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    Food Prices Approach Record Highs, Threatening the World’s Poorest

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    The prices have climbed to their highest level since 2011, according to a U.N. index. It could cause social unrest “on a widespread scale,” one expert said.WASHINGTON — Food prices have skyrocketed globally because of disruptions in the global supply chain, adverse weather and rising energy prices, increases that are imposing a heavy burden on poorer people around the world and threatening to stoke social unrest.The increases have affected items as varied as grains, vegetable oils, butter, pasta, beef and coffee. They come as farmers around the globe face an array of challenges, including drought and ice storms that have ruined crops, rising prices for fertilizer and fuel, and pandemic-related labor shortages and supply chain disruptions that make it difficult to get products to market.A global index released on Thursday by the United Nations Food and Agriculture Organization showed food prices in January climbed to their highest level since 2011, when skyrocketing costs contributed to political uprisings in Egypt and Libya. The price of meat, dairy and cereals trended upward from December, while the price of oils reached the highest level since the index’s tracking began in 1990.Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics who was formerly chief economist at the International Monetary Fund, said that food price increases would strain incomes in poorer countries, especially in some parts of Latin America and Africa, where some people may spend up to 50 or 60 percent of their income on food.He said that it wasn’t “much of an exaggeration” to say the world was approaching a global food crisis, and that slower growth, high unemployment and stressed budgets from governments that have spent heavily to combat the pandemic had created “a perfect storm of adverse circumstances.”“There’s a lot of cause for worry about social unrest on a widespread scale,” he added.Even before the pandemic, global food prices had been trending upward as disease wiped out much of China’s pig herd and the U.S.-China trade war resulted in Chinese tariffs on American agricultural goods.But as the pandemic began in early 2020, the world experienced seismic shifts in demand for food. Restaurants, cafeterias and slaughterhouses shuttered, and more people switched to cooking and eating at home. Some American farmers who could not get their products into the hands of consumers were forced to dump milk in their fields and cull their herds.Two years later, global demand for food remains strong, but higher fuel prices and shipping costs, along with other supply chain bottlenecks like a shortage of truck drivers and shipping containers, continue to push up prices, said Christian Bogmans, an economist at the International Monetary Fund.Drought and bad weather in major agricultural producing countries like Brazil, Argentina, the United States, Russia and Ukraine have worsened the situation.The I.M.F.’s data shows that average food inflation across the world reached 6.85 percent on an annualized basis in December, the highest level since their series started in 2014. Between April 2020 and December 2021, the price of soybeans soared 52 percent, and corn and wheat both grew 80 percent, the fund’s data showed, while the price of coffee rose 70 percent, due largely to droughts and frost in Brazil.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: We asked readers to send questions about inflation. Top experts and economists weighed in.What’s to Blame: Did the stimulus cause prices to rise? Or did pandemic lockdowns and shortages lead to inflation? A debate is heating up in Washington.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.While food prices appear set to stabilize, events like a conflict in Ukraine, a major producer of wheat and corn, or further adverse weather could change that calculation, Mr. Bogmans said.The effects of rising food prices have been felt unevenly around the world. Asia has been largely spared because of a plentiful rice crop. But parts of Africa, the Middle East and Latin America that are more dependent on imported food are struggling.Countries like Russia, Brazil, Turkey and Argentina have also suffered as their currencies lost value against the dollar, which is used internationally to pay for most food commodities, Mr. Bogmans said.In Africa, bad weather, pandemic restrictions and conflicts in the Democratic Republic of Congo, Ethiopia, Nigeria, South Sudan and Sudan have disrupted transportation routes and driven up food prices.Joseph Siegle, the director of research at National Defense University’s Africa Center for Strategic Studies, estimated that 106 million people on the continent are facing food insecurity, double the number since 2018.“Africa is facing record levels of insecurity,” he said.While shopping at a market in Mexico City’s Juarez neighborhood on Thursday, Gabriela Ramírez Ramírez, a 43-year-old domestic worker, said the increase in prices had strained her monthly budget, about half of which goes to food. Inflation in Mexico reached its highest rate in more than 20 years in November, before easing slightly in December.“It affects me a lot because you don’t earn enough, and the raises they give you are very small,” she said. “Sometimes we barely have enough to eat.”The impact has been less severe in the United States, where food accounts for less than one-seventh of household spending on average, and inflation has become broad-based, spilling into energy, used cars, dishwashers, services and rents as price increases reach a 40-year high.Yet American food prices have still risen sharply, putting a burden on the poorest households who spend more of their overall budget on food. Food prices rose 6.3 percent in December compared with a year ago, while the price of meat, poultry, fish and eggs jumped 12.5 percent, according to the Bureau of Labor Statistics.The Biden administration has tried to restrain some of these increases, including with an effort to combat consolidation in the meat packing business, which it says is a source of higher prices.Inflation F.A.Q.Card 1 of 6What is inflation? More

