Wednesday, February 07, 2024

Truest statement of the week II

Americans have had to weather much in the years since the COVID-19 pandemic first began, including price inflation of basic necessities. Grocery bills, especially, are a drain on household finances. But, as recent reports show, inflation is easing across many industries, and yet food prices overall have remained stubbornly high. Not only is that an indication of a deep rot at the heart of the food industry, agribusinesses, and corporate grocery chains, but it is also a clear sign that we need to repair our entire food system.

Reporting on a new Census Bureau survey, USA Today’s Sara Chernikoff found that “[t]he average American household spends more than $1,000 per month on groceries.” And, while it’s not surprising that those residing in expensive states like California have high grocery bills, there’s little relief for those living in states with lower costs of living. An average California family’s weekly grocery bill is $297.72, but an average North Carolina family’s bill is $266.23—nearly as high.

Attempting to downplay this reality, Paul Donovan, chief economist of UBS Global Wealth Management, wrote in an op-ed in the New York Times that Americans might be overestimating how serious inflation is, feeling the pinch most especially when they buy something as small as a candy bar. “[C]onsumers perceive inflation as higher than it actually is,” wrote Donovan. Further, he claimed, “[h]umans are genetically programmed to emphasize bad news over good news when they make decisions.” Donovan is implying that we’re just imagining high grocery bills.

In fact, inflation in the grocery industry has been higher than in other industries, rising 25 percent over the past four years compared to 19 percent overall, and many have pointed to simple greed as the reason: food prices are high because the companies setting prices think they can get away with padding their profits. Since we all have to eat, naturally this hits lower-income families harder, rather like a regressive tax. A new report by the Groundwork Collaborative found that in 2022, “consumers in the bottom quintile of the income spectrum spent 25 percent of their income on groceries, while those in the highest quintile spent under 3.5 percent.”


--  Sonali Kolhatkar, "The Real Reason Your Grocery Bill Is Still So High" (COUNTERPUNCH).



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