There is a general aura of epistemic uncertainty around COVID-19. Said uncertainty only escalated by the various and ever-evolving restraints that have been put in place around the country as governments continue to learn more about the virus. For various reasons, the United States has been hit particularly badly. At the time of writing this, the U.S. made up nearly 25% of the confirmed cases globally and entered one of its worst economic recessions since the Great Depression. While the general story continues to encourage us to defeat this disease together, the minutia help us gain an understanding of the systemic inefficiencies and disparities that we may not have anticipated nor attempted to resolve were it not for this pandemic.
Recently, Marcus Rashford, Manchester United’s star forward, successfully pushed the British government into a renewed funding program that would provide nearly 1.3 million children with free lunches. This is on top of nearly 20 million pounds raised for vulnerable individuals during the pandemic. This story got us thinking about the growing concern of food insecurity in the US. Supply chain disruption, unemployment, and food price inflation around the pandemic, as well as government responses, will likely contribute to exacerbating food insecurity –the state of being without reliable access to affordable, nutritious food. Contributions such as the one put in place by the footballer in Manchester will prove even more vital as we continue to fight through these challenging times. Let us consider the effect on individual’s employment, income, and food security based on the data, and how this might grow in the coming months.
Coronavirus has changed our thought processes regarding how we interact with each other, respond to incentives, and make decisions. Previously, the subtle risks that we subjected ourselves to each day weren’t so pertinent. Now, these risks are heightened and supplemented by larger risks. In a time when we are all encouraged to learn and work at a “healthy” distance from our peers and limit one of our most natural human characteristics–socialization, we have seen a shocking amount of disparity in the outcomes.
Most apparent are the striking differences in this pandemic’s effect by demographics. For example, in April, 61% of Hispanic households and 44% of black households said they had a member of their household lose their job, compared to 38% of white households. These numbers are up from 49%, 36%, and 29% respectively in March. Even more concerning is the rate of confirmed cases. Hospitalization rates are four times higher for people of color than for non-hispanic white populations according to the CDC.
The combination of shocks to employment, health, supply chains, as well as other factors put low-income individuals at a greater risk. Specifically, we have seen an increase in food prices and in-turn to higher susceptibility to hunger and food insecurity. While many of us are asking: How long until I can safely leave my home or how long will the line be at the grocery store? A more important question for many low-income individuals is: How can I put food on the table for myself and my family?
Let’s first consider the general disruption of supply chains. China is the largest exporter in the world and Chinese exports throughout the world have rapidly declined since the beginning of 2020. The sharpest declines are found in areas outside North America where imports from China fell nearly 20%. While the ongoing trade war between the United States and China has undoubtedly affected the supply of goods to North America dating back to early 2019, North America still saw a 10% decrease in exports from China in February 2020.
Figure 1: Chinese Exports to the rest of the world from February 2018 to February 2020
Likely due to the shock to the supply chain in combination with increased short-term wages, the price of the typical market basket for Food and Beverages measured by the Consumer Price Index has also increased. During the entire calendar year from March 2019 to March 2020 inflation in this sector grew only 1.8%. In one month, from March 2020 to April 2020, the inflation rate grew by 1.4%. This sudden and dramatic increase can be weathered for the short term, but will need to be monitored closely as we head into the 2nd half of the year.
Figure 2: CPI for Food and Beverages from March 2019 to May 2020
Now, let’s look at the dramatic shock in unemployment. Many small businesses have been forced to shutdown due to a lack of steady revenue. Large companies have temporarily or permanently laid off hundreds of thousands of employees. As Figure 3 visualizes, the unemployment rate from March of this year (4.4%) to April (14.7%) was unprecedented. While unemployment lowered in May to 13.3%, these numbers are dramatically above the 3.6-3.8% range that was seen in March-May of 2019.
Figure 3: United States Headline Unemployment Rate from March 2019 – May 2020
This data is bleak and can depict an unnerving future situation. Unemployment rate has rapidly grown and if the government subsidies are removed at the end of July as planned, the decreased income for certain individuals will lead to difficult decisions on the margins about how to maintain adequate food consumption.
Economic Fallout will Worsen Food Security
In 2018, 11.1% percent of households were considered food insecure, and 1 in 7 households with children were food insecure. However, today we are facing a new issue. 2018 was a period of economic growth where we had a strong economy, a tightening labor market with an unemployment rate between 3.7-4.1%, and near Federal Reserve target inflation rate of 2%. Yet, COVID-19 has pushed us into the impending recession. Historical data reveals large and lasting increases in food insecurity during a recession. In 2007, 11% of households were food insecure with an unemployment rate ranging from 4.4%-5.0%. In 2008, food insecurity rose to 14.6% and unemployment to 7.3%. By 2011, nearly three years after the recession began, food insecurity peaked at 14.9% when unemployment was at 9%. Projecting this recession’s impact on food security is difficult, but Feeding America projects food insecurity numbers in the US ranging from 8.6% to 34.2% due to the pandemic.
Data can Help Improve Outcomes
To understand the depth of the crisis, food availability data is increasingly important. A combination of food supply, agricultural productivity, and unemployment data could serve as guidance to those tackling the rise in food insecurity. Agricultural productivity levels can provide us with projections. Access to this data can help industries understand what, who and where to supply while minimizing the effect of a supply shock on those at the highest risk.
The answer to this issue is difficult to pinpoint directly as there are plenty of economic and social factors that limit an individual’s ability to access food. However, in the United States, federal organizations such as the National School Lunch Program (NSLP) which are currently focused on providing flexibility in qualification requirements during this tense period. Feeding America, the largest organization working to end hunger in the US, has collaborated to create a COVID-19 Response Fund focused on securing resources for food banks around the country.
This information can be eye-opening and daunting to act on. While the programs and solutions listed above can provide help, a true solution to the problem requires work on the individual, organizational, and federal level. If you’d like to help, here are a list of resources to learn more:
- Feeding America
- Feeding America’s Response Fund
- The United States Department of Agriculture
- Disabled World
Economic Data– Fred.stlouis.fed.org
USDA Food Insecurity Information –https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/food-security-and-nutrition-assistance/#:~:text=The%20prevalence%20of%20food%20insecurity,had%20very%20low%20food%20security.
Image source: Feedingamericaaction.org