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    Higher Food Prices Hit the Poor and Those Who Help Them

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    Many households are being forced to adjust their shopping lists or seek assistance. But food banks, too, are feeling the pinch.With food prices surging, many Americans have found their household budgets upended, forcing difficult choices at the supermarket and putting new demands on programs intended to help.Food banks and pantries, too, are struggling with the increase in costs, substituting or pulling the most expensive products, like beef, from offerings. What’s more, donations of food are down, even as the number of people seeking help remains elevated.Even well-off Americans have noticed that many items are commanding higher prices, but they can still manage. It’s different for people with limited means.“Any time someone is low income, that means they’re spending a higher percentage on needs like food and housing,” said Diane Whitmore Schanzenbach, director of the Institute for Policy Research at Northwestern University. “When prices go up, they have less slack in their budgets to offset and they are quick to fall into hardship.”Before the run-up in prices — driven by supply-chain knots and rising labor costs — Robin Mueller would buy ground beef for meatloaf or hamburgers to serve once or twice a week for her family in Indianapolis. Now she can afford to cook it only once or twice a month.“You have to pick and choose,” said Ms. Mueller, who is 52 and disabled and lives with her daughter and her husband. “Before, you didn’t have to do that. You could just go in and buy a week or two’s worth of food. Now I can barely buy a week’s worth.”She has turned to food banks in Indianapolis for help, but they, too, are feeling the pinch.A case of peanut butter that was $13 to $14 before the pandemic now costs $16 to $19, according to Alexandra McMahon, director of food strategy for the Gleaners Food Bank of Indianapolis. Green beans that used to retail for $9 a case now sell for $14.“It has a big impact,” said Joseph Slater, chief operating officer of Gleaners. “It’s on our minds and it’s on the minds of our hungry neighbors as well.”In New York, Tynicole Lewis and her daughter, Lanese, depend on food stamps, but Ms. Lewis said that the aid runs out well before the end of the month now. Lanese is diabetic and Ms. Lewis serves as much protein and vegetables as possible — foodstuffs that have become especially pricey.“Food is expensive, and when the food stamps are gone, they’re gone,” said Ms. Lewis, who lives on the Lower East Side of Manhattan and earns $12,000 a year as a grocery store worker. “I have to wait.”She, too, depends on food pantries and has given up buying meat for the most part. “I eat a lot from the pantry, whatever they get,” Ms. Lewis said. “I like fish and I’ll treat myself when I get the food stamps.”While overall consumer prices in September were up 5.4 percent from a year ago, the cost of meat is up slightly more than that. Prices of staples like dairy products, fruits, grains and oils are also rising.Prices of meat, poultry, fish and eggs in U.S. cities are up 15 percent since the start of 2020, according to the Bureau of Labor Statistics.The run-up in costs at the supermarket comes even as gasoline prices have risen and natural gas and heating oil prices are predicted to be higher this winter, putting further pressure on those with low incomes.In addition, the mammoth assistance programs rolled out by the federal government in response to the pandemic in 2020 have largely lapsed. While some households built up savings from government payments, others have little room for extra expenses.The forces behind higher food prices have been building for some time and aren’t going away anytime soon, said Michael Swanson, chief agricultural economist at Wells Fargo.“People are shocked, but this is a slow-motion train wreck,” he said. “The scary thing is that food companies haven’t passed along all of their costs yet.”The warehouse at the Gleaners Food Bank.Kaiti Sullivan for The New York TimesHigher transportation and warehousing expenses lead the list of causes, along with rising labor costs at meat processing centers and other nodes in the food supply chain.To be sure, there are some winners as a result of the cost squeeze. While meat prices are up sharply for consumers, prices for cattle and other livestock haven’t moved as much. The result is buoyant profits for beef processors, Mr. Swanson said.“This is not going to go backwards anytime soon,” he added. “As soon as producers and retailers get these price increases, they are very sticky.”Behind the scenes, logistics expenses have jumped even more sharply than prices for foodstuffs, along with the costs of unglamorous items that few gave much thought to a few years ago.Understand the Supply Chain CrisisCard 1 of 5Covid’s impact on the supply chain continues. More

