Daily Management Review

A Return To Pandemic Levels Of Hunger Could Indicate Economic Instability


A Return To Pandemic Levels Of Hunger Could Indicate Economic Instability
A trip to the largest food bank warehouse in the country provides some unsettling hints as economists and investors scrutinize data on inflation, jobs, housing, banking, and other bellwether indicators to assess whether the United States is headed for a recession.
The demand for food assistance is as great as it was during the COVID-19 pandemic, according to the nonprofit's leaders, and as a result, more than half of the shelves at the Atlanta Community Food Bank are empty. This is partly due to supply-chain challenges, but primarily because of the tremendous demand. According to their estimates, this year in the Atlanta region, 2 in 5 people who requested food assistance had never done so before.
“Nobody anticipated this,” said Debra Shoaf, chief financial officer of the private charity, which relies on corporate and individual donations, as well as government grants, to distribute food to the hungry in 29 Georgia counties. Shoaf, who also serves on the finance steering committee for the national charity Feeding America, says she’s hearing similar reports across the United States. “We’re back up to pandemic levels,” she said.
Demand in some areas is higher than it was during the worst of the COVID outbreak. According to the local food bank in central Ohio, the number of homes requesting assistance has climbed by about 50% since last year.
According to figures from the Census Bureau, more than 11.4 million households received free groceries in early April, a 15% increase from a year prior.
“Food banks have been around for 50 years, but this is the first time we are seeing unprecedented high food demand combined with historically low unemployment rates,” said Vince Hall, chief government relations officer for Feeding America, which supports 60,000 food pantries.
In particular, temporary COVID-related boosts to the Supplemental Nutrition Assistance Programme (SNAP), formerly known as food stamps, a federal programme that provides debit cards to directly purchase food at retailers, have ended, which has led to the persistent demand.
Another important factor is inflation: The U.S. Bureau of Labour Statistics reports that since the pandemic started in March 2020, the cost of groceries has jumped by 23%.
According to John Lowrey, a business professor at Northeastern University whose research focuses on food bank management and public health, such post-COVID demand for free food is "not a good signal" for the economy and "may be an indicator of an impending recession."
“The fact that we have a lot of first time users who are no longer concerned about the stigma of going to a food pantry – and actually see value in it because they can no longer afford retail food – is a reasonable proxy for the health of the economy and consumers,” Lowrey said.
Food banks with surges exceeding COVID thresholds are outliers, according to Feeding America researcher and Baylor University economics professor Craig Gundersen. He claimed that the rise in demand this year is not unexpected given the extent to which the government helped during the pandemic outbreak. Additionally, he pointed out that SNAP payments are still higher now than they were four years ago despite being increased following a required review in 2021.
“We had the stimulus checks, for a long time people didn’t have to pay their rents and unemployment benefits were higher than wages,” said Gundersen.
According to Michael McKee, CEO of the Blue Ridge Area Food Bank in Virginia, which provides help to 25 counties along the Appalachian Trail, Covid emergency aid masks underlying economic issues. The Bureau of Labour Statistics' most recent data show that since March 2020, inflation has exceeded pay growth.
“What’s happening now reveals the scope, scale and pervasiveness of food insecurity in this country and the effects of inequality, not just more recently from inflation, but the inability of wages to keep up with the cost of living,” McKee said.
The dispute among politicians over whether to increase the nation's borrowing ceiling has complicated the issue of government food assistance.
Republicans in Congress have suggested restricting food assistance as part of a package of policies to counter what U.S. House Speaker Kevin McCarthy called President Joe Biden's "reckless spending."
The Republican plan has been criticised by President Biden, who claims it would hurt low-income Americans. Reuters was informed by anti-hunger advocates that policies that make it harder for people to get SNAP could put further pressure on food banks and other emergency food providers.
The SNAP government programme is by far the most popular way for Americans to feed the hungry.
Even though they deliver just approximately one-tenth as many meals, food banks and pantries are still the second-largest provider and are consequently an essential component of the social safety net.
Food banks from Georgia to Colorado to Virginia claim that as temporary COVID-era SNAP benefits have ended, demand for their services has increased.
In the first three months of this year, compared to last year, the Mid-Ohio Food Collective, which operates in 20 counties, recorded a nearly 45% increase in household pantry visits, from about 270,000 to about 390,000.
“We’re in uncharted territory,” said the charity’s spokesman Mike Hochron. “Household budgets are tight and more people than ever are turning to the emergency system to stave off hunger.”
Brian Greene, chief executive officer of the Houston Food Bank and a veteran in the sector since 1988, claimed that it is challenging to draw comparisons across time because demand has typically outpaced supply. He said that although the Houston Food Bank, the largest in the country in terms of volume, is giving less food this year than last, it is because donations of both money and food are down.
“If we had as much food as we had during the pandemic, we would distribute it,” he said.
Food banks in Virginia that the Blue Ridge food bank supplies reported recent increases as well. The Dulles South Food Pantry provided weekly services to 109 families in April 2021. It aided 147 people in April of last year. This month, 183 families per week are involved.
About 90 families each week were reportedly assisted by the Highland Food Pantry in Winchester, Virginia, during the pandemic. It is serving roughly 135 people this month. Haywood Newman, a 47-year-old handyman who says he's suffering now but managed to pass COVID on his own, is one of the new clients.
“You’ve got to pay your water, trash, electric, car and rent – those companies aren’t going to help you out,” Newman said.
The largest food bank warehouse in the country is located in Atlanta and spans four acres. According to Michelle Grear, supply director, it was built to hold around 5 million pounds of food, the majority of which is provided in pallets by grocery stores and food producers. According to her, the inventory average for last month was only 1.8 million pounds.
The food that is delivered is disappearing quickly off the shelves, often being taken by people on the street within a few hours. According to Grear, the warehouse received 9.8 million pounds in March and dispersed 9.6 million pounds, a narrow margin.
This month, Sharawn White, a 31-year-old single mother who works at a real estate firm and makes approximately $18 an hour, made her first trip to a pantry in the Atlanta region. After paying for nursery, rent and utilities, White claimed to have roughly $300 per month left over for groceries, gas and unforeseen costs.
When White went to a community centre in early April to give some old clothing, she saw a queue forming for the food pantry. It turned out to be a tremendous blessing, she said.
Like the majority of regional food banks, the one in Atlanta tries to avoid using cash to buy food on their own, except in times of emergency. Instead, they rely on corporate and manufacturer product contributions as well as government-funded programmes to get their food. According to the food bank's records, corporate and agricultural product donations in Atlanta continue to account for more than half of the food that is given. But the distribution of government spending has drastically changed.
According to the food bank's data, pre-pandemic government assistance accounted for around 27% of the supplies given by the Atlanta organisation. In fiscal 2021, at the height of the pandemic, the government contributed roughly 44%. Government funding will make up only 13% of total spending this year.
Kyle Waide, CEO of the Atlanta Food Bank Warehouse, announced that his organisation will use $18 million in cash reserves this fiscal year to make up the shortfall. Five years ago, the charity's food purchases made up about 5% of the food it gave away to the neighbourhood. It represents 25% of the year this is.“We can do this for a while,” Waide said. “But it’s not sustainable.”