prices; the financial crisis; declining employment; and low wages for the employed.

Existing hunger worsened with accelerating food prices in 2007 and 2008. Inflationary oil and commodity prices, the financial crisis, and growing unemployment are all factors that are compounding the food crisis in U.S. (19) Although gas prices have dropped recently, the unemployment rate hit a 14-year high in October 2008: 6.5 percent or 10.1 million people. (20) The Federal Reserve expects unemployment to rise even further next year, to 7.1 to 7.6 percent in 2009. (21) And as banks are tightening credit, wages "effectively [shrank]" for most workers. (22) Any marginal wage increase was absorbed by increased food and fuel costs, and moreover any wage rate increase fell short of the inflation rate. (23)

Short-term inflation, however, is symptomatic of the persistent structural causes of hunger in the United States. Key structural causes include a precarious food aid system dependent on corporate donors, diminishing federal safeguards, volatile markets, and an absence of jobs that pay a livable wage.

Food Banks & Existing Safety Nets Tenuous

Food banks, already struggling to assist the traditionally hungry, are now struggling to keep step with increasing need for food assistance. During the first half of 2008, nationwide requests for help from food banks increased by 20 to 25 percent. (25) And food requests have risen up to 40 percent in areas with the weakest economies. In Alameda County in Northern California alone, hotline calls are up 30-40 percent. (26) Food banks found it especially difficult to meet demand during the 2008 summer months when kids were home and no longer received free or reduced school lunches. (27)



The lines are getting longer at an inopportune moment. Supply for emergency food assistance has dwindled in recent years, due to decreased federal support and corporate donations. Even though the prevalence of food insecurity has remained at 11.3 percent since 1996, (28) surplus food donations have declined from $242 to $58.5 million--a net loss of $184 million--in the four years between 2003 and 2007. (29) As federal support declines, food distribution centers are closing or seeing dwindling food boxes. The San Francisco Food Bank was ordered by the state to cut 440 from its rolls in September 2008, which forced El Bethel and Woolf senior centers to discontinue distributing food boxes to the 440 seniors on fixed incomes. (30)

Inadequate Federal Nutrition Programs

Despite the fact that the nation's Food Stamp Program currently benefits nearly 28 million people--the working poor, unemployed, children, as well as seniors and disabled persons--it remains inadequate both in its reach and benefits.



Several other federal nutrition programs that cater to the needs of the most vulnerable in society have faced cuts over the years. For instance, federal support for Commodity Supplemental Food Program (CSFP), which provides food boxes to low-income seniors, women and young children in 32 states, the District of Columbia and two Indian tribal areas, was cut back sharply in 2006. (31) Senior households which account for 88 percent of CSFP caseloads were disproportionately affected by the program cuts. (32)

Successful programs, however, do exist, and need additional support. One is the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which is widely recognized for effectively "reducing the incidence of low-weight births, reducing child anemia, and improving nutrition and health outcomes." (33) WIC is receiving additional support to meet increasing demand and for the first time in 30 years, WIC vouchers will allow beneficiaries to directly purchase fruits, vegetables, and whole grain foods. (34) WIC vouchers also have a built-in adjustment for food prices; they are not indexed for inflation, but can be redeemed from a participating retailer whatever cost charged.

Insecure Structure of Federal Emergency Food Aid

The recent food crisis is the newest strain on existing safeguards against hunger. Emergency food assistance programs have been struggling to keep up with growing hunger, and were already strained in recent years from frozen federal funding, dwindling surplus donations, and increased participation.



At the Joint Economic Committee hearing of the U.S. Congress (May 2008), George Braley of America´s Second Harvest, the country's largest food bank network, reported that 1.3 million people below the poverty line joined the Food Stamp program in 2007 alone. (35) This is in some ways good news. Those who need assistance are accessing it, in part because food banks successfully simplified the "bureaucratic obstacles [that] discourage participation." (36) According to Allison Pratt, Director of Policy and Services at the Alameda County Community Food Bank (ACCFB), the food bank collaborated with a broad coalition of advocates that skimmed the California food stamp application from 13 to 3 pages. (37)

Yet, federal food programs´ supply has only dwindled since the 2002 Farm Bill froze mandatory funding for the Federal Emergency Food Assistance Program (TEFAP) at $140 million.(38) At the same time food donations, which like food aid are countercyclical to food prices, (39) have declined. (40) Corporate donations to food banks have also dropped off as their surplus now goes to so-called tertiary markets--cheap box stores such as Grocery Outlet, Pac ´n Save, the 99 cent store--or to overseas markets, sold at a discount. (41)

As Federal TEFAP assistance and shelf stable donations decline, food banks have been picking up more food via purchase while inflation is weakening their purchasing power. Although this grants food banks more discretion and autonomy to buy healthier and locally-grown foods, it is difficult to fund.