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    Vast Expansion in Aid Kept Food Insecurity From Growing Last Year

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    Despite the economic downturn, government figures for 2020 show no overall rise in hunger of the sort typical in past recessions. But some groups still suffered.As 20 million jobs vanished at the start of the coronavirus pandemic and traffic jams formed outside food banks, many experts warned that the twin crises of unemployment and disease would produce soaring rates of hunger.But huge expansions of government aid followed, and data released on Wednesday suggests the extraordinary spending achieved a major goal: Despite shuttered businesses and schools, food insecurity remained unchanged from prepandemic levels. That result defied past experience, when recessions caused food hardship to spike.“This is huge news — it shows you how much of a buffer we had from an expanded safety net,” said Elaine Waxman, who researches hunger at the Urban Institute in Washington. “There was no scenario in March of 2020 where I thought food insecurity would stay flat for the year. The fact that it did is extraordinary.”The government found that 10.5 percent of American households were food insecure, meaning that at some point in the year, they had difficulty providing enough food to all members of the home because of a lack of money. It also found that 3.9 percent experienced “very low food security,” meaning the lack of resources caused them to reduce their food intake. That was statistically unchanged from the previous year.Food insecurity did rise among some groups, including households with children, households with Black Americans and households in the South. The gap between Black and white households, which was already large, widened further, with 21.7 percent of Black households experiencing food insecurity, compared with 7.1 percent of white households. That is a gap of 14.6 percentage points, up from 11.2 points in 2019, before the pandemic struck.Black households suffered disproportionately from job losses and school closings during the pandemic and had fewer assets with which to buffer a crisis.Still, the overall pattern — of hunger constrained — contrasted sharply with the country’s experience during 2008, when nearly 13 million additional Americans became food insecure at the start of the Great Recession. Last year, 38.3 million Americans lacked food security, a level far below the 50.2 million Americans in that situation at the recession’s peak.As President Biden pushes a $3.5 trillion plan to further expand the safety net over Republican opposition, the report on Wednesday from the Agriculture Department provided fodder for both sides. Supporters said it showed the value of increased aid, while critics said the unchanged rates of food hardship showed that further spending was not necessary.The aid expansions reflected in Wednesday’s report occurred early in the pandemic last year. They include the first round of stimulus checks and expanded unemployment benefits, which passed with support from both parties and President Donald J. Trump.Several large rounds of aid followed, most recently in a $1.9 trillion spending package in March that President Biden championed. It included a program of monthly payments to most families with children that Democrats hope to make permanent..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“A lot of us warned that those further expansions were unnecessary and this provides additional support that that was true,” said Angela Rachidi, a hunger expert at the American Enterprise Institute. She said that progressives were pushing a narrative of exaggerated hardship to justify continued spending increases.In an economic crisis, food is often the first expense that a family with money troubles will cut. Unpaid rents risk eviction, but grocery purchases can be incrementally reduced and meals stretched.Though poverty and food insecurity are related, they are not synonymous. The poorer a household is, the more likely it is to experience food insecurity, but most of those suffering from food insecurity are not poor.Among households disclosing their incomes, 34 percent were poor while 32 percent had incomes greater than 185 percent of the poverty line (about $26,000 for a family of four), according to an analysis by Craig Gundersen, an economist at Baylor University.“There are a lot of Americans in precarious situations,” Mr. Gundersen said. “People are working, but one car repair or sick kid can send them into food insecurity.”The remarkable images of food lines at the pandemic’s start cast a spotlight on food hardship, while the large expansion of aid that followed turned the United States into a laboratory for antihunger policy. Among the lessons learned during the pandemic, researchers said the new report supported at least four.As aid rose, food insecurity fell.The relationship between higher spending and lower hardship may sound obvious. But some social problems prove difficult to address through federal aid. Congress has approved about $46 billion in emergency rental relief, but only a small portion has reached families in need.Wednesday’s report added to a growing body of research showing the opposite: that aid has led to quick reductions in food hardship. “This is not an intractable problem,” Mr. Gundersen said.Last year, the Brookings Institution found that a summer program that replaced school meals with electronic benefit cards led to substantial reductions in child hunger.Likewise, researchers at the University of Michigan, analyzing Census Bureau surveys, found the 2021 stimulus checks brought immediate reductions in food hardship. Most recently, a study by researchers at Columbia University found the same pattern after the introduction of the child tax credit in July, but only among households with children — the group eligible for the monthly payments.