WACO, Texas – Beyond the excruciating experiences of those directly afflicted, hunger is a pocketbook issue that adversely impacts every corner of the U.S. economy and every individual irrespective of socioeconomic circumstances.
In recent columns, I’ve talked about a study we performed as a public service that focused on the economic aspects of hunger. (You can download the study on our website at www.perrymangroup.com.)
In addition to enormous human costs, hunger imposes severe costs on the economy. Not having sufficient food leads to a number of problems, both individually and for society as a whole. Providing for basic food needs for all citizens is a worthy societal goal, and expanding and supporting food banks and the charitable distribution network they support can facilitate meeting this need.
The federal government’s commitment to hunger relief is presently focused on doing less, not more. Although there has been some improvement recently, the number of U.S. households with insufficient food is still far above the level observed before the recession. Federal programs have not kept pace with the problem and will likely fall further behind absent a change in philosophy.
Investing in food banks and the charitable food distribution networks they support both reduces the cost of hunger and serves as an economic stimulus. By using food banks and charitable distribution networks as one aspect of a hunger solution, it is possible to simultaneously reduce the economic costs of food insufficiency and increase the economic stimulus from the distribution network and related consumer spending.
Economic benefits stem from both sides of the equation: the reduction in costs of hunger and the increase in benefits from food bank assets. We estimate that the incremental benefits of expanding food bank and charitable food distribution networks enough to meet current food insecurity needs include $556.6 billion in yearly spending, $264.7 billion in annual gross product, and almost 3.1 million ongoing jobs in the United States.
Improvement in the core issues which contribute to poverty and food insecurity (such as education and health care) should clearly be part of any comprehensive solution, but the immediate issues can be eliminated by simply providing access to adequate nutrition. Food banks and the charitable distribution organizations they support are a viable approach to consider both nationally and at the community level. While the overall analysis that we conducted certainly suggests that expanded federal efforts would be appropriate, it also supports expansion through local resources.
The viability of this approach was recently demonstrated in a “real world” setting. A major recent fund-raising effort to significantly expand and modernize the West Texas Food Bank was successfully completed, and construction on the new facilities is now underway. The program serves a large geographic area that encompasses the Permian Basin, which has been experiencing significant growth and expanding needs.
Most of the funds were procured through foundations, corporations, individual donors, and other private sector entities. However, two local economic development agencies also provided significant financial support in recognition of the facts that (1) they were supporting a large-scale distribution facility that created jobs and purchased resources in the community, (2) expanding such operations is a common goal of economic development initiatives, and (3) the resulting spillover benefits would greatly enhance the local area. This project provides an example of precisely the mechanism that can be used to deal more effectively with hunger and food insecurity throughout the United States, and our study clearly demonstrates the rationale for such an approach.
Expanding these networks enough to solve the problem would cost much less than the resulting economic benefits. Based on current operations and needs, the cost for such an expansion would be approximately $16.2 billion per year (even assuming that the time provided by volunteers would have to be purchased in an expanded network). The economic benefits are far higher. In fact, every dollar invested in this process results in $33.27 in incremental spending, $15.82 in additional gross product, and $10.31 in personal income. If the lifetime effects of a single year of hunger are considered, the gains are much larger.
Hunger involves not only immeasurable human costs, but also economic costs stemming from higher health and education expenditure needs as well as worse health and education outcomes and resultant losses in income and production. Community-based food banks and charitable distribution systems are a beneficial economic stimulus in addition to reducing the cost of hunger. When these costs and benefits and the related multiplier effects are considered, an investment in solving U.S. hunger generates substantial economic returns.
Reducing and ultimately eliminating food insecurity is a worthy societal goal. Tens of millions of Americans do not have enough food to meet basic daily needs, which is nothing short of tragic. This fact alone should be sufficient to stimulate a greater response, but to date it has not. Unlike many complex socioeconomic issues, this one has a relatively simple solution: If people have access to food, they are not hungry!!
This analysis suggests that taking the steps to eliminate hunger also has enormous economic benefits that transcend the human suffering. Every year that this problem is allowed to persist literally saps trillions of dollars in long-term economic potential from the United States. For reasons of both human dignity and pecuniary interests, it is time to stop hunger in America!!
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.