Failure to Adjust for Inflation and Financial Crisis

For a family of four with one parent working a minimum wage job for 40 hours a week, every week of the year, their earnings are still insufficient to meet basic needs. (42) This is under normal conditions, which have changed with recent volatile prices across the board: food, fuel, retail, mortgages. The recent financial crisis and sweep of foreclosures have literally wiped out many individuals' and families' savings and equity.

Despite the measurable impact of inflation on Americans' budgets, existing safeguards in the U.S. economy fail to adjust for inflation, placing the burden on the American consumer. Families below the poverty line spend one-third of their income on food. With food inflation during the first quarter of 2008 almost matching the rate for all of 2007, poor American families do not have time to adjust. Even as the economy faces a recession and potential deflation, (43) the USDA still expects food prices to rise in 2008 and 2009, as much as 9.5 percent for fruit and vegetables in 2008. (44)



Food stamps, for instance, are not fully indexed for inflation. Neither is the minimum wage. The California Budget Project estimates that the purchasing power of the minimum wage declined 88 cents between 2002 and 2006. (45) Food stamp benefits also erode vis-à-vis inflation, as benefits are assessed only once a year in October based on "lagged data" of the cost of the Thrifty Food Plan in June. By the end of the fiscal year, benefits are based on data "15 months out of date." (46) Food stamp benefits cannot keep apace with the rapid inflation of food prices; the USDA estimates the food cost increase reached 11.8 percent for the period between June 2007 and September 2008. (47)

The Way Forward

In the short-term, there is an urgent need to alleviate the immediate crisis in federally funded food programs. In the long term, structural change is needed to reform the precarious food system, emergency food assistance programs, wages, and employment in the United States.

It is important to support the good work of food banks and service providers in simplifying the application process, indexing food stamps for inflation, and reassessing the source and nutrition value of food supply.

• Support nutrition programs and wages that are adjusted for inflation and based on the economy rather than fixed numbers.

• Boost food stamp payments. Food stamps are the quickest and most effective form of economic stimulus because the benefits are spent so quickly and completely by needy people.

• Improve response by WIC, school meals, summer food, TEFAP, Meals on Wheels and other nutrition spending to escalating food prices.

• Improve public supports like refundable tax credits, Unemployment Insurance, and TANF.

• Encourage USDA rather than corporate donations, or systems that support purchases of locally-grown produce, to ensure healthy and sovereign food systems.

While food programs are important, it is essential to understand the larger structural level of hunger in the United States.

Living Wage Builds Family Incomes-- Recall that a household with two parents working full-time at minimum wage still struggles to provide basic needs. Dealing effectively with poverty and hunger will mean raising wages and benefits at work. This will require ensuring that a minimum wage is also a livable wage.

Social Safety Nets-- Under constant scrutiny and reform, social safety nets are critical safeguards against poverty. In addition to integrating services and improving access to benefits, programs should also take care to address recent trends: increasing poverty among children, seniors, and female-headed families. (48) Feasible proposals include raising income eligibility for Supplemental Security Income for seniors (49) and investing in nutritional education. And importantly, effective social nets require sustaining focus on people are often excluded from the safety net system, the "hard to serve" in welfare terms. They include the chronically homeless, at-risk youth, immigrants, and poor non-custodial fathers. (50)

Food Systems & the Farm Bill-- Dealing effectively with hunger will also mean continuing to build self-sufficient food systems that ensure food security, and importantly, access. Creating local food markets stimulates local economies and facilitates buyers' access to producers.

It is essential to understand the role the Farm Bill plays in the nation's food and agricultural system. The $289 billion Farm Bill (H.R. 2419: The Food, Conservation and Energy Act of 2008)--while it includes new funding for food stamps and nutrition; local food system programs that rebuild and increase access to healthy food in underserved communities; and sustainable agriculture, including support for organic, beginning, and minority farmers--largely continues commodity programs. An additional $6 billion a year in commodity spending will benefit agribusiness and corporate farms, more than $5 billion a year will be directed to commodity growers in direct payments, and $200 million a year will fund biofuel programs that divert resources from food to fuel production.

Measuring Poverty-- We need to reassess the official measures of poverty. Under the current definition of poverty, households continue to experience economic hardship in income levels at 150 percent or higher than the poverty rate. (51) Based on a 1960s definition, present measures of poverty take into account food as one-third of household expenditures. But rising costs across the board challenge its competency, as increasing numbers of families make tradeoffs between basic needs.

