It's pretty easy to find articles in the media and in various food blogs complaining (or worse, whining) about how expensive food is these days. But the chart below tells quite a different story:
--chart courtesy of Professor Mark J. Perry's Carpe Diem Blog
This chart says that Americans spent well more than 20% of their disposable income on food during the 1930s and 1940s. Since then, food costs have plummeted relative to our income--so much so that we now spend just 9.6% of our budgets on food.
Now, long-time CK readers know I hate to be faked out by charts that, oh, might be rigged by, say, a biased journalist who massages data to make a point. In order to control for this, please take a look at the source data behind the above chart. You'll be rewarded, because the data gets even more compelling once you explore it a bit further.
The USDA breaks down aggregate food expenditures into two categories: food expenditures at home (includes purchases from grocery stores and other retail outlets as well as purchases with food stamps) and food expenditures away from home (includes meals and snacks purchased by families and individuals).
Over the past eighty years, the food expenditures at home category declined from 20.3% of income to a paltry 5.6% of income. A decline of this magnitude is quite simply remarkable, especially considering that this is the least discretionary portion of our food spending. Imagine our grandparents and great-grandparents spending almost four times as much of their disposable income on food.
Equally intriguing is the food away from home category. This kind of spending is highly discretionary--if we'd like to make meaningful cuts to our food budgets, eliminating a few monthly restaurant meals is the quickest and easiest way to do so. Yet this category of expenditure grew from 3.1% to 4.0% of income. Those numbers may look small, but the key point is this: while our spending on at-home food plummeted, our spending on discretionary away-from-home food increased to nearly half of our overall food spending (4% out of 9.6%). That to me is a staggering insight, and it suggests that we could spend still less--possibly far less--on our overall food budgets by eating out less and eating at home more.
Furthermore, this chart doesn't address the massive range of food choices available to consumers now that were unavailable decades ago. Admittedly, some of these choices include fattening and expensive second-order foods, but that doesn't mean we have to buy them.
A side note: for a shocking perspective on how insanely wealthy we've become as a society, consider the increase in absolute dollars spent on food away from home: it grew from $2.6 billion in 1929 (a local peak, right before the Depression set in) to $422 billion (!) in 2008. That's a 162x increase. The next time you feel like life is unfair, please have another look at these numbers.
All of a sudden, I have a lot more admiration for my grandparents and their era's culture of intelligent thrift.
Readers, what are your thoughts?
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