B. So, What’s “Affordable”?

(Author’s note: this essay is a combination of two previously published blog posts that should have been more closely connected. Happy Labor Day.)

“I’m sorry, but we can’t afford that.”

I imagine that most parents have said that to their children at one time or another, maybe when asked about a shiny new toy or a fun vacation. But how many have to say it when grocery shopping? 15 percent of them, according to the USDA. Over 17 million families in the United States had trouble coming up with enough money to buy groceries at some point in 2009. Yet at the same time, nearly 6 million families earned over $180,000, and in 2008, the IRS reported over 13,000 households filing tax returns with income in excess of $10 million. It seems safe to assume that none of them had trouble putting food on the table. Clearly, the definition of “affordable” is a movable target.

Speaking of which, I ran across this essay on ‘Grist’ a little while ago. It spoke, from a producer’s point of view, to an issue that is at the heart of this project: what does “affordable” mean; how is it decided; and who is included or excluded from obtaining affordable food?

Yes, the modern industrial food system has succeeded in delivering a broader, cheaper, and more widely dispersed array of goods to the consumer than at anytime in history. One might conclude that prices have been flattened as well, and that there’s relatively little price fluctuation across the country. However, my own experience belies that assumption. I found a significant difference in the overall cost of a typical selection of groceries between two low-price stores, never mind between a discounter and a full-price retailer. Is my experience typical, though? I’ll have to dig for data.

Of course there are other factors involved, besides the raw cost of groceries, in what families spend on feeding themselves: transportation to and from the grocery store; energy cost to store, prepare, and cook food; and time to do all these things. Since we know that time is money and energy costs money, it can arguably be broken down into dollars and cents; “the bottom line is the bottom line.” But how much difference is there in percentage of income spent on food between families at opposite ends of the economic spectrum, and how does this disparity play out in what these families buy and eat, and how they look at food itself?

The difference turns out to be rather large. According to the 2007 Consumer Expenditure Survey published by the U.S. Bureau of Labor Statistics, grocery expense as a percentage of income decreases quite sharply as income rises, from an average of 25 percent for the bottom quintile (20 percent bracket) to just under 4 percent for the top tier. Graphing this line, one sees a startling but familiar pattern: exponential decay. How low does it go? I don’t know. Someone making $1 million per year could spend $10,000 on groceries, and that would be 1% of their income.

The national average of 6 percent seems enticingly low, but it sits in a statistically curious position. More than 3 out of every 5 households make less income than the $62,857 for which that 6 percent grocery expense is average. The numbers are further skewed by the relatively small number of households at the very peak of the top quintile and the disproportionate amount of wealth they possess. The top 10 percent of U.S households brought in 49.7 percent of all income in 2007, according to research by Berkeley economist Emmanuel Saens.

Where do we fit into this picture? We have not been food-insecure for a number of years now, but I don’t think we’re so far from there that the idea is worth ignoring. It’s important to remember that while we seek access to better food, others seek access to food, period. We’ll get back to that idea; but first, as they say, the numbers: what percentage of our income do we spend on groceries? That depends on what one counts as income. Looking strictly at wages, tips, and stipends, we earned about $13,000 as reported on our 2010 tax return. That puts us squarely in the bottom 20 percent of income-earners, and our $6500 grocery expense for the year is  50% of that income.

Counting non-taxable income and benefits paints quite a different picture, though. We have last year’s tax refund of $8,961; one year’s college grant money for two people in excess of tuition, $10,395; and the food benefits for the year of $6,500. Adding those to the “earned” income brings our total for the year to $38,875, boosting us all the way up to the third quintile of income. Our food spending for the year is “only” 16.7% of that total.

Those numbers seem all out of proportion to the CES data, don’t they? How could we possibly be spending so much? Steak and eggs for breakfast? Or is there something else going on with those numbers?

The CES data is based on something with the dystopian moniker of “Consumer Unit.” While the number of Consumer Units per quintile is very close, varying by less than 1%, the average number of actual people in each of these Units varies somewhat more, from 1.7 in the first to 3.1 in the fifth. This puts my numbers and theirs on a rather uneven footing, requiring correction, like so:

Average expenditure by Unit/
Ave. number of people in Unit   =  expenditure per person.

Working with the data for the first and third quintiles, the two in which we would find ourselves, we wind up with annual per-person numbers like this:

Q1: $2,463/1.7 = $1,448.82
Q3: $3,355/2.5 = $1,342.00
Us: $6,500/5 = $1,300.00

So, the actual per-person expense is lower in the 3rd quintile than the first by $106, and we skate in at $42 below that. Interesting and reassuring. Is this a consistent pattern? Let’s have a look:

Q2: $2,999/2.3 = $1,303.93
Q4: $4,316/2.9 = $1,488.27
Q5; $5,629/3.1 = $1,815.80
And the United States average: $3,753/2.5 = $1,501.20. Again, the top quintile skews the average up.

Our results are even further askew, but in the other direction. Here’s a visual-both people per CU and food spending per capita together:

U.S. per-capita food spending compared with consumer unit size, 2009

We are the outliers, having both a higher number of persons in our “Consumer Unit” and a lower per-person food expenditure than any other group. Like I said, we’re doing pretty well for poor people.

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