As it becomes far harder for these and other struggling households to purchase healthy foods, the nation must sustain focus on reassessing and rebuilding social programs. Inflation in essentials--food, fuel, mortgage, and healthcare--is straining already weak wages and social nets. Food banks and food assistance programs, meanwhile, are facing the double crisis of longer lines and dwindling federal and donor support.

A long-term policy shift is critical to genuinely address hunger and poverty. National and local coalitions mobilizing around these issues--a living wage, food stamp reform, produce-centered food policy, and access to social nets among others--are indeed influencing state and federal policy. Federal and state supports for food banks are already shifting toward vegetables and fruits, and "away from surplus agricultural commodities like nonfat dry milk, butter, peanut butter and lard." (52) Hunger and poverty coalitions are also pouring energy into the upcoming 2009 Reauthorization of Child Nutrition Programs. (53) Enacting a long-term shift in safety nets' focus and implementation will require not only sustained mobilization, but also federal and state commitment to policies that enable structural change and include the chronically excluded, poor, and hungry.




Notes

(1) America's Second Harvest - The Nation's Food Bank Network. The Almanac of Hunger and Poverty in America 2007. Chicago, IL: 2007.

(2) Simon, E. "Fast-Rising Food Prices Squeeze Poor." Oakland Tribune. 15 April 2008.

(3) Weill, J. "The Impact of Rising Food Prices on Hunger in America." Presentation at the House Hunger Caucus Briefing. Food Research and Action Center, CA. 16 April 2008.

See also "Sharp Rise in Processed Fruit & Vegetable Prices." USDA Food Price Outlook 2008-2009. Food Institute. 2008. http://www.foodinstitute.com/outlook.cfm. Retrieved 2008-11-11.

(4) Ibid.

(5) Sniffen, MJ. "50 Percent More US Kids Hungry in 2007." Associated Press. 17 November 2008.

(6) US Department of Agriculture - Economic Research Service. "Food Security in the United States: Conditions and Trends." Updated 14 November 2007. http://www.ers.usda.gov/briefing/foodsecurity/trends.htm. Retrieved 2008-07-10.

(7) Statement of Joseph Glauber, Chief Economist of USDA. Hearing before the U.S. Congress Joint Economic Committee, Washington D.C. 1 May 2008.

(8) The United States Conference of Mayors. A Status Report on Hunger and Homelessness in America's Cities: A 23-City Survey. Washington D.C.: December 2007. P. 6.

(9) Feeding America. "National Anti-Hunger Organizations Release New 2008 Blueprint to End Hunger on World Food Day." Washington D.C., 16 October 2008. http://feedingamerica.org/newsroom/press-release-archive/blueprint-2008..... Retrieved 2008-11-11.

(10) Cohen, R., Kim, M. and J. Ohls. Hunger in America 2006. Mathematica Policy Research. 2006.

(11) Ibid.

(12) Cohen, R., Kim, M. and J. Ohls. Hunger in America 2006. Mathematica Policy Research. 2006.

(13) Ibid.

(14) The United States Conference of Mayors. A Status Report on Hunger and Homelessness in America's Cities: A 23-City Survey. Washington D.C.: December 2007. P. 6.

(15) Garber, K. "The Food Cost Crisis Hits the U.S." U.S. News & World Report. 1 May 2008. http://www.usnews.com/articles/news/national/2008/05/01/the-food-cost-cr.... Retrieved 2008-06-02.

(16) America's Second Harvest. "Hunger and The Working Poor." Factsheet. 2006. http://www.secondharvest.org/learn_about_hunger/fact_sheet/working_poor..... Retrieved 2008-11-11.

(17) America's Second Harvest. "Statistics on Low-Income Families." Factsheet. 2006. http://www.secondharvest.org/learn_about_hunger/fact_sheet/lowincome_fam.... Retrieved 2008-11-11.

(18) Douglas-Hall, A. and M. Chau. "Most Low-Income Parents Are Employed." National Center for Children in Poverty. Columbia University, NY: November 2007. http://www.nccp.org/publications/pub_784.html.

(19) Grynbaum, M. "Oil and Food Prices Add to Inflation Pressures." New York Times. 14 June 2008.

(20) Goodman, P.S. "Jobless Rate at 14-Year High After October Losses." New York Times. 8 November 2008.

(21) "New Jobless Claims Reach a 16-Year High, U.S. Says." Associated Press, New York Times. 20 November 2008.

(22) Goodman, P.S. "Jobless Rate at 14-Year High After October Losses." New York Times. 8 November 2008.

