Tuesday, November 10, 2009

Unsustainable food marketing...

Compare and contrast the following news items.  First, the connection between obesity and minimum wage levels.
Growing consumption of increasingly less expensive food, and especially “fast food”, has been cited as a potential cause of increasing rate of obesity in the United States over the past several decades. Because the real minimum wage in the United States has declined by as much as half over 1968-2007 and because minimum wage labor is a major contributor to the cost of food away from home we hypothesized that changes in the minimum wage would be associated with changes in bodyweight over this period. To examine this, we use data from the Behavioral Risk Factor Surveillance System from 1984-2006 to test whether variation in the real minimum wage was associated with changes in body mass index (BMI). We also examine whether this association varied by gender, education and income, and used quantile regression to test whether the association varied over the BMI distribution. We also estimate the fraction of the increase in BMI since 1970 attributable to minimum wage declines. We find that a $1 decrease in the real minimum wage was associated with a 0.06 increase in BMI. This relationship was significant across gender and income groups and largest among the highest percentiles of the BMI distribution. Real minimum wage decreases can explain 10% of the change in BMI since 1970. We conclude that the declining real minimum wage rates has contributed to the increasing rate of overweight and obesity in the United States. Studies to clarify the mechanism by which minimum wages may affect obesity might help determine appropriate policy responses. [More]

Apparently, for reasons to be determined, the lack of any meaningful floor in wages shifts food consumption to less desirable health effects.  This is surprisingly close to the thrust of Food, Inc. and a serious indicator of one the problems our system currently struggles with: the increasing concentration of income growth into fewer hands.
Concern over the perilous state of the economy ran throughout the discussions during the conference.
“There are families not eating at the end of the month,” said Stephen Quinn, executive vice president and chief marketing officer at Wal-Mart Stores, and “literally lining up at midnight” at Wal-Mart stores waiting to buy food when paychecks or government checks land in their accounts.
Among the steps Wal-Mart is taking to address the changes in shopping habits, Mr. Quinn listed an overhaul of the retailer’s private-label brand, Great Value, which is promoted in commercials describing how families can fix dinners with Great Value products “for less than $2 a serving.” [More]

After visiting with dairy farmers this week, and trying to think of their marketing perspective, the failure of our economic engine to produce income gains for most Americans poses a huge marketing problem for these producers. The tiny portion of us who are seeing income growth will niot be spending more on food, but folks at the bottom would.

Redistributive schemes are ideological anathema until you try to sell a product.


Anonymous said...

food.inc--sensationalism at its best--beef and pork guys are just about done--why not lick them again--next stupid thing is a major school district deemed mondays-meatless mondays-- should be documentary done on "stupid people-stupid ideas"...........bright note--corn and beans are great and indian summer is even better-regards-kevin

John Phipps said...


congrats - our yields (corn) have tailed off badly from OK to miserable as we work into later planted corn.

One bright spot, the field I tiled last year probably made 25% of the investment back the first year.