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View related content: Carpe Diem
This is an update of a Carpe Diem post from about a year ago that generated a lot of comments, so it appears again here with new international data for 2012 from the United States Department of Agriculture’s Economic Research Service on consumer spending on food in various countries around the world.
We hear reports all the time that real household incomes in the US are stagnant or falling, America’s middle class is disappearing, household wealth has declined, income inequality is rising, and various other stories of pessimistic gloom and doom. All of those reports might make one think that the standard of living for the average American is bad and getting worse. But here’s one basic measure of a country’s standard of living that shows Americans are better off than their consumer counterparts anywhere in the world: The share of consumer expenditures spent on food consumed at home. The table below displays rankings of 84 countries, from the lowest to highest share of consumer expenditures spent on food at home in 2012.
Relative to our total consumer spending per capita, Americans have the most affordable food on the planet — only 6.6% of consumer expenditures go to food consumed at home. European countries like Spain, France, Belgium, and Norway spend twice that amount on food as a share of total consumer expenditures, and consumers in countries like Turkey, China, and Mexico spend three times as much on food at home relative to total consumer expenditures compared to Americans.
Notice that consumer spending per person in Switzerland ($44,899) is about 30% higher than in America ($34,541), and the Swiss spent about twice as much on food per person in 2012 ($4,943) as Americans ($2,215), so their spending on food (11%) was higher than in America (6.6%). In Brazil, consumers spend only about half as much on food as Americans ($1,123 vs. $2,215), but as a share of consumer expenditures per person in Brazil ($7,063), spending on food is almost 2.5 times higher there (~16%) than here (6.6%).
How has spending on food as share of total consumer expenditures changed over time? The top chart above displays the historical shares of consumer expenditures spent for food at home back to 1929, using data from the Bureau of Economic Analysis (slightly different than the USDA data, which is not available before the most recent few years), and shows that spending on food as a share of total consumer expenditures has steadily trended downward, from a high of almost 25% during WWII, to less than 8% over the last decade. For those who think that the 1950s were the “golden age of America’s middle class,” it sure wasn’t so “golden” for food affordability – the share of consumer spending on food at home in the early 1950s was above 22%, or almost three times the 7.6% average share over the last decade. During the 1960s and through the first half of the 1970s, Americans spent roughly twice as much on food as a share of total consumer spending compared to today.
Update: The second chart above has been added in response to several comments that the international USDA data in the table below only includes food consumed at home, and not food consumed away from home at restaurants. The USDA provides another measure of food affordability for the US that goes back annually to 1929 and that measure is total consumer spending on food (both at home and away from home) as a share of disposable personal income, that measure of food affordability is displayed annually from 1929 to 2012 (data here in Table 7) in the bottom chart above. From a peak of above 25.2% in 1933, the share of disposable personal income spent on all food purchases has steadily declined over time has about 10% over the last decade. During the alleged “golden era of the middle class” in the early 1950s, the share of personal income spent on food was above 20%, more than twice the share today. During the decade of the 1960s, the average share of income spent on all food was above 15%. Therefore, even when food away from home is included, there is still a long term downward trend in the share of consumer spending on all food as share of disposable personal income.
For the increasing affordability of food over time for Americans as a share to total consumer expenditures, and for America having the world’s most affordable food as a share of consumer spending for decades, we can thank the innovation, technological advances, and ever-greater supply-chain and distributional efficiencies that drive America’s farming industry, which in turn drive down food prices relative to other goods and services and relative to our income. When it comes to food affordability, the “golden age of America’s middle class” is today, and certainly not decades in the past like the 1950s, 1960s or 1970s.
|Rank, 2012||Country||% of Consumer Spending on Food at Home, 2012||Consumer Spending, per Capita||Spending on Food at Home, per Capita|
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