(23) Ibid.

(24) Jessica Bartholow, Director of Programs, California Association of Food Banks, Oakland, CA. Interview, 2 June 2008.

(25) Garber, K. "The Food Cost Crisis Hits the U.S." U.S. News & World Report. 1 May 2008. http://www.usnews.com/articles/news/national/2008/05/01/the-food-cost-cr.... Retrieved 2008-06-02.

(26) Allison Pratt, Director of Policy and Services, Alameda County Community Food Bank, CA. Interview, 11 June 2008.

(27) Jessica Bartholow, Director of Programs, California Association of Food Banks, Oakland, CA. Interview, 2 June 2008.

(28) Winne, M. "High Food Prices - Just Another Bad Day in the Foodline." Foodforethought. June 2008.

(29) Ibid, p. 2.

(30) Nevius, C.W. "Food Bank cuts hit S.F. senior center." San Francisco Gate. 23 September 2008.

(31) Feeding America. "Federal Nutrition Program Cuts Leaves Nearly 50,000 Seniors at Risk of Hunger." 23 January 2006. http://www.feedingamerica.org/news_room/2006_News_Releases/012306.html.

(32) Ibid.

(33) Neuberger, Z. and R. Greenstein. "President's Vetoes Could Causes Half A Million Low-Income Pregnant Women, Infants, and Children to be Denied Nutritional Benefits in One of Nation's Most Effective Programs." Center on Budget and Policy Priorities. Revised 10 December 2007. http://www.cbpp.org/11-27-07fa.htm. Retrieved 2008-07-11.

(34) Quan, D. "Federal WIC program writing voucher menu to add fruit, vegetables, more fish," The Press-Enterprise, 26 May 2008. Accessed 11 July 2008. http://www.pe.com/localnews/inland/stories/PE_News_Local_D_voucher27.354....

(35) Statement of George Braley, Senior Vice President of Government Relations and Public Policy, America's Second Harvest. Testimony for the U.S. Congress Joint Economic Committee, Washington D.C. 1 May 2008. P. 5. http://jec.senate.gov/index.cfm?FuseAction=Hearings.HearingsCalendar&Con....

(36) Alameda County Community Food Bank. Hunger: The Faces & Facts. Oakland, CA: March 2006. P. 12.

(37) Allison Pratt, Director of Policy and Services, Alameda County Community Food Bank, CA. Interview, 11 June 2008.

(38) Statement of George Braley, Senior Vice President of Government Relations and Public Policy, America's Second Harvest. Testimony for the U.S. Congress Joint Economic Committee, Washington D.C. 1 May 2008. P. 1.

(39) Diouf, Dr. J. "Soaring Food Prices and Action Needed," 11 January 2008. See also Mousseau, F. with A. Mittal. Sahel: A Prisoner of Starvation? A Case Study of the 2005 Food Crisis in Niger. The Oakland Institute. 2006.

(40) Ibid, P. 2.

(41) Jessica Bartholow, Director of Programs, California Association of Food Banks, Oakland, CA. Interview, 2 June 2008.

(42) Alameda County Community Food Bank. Hunger: The Faces & Facts. Oakland, CA: March 2006.

(43) Goodman, P. "Fear of Deflation Lurks as Global Demand Drops." New York Times. 31 October 2008.

(44) "Sharp Rise in Processed Fruit & Vegetable Prices," USDA Food Price Outlook 2008-2009. Food Institute, Elmwood Park, NJ: 2008. http://www.foodinstitute.com/outlook.cfm.

(45) Alameda County Community Food Bank. Hunger: The Faces & Facts. Oakland, CA: March 2006. P. 10.

(46) Rosenbaum, D. "Food Stamp Benefits Falling Further Behind Rising Food Prices." Center on Budget and Policy Priorities. 22 July 2008. Updated 28 October 2008. http://www.cbpp.org/7-22-08fa.pdf.

(47) Ibid.

(48) Ibid.

(49) See also Mittal, A. and C. Ahn. Going Gray in the Golden State: The Reality of Poverty Among Seniors in Oakland, California. Oakland Institute. 2008.

(50) Nightingale, D., Burt, M. and P. Holcomb. Social Safety Nets in the United States--Briefing Book. Prepared for World Bank. The Urban Institute. November 2003. P. 20.

(51) Ibid, P. 8.

(52) Johnston, D.C. "Shrinking Economy Strains Food Banks." New York Times. 10 November 2008.

(53) Betsy Edwards, Education and Advocacy Coordinator, Alameda County Community Food Bank, CA. Interview, September 2008.