Why Don’t We Spend More On Food?

People from other countries often seem shocked by the comparatively low food spending in the US, as a percentage of income. The USDA notes that low-income people spend around 30% of their income on food, compared to about 6% by people in the upper classes, and many people seem to think food spending is alarmingly low when looking at how people spend their dollars, and where.

There’s more going on here than meets the eye, though, and it’s worth picking apart to explain how people in the US spend their food dollars, and why rising food prices are such a problem. Those high expenses as a percent of income for lower class people, for example, are not the result of buying organic produce; they’re because food is so expensive that it eats up a substantial portion of the budget. Many people are also trapped into inefficient spending patterns as a result of their low income. The econopack problem, as I once put it, plays a huge role in how lower class people buy.

It’s cheaper, generally, to buy foods and supplies in bulk or large packaging, but that’s only in the long term. While the per-unit cost is lower, actually making the initial purchase can be highly expensive, too much for a family to afford. Consequently, many people are pushed into buying high-cost, low-return foods because they can’t afford those of better value. If it sounds like a ridiculous paradox, you can thank the agricultural industry in the United States for the bizarre system of subsidies that controls how food is distributed, where it winds up, and how much it costs at any given time.

Families in upper income brackets are indeed spending a rather low percent of their income on food, and it’s because, for them, food is probably comparatively cheap; the USDA numbers are using incomes of $157,631 for the upper quintile, and it’s important to remember that, again, this is terribly skewed by the top 1% of income earners, and especially the top .01%. They’re making so much money that even when they’re eating very costly foods at luxury restaurants, they’re still spending a relatively small fraction of their income on it.

That’s not because they’re cheap with food, but because there’s such gross income inequality in the United States that some people are forced to spend 30% of their income buying food, while others spend only 5.8% and it’s a drop in the bucket for them; they have to actively work to spend that much, and fortunately for them, there are plenty of high-cost restaurants and other food establishments more than happy to provide them with spending opportunities.

With rising food prices, though, these numbers are ominous. Both upper and middle class households managed to cut food expenditures during the recession, even with inflation. For lower class households, this was not the case, because they were again locked into specific buying patterns that often excluded savings. At the same time food prices rose, people lost their jobs, and some lost cars and other means for getting around to find savings. When they needed to reduce their expenditures most, they lacked the means to do so.

And prices are climbing, particularly as a tussle occurs between using commodities like corn for fuel, agriculture, or food products for immediate use. The rise of alternative fuels, while seemingly good on the surface, has created a problem for farmers trapped between warring needs and trying to get the best price for their products. They can’t afford to plant crops that don’t sell as well, and that means dedicating space to the production of fuels or feedlot corn, rather than other crops for people to eat. And that, in turn, means that grocery store prices go up, which pushes expenses on food even higher for low-income households bearing the brunt of these costs.

The US is a bit of a paradox; we both spend too much and too little on food, depending on which segment of society you look at, and how the spending is allocated. Programs like SNAP and WIC are designed to make foods available to our very poorest residents, but they don’t provide complete coverage, and for some families, eligibility guidelines make it impossible to qualify even if they need that kind of support to thrive. Between high food costs and high costs for housing, many families are left with little at the end of the month, which can put them in a very vulnerable position. Any expense may require borrowing, and a cascade effect can develop and grow as people get deeper in debt with no realistic means of repayment.

People asking why residents of the US aren’t spending more on food are asking the wrong question, because the situation is more complicated than that. While the perception may be that we have a glut of cheap, poor-quality food, the reality involves interacting structures that do not divide themselves as neatly as people might want. The question isn’t how much we’re spending on food, but where we’re spending it, who spends the money, and how the food system could be improved to increase the numbers of people who have safe, reliable access to food sources in the US.

As it stands now, food insecurity continues to be a pressing issue, and it’s not going to resolve itself. Questions from foodies and people in the middle class about food spending are directed at the wrong area of concern, and based on their own experiences, which are far from universal.