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Income Inequity Intensified By Rising Food Prices

Rising Food Prices
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EDITOR NOTE: As of last May, global food prices have risen around 18%. You’ve probably noticed the rise in costs visiting your local grocery store. The bad news is that this trend shows no signs of slowing down. Let’s take a moment to think about what this 18% price increase means. If you’re among those in the middle class, you’re probably spending around 9% of your monthly income on food. But for those among the more financially-challenged crowd, they may be spending around 36% or more of their income on food; some face starvation. In the meantime, the stock market continues to rise as a result of the very policies driving up food costs. This is income inequality, plain and simple. And neither the government nor the Federal Reserve are doing anything to prevent this erosion in purchasing power. In fact, the Fed is looking to drive prices even higher in pursuit of its elusive 2% inflation rate. There’s only one way to protect your money against inflation: gold and silver. Don’t let the government and the Fed increase asset values for the wealthy at the expense of the food you need to buy to feed your family.

Based on recent information from the United Nations, since May, global food prices have risen 18%, which is a six-year high and expected to keep climbing. Already stretched food budgets will feel increased pressures.

In 2019, US households’ poorest spent 36% of their income on food, compared to 9% by the wealthiest, which is in line with other developed countries such as Canada and Australia. On the surface, it looks like the poor spend more on food because they consider nutrition more important. The truth comes down to analyzing the percentages of income.

Based on the lowest spending when measured by every country’s percentage, the reported global 18% rise equates to 8% of the average American minimum wage. This 8% has a far more significant impact on a minimum wage salary than it does a middle-class salary. Here lies the issue of equity.

Equity matters. With the impact of an 18% increase in food costs, the most impoverished experience a rise from 36% of their income towards food to 42.5%. The 18% impact on the wealthiest will increase by 9% to 10.6%. As these increases occur, the disadvantaged will look to cut their food budgets. Some will eat out fewer times or not eat out at all in exchange for making food at home. Some will not eat. As these inequities persist, the inability to buy quality food will affect growth and productivity outcomes related to education and health. Humans need quality, nutritionally rich food to grow and function well.

As the COVID pandemic forces more Americans out of work, catastrophic weather, strikes by farmers, and countries cutting back on food exports cause food shortages and climbing food prices; more people will turn to cheaper, less nutrient-dense food. The middle class will meet the intersection of poverty. The overall effect on America will create a downturn in economics, education, and health.

We can prevent and rectify adverse outcomes by applying better responses, including effective economic and social strategies that address food system disparities.

Originally posted on Sun Journal

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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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