Food Bank Demand Increases Even As The Economy ‘Booms’

U.S. Air Force/Public Domain

Real income has been vastly outpaced by investment income, leading stock market highs to mask a growing problem.

President Donald Trump and his supporters are often touting America's booming economy of late, with the president tweeting again Saturday that the stock market is at all-time highs and jobs are flowing back into the country.

Conservative commentator Lou Dobbs hit Twitter with similar sentiments over the weekend, celebrating low unemployment rates along with stock market increases.

But many Americans are not feeling the effects of this flourishing economy, and one sign pointing to their economic pain is the increase in demand among food banks across the country.

Via CNN Money:

While the economy is thriving in cities across the country, many middle class people in areas with a high cost of living are struggling to put food on the table.

Food banks in cities that have seen strong job growth and soaring home prices are seeing increased demand from locals struggling to make ends meet and relying on assistance to feed their families.

To put the situation into perspective, far more families are patronizing food banks in some large cities than were in need of assistance during the financial crisis a decade ago:

In 2008, when the economic crisis was heating up, the Ballard Food Bank in Seattle had almost 26,000 families visit. In 2016, that number jumped to nearly 40,000 -- a nearly 50% increase. Second Harvest is serving more people than ever, averaging more than 257,000 people every month from 2016-2017, up from 176,731 people per month from 2007-2008. That's 46% increase over 10 years.

Why such disparity between the appearance of the economy and the lived experience of so many Americans? One answer to this question is that for the vast majority of Americans, the stock market is a poor indicator of their wealth or income status.

According to TIME Money, 84 percent of stocks are owned by just 10 percent of the American population.

“Despite the fact that almost half of all households owned stock shares either directly or indirectly through mutual funds, trusts, or various pension accounts, the richest 10% of households controlled 84% of the total value of these stocks in 2016,” Wolff writes.

Furthermore, while virtually all (94%) of the very rich reported having significant stock holdings—as defined as $10,000 or more in shares—only 27% of the middle class did. (The study framed that middle class as the group between the poorest 20% and the richest 20% of Americans.)

Middle- and lower-income Americans simply do not have equal access to the wealth tracked by stock market gains and losses, and although it may look good on paper, the market is a poor representation of a great many Americans' economic experience.

For most Americans, income derives from labor and not investments, but wages have risen far more slowly than capital:

Since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2% per year. In other words, though the economy has been growing, the primary way most people benefit from that growth has almost completely stalled.

Cat Cvengros, vice president of development and marketing at Second Harvest of Santa Clara and San Mateo counties in California, sees the number of working people requiring assistance as clear evidence that the 'booming' economy has left plenty of people behind:

"There's this hunger paradox: You would think the wealth would rise all boats, but it hasn't and it's created a major crisis and we are seeing families live on their last legs."

Many of the people using food banks have jobs -- often more than one. At Second Harvest, the majority of the families with children have working parents.

Working wages increasingly are not enough to thrive in America today, and policy decisions will need to reflect this reality. Focusing too narrowly on the typical stats - stock market, unemployment rates (which can also be misleading) - will continue to paint a false reality in terms of how the majority of the country is faring economically.

As noted by Harvard Business Review:

It took many factors — some the result of deliberate policy choices, some the outcome of broad economic processes — to produce decades of wage stagnation for the typical worker. Similarly, it will take many incremental reforms and new policies to reestablish the conditions that support robust, broadly shared wage growth.