Lower income families pay higher price for inflation
Editor’s Note: This is the sixth installment in a series that examines food insecurity and its causes.
Food insecurity impacts lower income households, because when money is limited, households are forced to make difficult decisions on how income is spent. This also includes many elderly who are forced to choose between food and prescription medicines.
For those qualifying households, there is the Supplemental Nutrition Assistance Program (SNAP).
Defined by the U.S. Department of Agriculture (USDA), SNAP provides food benefits to low-income families to supplement their grocery budget so they can afford the nutritious food essential to health and well-being. SNAP benefits are updated each year, based on the cost of what the USDA refers to as the Thrifty Food Plan (TFP).
The TFP is a USDA estimate of how much it costs to provide nutritious, low-cost meals for a household. Households eligible for SNAP receive the maximum benefit for their household size minus 30% of their net income.
In August 2022, the Center on Budget and Policy Priorities published a report stating that on Oct. 1, 2022, SNAP benefits would automatically rise to reflect changes in the cost of living, “helping households with low incomes cover their food needs and countering recent high food inflation.”
The maximum SNAP benefit levels are equal to the cost of the TFP from the preceding June scaled to household size., the report says.
The report goes on to state that the increase in SNAP benefits resulting from (the previous) year’s TFP revision will help households better afford a healthy diet and reduce their risk of food insecurity and poverty.
“The October (2022) adjustment to SNAP benefits will also mitigate rising food hardship and help households regain some of the purchasing power that they’ve lost due to rapidly rising food prices” the article states in its conclusion.
But, as USA Facts pointed out in its Sept. 29, 2022, article, benefits for fiscal year 2022 were calculated in June 2021, when overall consumer prices were 5.3% higher than 2020. They do not reflect the 3.3 percentage point increase in prices from June 2021 to May 2022.
A May 2022USA Facts report says that in that in that month consumer prices were about 8.6% higher than the previous year. Food and beverage prices increased by a larger amount, 9.7%, for the same time period. This was the highest monthly increase in food and beverage prices since March 1981.
The report says SNAP attempts to address malnutrition in the U.S. by providing extra funding to low income households with the purpose of encouraging healthier diets.
“However, as food prices increase,” the report states, “SNAP benefits lose their purchasing power. If the benefits don’t go as far, it can lead families to make concessions regarding their diets.”
Two years later, on May 20, the Urban Institute released the results of its study on the effects of SNAP and the Thrifty Food Plan. The study concurred with the May, 2022 USA Facts report. The Urban Institute study found that the maximum SNAP benefit doesn’t always cover the cost of a modestly priced (TFP) meal, and many families receiving SNAP benefits are still facing food insecurity as a result.
The study found that nationwide, a modestly priced meal cost $3.37 in 2023, 19% more than the SNAP benefit. The gap was wider in the Western Upper Peninsula. In Baraga, Houghton, Keweenaw, and Ontonagon Counties, a modestly price meal cost $3.40, which is 20% more than the SNAP benefit. While the average TFP meal costs $3.40, the SNAP benefit per meal calculates at $2.83. In Marquette County, the price is $3.57, 26% more than the SNAP benefit. The statistics show a wider gap in Gogebic County, where SNAP covers $2.83 of a meal priced at $3.64, a gap of 29%.
The Urban Institute says the maximum SNAP benefit is the same for all counties in the 48 contiguous states and Washington, DC.
“The maximum SNAP benefit did not cover the cost of a modestly priced meal in 99 percent of US counties,” the report states. “The benefit covered meal costs in only 36 of the 3,144 counties.”