You hear anecdotally that food pantries are short of food or that the recession has caused an increase in the number of guests they serve. Now comes data from the USDA confirming that hunger in America is at the highest level since they began keeping records, with growth in the number of the “food insecure” in America having grown at an alarming rate from 2007 to 2008. The UK’s Guardian reports:
- “It may be the world’s richest nation, but the US is no stranger to startling poverty. A new report from the US Department of Agriculture says that food insecurity is the highest in America since the survey began.Food insecurity – defined by the USDA as when “food intake … was reduced and their eating patterns were disrupted at times during the year because the household lacked money and other resources for food” – afflicted 14.6% of Americans in 2008. Ie, some 50 million people were too poor to guarantee being able to put food on the table.
The report has been described by Barack Obama as “unsettling”. According to the Washington Post:
Last year, people in 4.8 million households used private food pantries, compared with 3.9 million in 2007, while people in about 625,000 households resorted to soup kitchens, nearly 90,000 more than the year before.
The food insecure include 21% of families with children, 25.7% of black families, 26.9% of hispanics and 17.7% of those living in the big cities. “
Leading the list, by state, are Mississippi (17.4%), Texas (16.3%), Arkansas (15.9%), Georgia (15.2%), and New Mexico (15.1%). At the bottom of the list are N. Dakota (6.9%), Massachusetts (8.3%), New Hampshire (8.5%), Virginia (8.6%), and Hawaii (9.1%).
For some, the current downturn is indeed a depression. Those at the lowest income levels were left behind during the last growth spurt and now they have no defense at all. At the same time their ranks are swelled by those in the middle income category who, having lived on some combination of the edge, credit, and/or above their means, have been brought down by the recession.
Another startling sign of the fragile state of middle America is a recent study conducted by TNS Group, a market research firm, in concert with Harvard Business School and Dartmouth College. As reported by NPR the findings were as follows:
- “The researchers conducted a survey to see how many households could round up $2,000 within 30 days to cope with an emergency, such as having a car breakdown or needing a major home repair. About half said that even if they turned to relatives for help, they could not come up with $2,000 for a “rainy day,” the study found.
Earlier in this decade, consumers had easier access to credit to help with emergencies. For example, rising home values made it relatively easy to get a home equity line of credit to tap in case of an unexpected expense. But with real estate values down sharply, home-equity lines have dried up for many. At the same time, credit-card interest rates have soared.
The tougher credit environment makes it even more important for households to have their own savings to handle emergencies, according to one of the researchers, Dartmouth economics professor Annamaria Lusardi. The personal savings rate has crept back up from zero to about 3 to 4 percent, but is still about half the norm of a generation ago.
Lusardi says most Americans continue to live with what she calls “financial fragility.” That is, families may be living a middle-class lifestyle, but are one job loss, or even one car breakdown, away from tumbling into real financial trouble.”
You can access the Guardian articles here and here. NPR’s discussion of Americans’ savings shortfall is here and you can listen to the four minute NPR story here.
