Food Security Concerns Are Indicative of a Looming Crisis in US Economy

The primary needs of any nation is to provide food, water, sanitation, clothing and a dwelling. Whilst there are many examples across the third world of under developed nations which require urgent attention it may surprise many that the United States of America should come under scrutiny with regards to its own food security.

As illustrated below, the number of people in receipt of food stamps, via the  Supplemental Nutrition Assistance Program (SNAP), continues to fall. As of March 2016, there were 44.3 million, the lowest level since February 2011. This reflects a 2.8% drop in the number of recipients from the 45.6 million people receiving SNAP benefits in March 2015. At first glance one could believe this is due to an improvement in the US economy but as ever first glances can be deceptive.  It is clear that changes to the eligibility criteria to receive SNAP benefits, which started in 2014, even when still unemployed, is responsible for the reduction in these figures.

 

 

Many states relaxed the criteria for receiving food stamps in 2009 and the number of participants sharply increased. As official unemployment rates began to decrease states began to tighten up their eligibility criteria correspondingly. The issue of unemployment is a can of worms in itself as it is clear the real rate is in the 20% range and not below 5% as the official figures suggest.

To qualify for SNAP a household must meet three main criteria, although individual states can make adjustments to these criteria,

• Its gross monthly income generally must be at or below 130 percent of the poverty line, or $2,177 (about $26,100 a year) for a three-person family in fiscal year 2016.  Households with an elderly or disabled member need not meet this limit.

• Its net monthly income, or income after deductions are applied for items such as high housing costs and child care, must be less than or equal to the poverty line (about $20,100 a year or $1,675 a month for a three-person family in fiscal year 2016).

• Its assets must fall below certain limits:  in fiscal year 2016 the limits are $2,250 for households without an elderly or disabled member and $3,250 for those with an elderly or disabled member.

It should be noted that some people are not eligible for SNAP no matter how small their income or assets may be, such as strikers, most college students, and certain legal immigrants, with undocumented immigrants also ineligible. Whilst the issue of eligibility is certainly the cause for the fall in SNAP participation rather than economic improvement, we also need to factor into our thinking the issue of what is described as “food hungry” people.

The U.S. Department of Agriculture (USDA) defines food security as “access by all people at all times to enough food for an active, healthy life.” In 2006, the year before the housing market crash began, the USDA estimated that less than 10.9% of American households were food insecure. By 2009, that figure had increased to 14.7%. In 2014, the most recent year on record, 14% of all American households are not food secure which equates to 17.4 million homes across the United States,  equating to over 48 million people. By the time the USDA reports its 2016 figures in September 2017, controversial further SNAP eligibility restrictions are likely to see those figures increase. Listed below are statistics, which should not only shock but also sadden, given the US is regarded as being a first world nation.

• 1 in 6 people in America face hunger.
• Food insecurity exists in every county in America. In 2013, 17.5 million households were food insecure with increasing numbers of people relying on food banks and pantries.
• 49 million Americans struggle to put food on the table.
• In the US, hunger isn’t caused by a lack of food, but rather the continued prevalence of poverty.
• More than 1 in 5 children is at risk of hunger.
• Over 20 million children receive free or reduced-price lunch each school day. Less than half of them get breakfast, and only 10% have access to summer meal sites.
• 1 in 7 people are enrolled in Supplemental Nutrition Assistance Program (SNAP). Nearly half of them are children.
• 40% of food is thrown out in the US every year, or about $165 billion worth. All of this uneaten food could feed 25 million Americans.
• Statistically the states with highest food insecurity rates, compared to the US national average of 14.6%, are Arkansas (21.2%), Mississippi (21.1%), Texas (18.0%), Tennessee (17.4%) and North Carolina (17.3%).

When we factor in the labour force participation rate, as illustrated below, we can see hunger remains an acute problem because millions of Americans are still struggling financially since the 2008 crash.

 

 

Wage growth has been completely asymmetric to the real economy in keeping with many Western nations. An analysis from the Economic Policy Institute found that “between 2000 and 2015”, wages for the bottom 60 percent of male workers were “flat or declined” and that wage gains, unsurprisingly, have been largely concentrated amongst the highest earners.

What is clear, no matter how many changes are made to eligibility criteria, the US is in the midst of another economic crisis, which will eclipse that seen in 2008. The fact there are tens of millions of Americans either food hungry or in receipt of food stamps, coupled with a declining labour force participation rate, is a clear illustration of a nation in terminal decline.