“We now have definitive evidence that food hardship is responsive to government aid,” said H. Luke Shaefer, a University of Michigan researcher who studied the stimulus checks. “The effect is crystal clear.”While Wednesday’s report was based on data collected in December 2020, Mr. Shaefer said other surveys showed hardship had continued to fall. “We could potentially be at the lowest level of food insecurity ever recorded, because of the government transfers,” he said.Schools play a vital role.Before the pandemic, school meals accounted for as much as 7 percent of economic resources among low-income households, according to one study.Max Whittaker for The New York TimesWhile food insecurity fell overall, it rose among households with children — to 7.6 percent last year, from 6.5 percent in 2019. One likely explanation is the widespread closure of schools, a reminder that they play a large, if often overlooked, role in delivering food aid.Before the pandemic, Judith Bartfeld, a researcher at the University of Wisconsin, found that school meals account for as much as 7 percent of economic resources among low-income households. That financial contribution approached the impact of the Supplemental Nutrition Assistance Program, or SNAP, the main federal antihunger program, which provided more than 10 percent of household resources but is larger and more visible.“One of the big lessons from the pandemic is the critical role that school meals play as part of the nutrition safety net,” Ms. Bartfeld said. “The value of school meals became transparent when the meals disappeared.”School closures may have also increased food hardship indirectly, by making it hard for parents to return to work.Among the pandemic-era programs is one that replaced the value of lost school meals with electronic benefit cards. Research found it reduced food hardship, though many states issued the aid after significant delays. Congress extended the program during the summers of 2020 and 2021, and the Biden administration wants to make the summer electronic benefit program permanent, to combat the rise in hunger that typically comes with the closure of schools.Most states participated in the summer program this year with the significant exception of Florida, where Gov. Ron DeSantis, a Republican, has declined without explanation to seek the $820 million the state could receive in federal aid.The gaps between Black and white Americans are large.The longstanding disparities in food insecurity between Black and white households had been narrowing in recent years. But last year, they widened again. Though the share of white households suffering food insecurity fell by 0.8 percentage points, it rose by 1.6 points in Hispanic households and by 2.6 points in Black households.One reason may be the nature of the recession, which disproportionately hurt Black workers, many of them in low-wage service jobs. It is also possible that Black and Latino families faced greater barriers than whites families in gaining access to government aid.A third potential explanation may be that Black families entered the recession with far fewer assets than white households and less access to credit, both of which can buffer food hardships.“This is the most disturbing part of the story,” said Ms. Waxman, the Urban Institute researcher. “Whatever we did wasn’t enough to support Black families during this period.”Charity plays an important but limited role.The crisis thrust the United States’ unusual network of private food banks into the spotlight. Able to respond more quickly than the government, they played a highly visible role in emergency aid. Feeding America, the national association of food banks, reported a 44 percent increase in meals served.But food banks are often among the first groups to call for expansions of government aid, arguing they can only complement the much larger public programs. Feeding American said SNAP, formerly known as food stamps, provides about nine times as many meals as food banks. The San Antonio Food Bank is among the places where lines stretched for miles in the spring of 2020. It went from feeding 60,000 people a week in early March to 120,000 in late April. It is still feeding about 90,000.But Eric Cooper, who runs the group, said the crisis reinforced both the fragility of the average household and the limited role that private charities can play.“It was the federal expansions that pulled people out of our parking lots and into grocery stores, which is where people should get their food,” he said. “We’re so small — the safety net is much larger.” More

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    Why the Taliban Desperately Need Cash to Run Afghanistan

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    The group has long tapped underground banks and opium to fund Afghanistan’s insurgency. Fixing the nation’s problems will require a lot more than that.As Afghans pay surging prices for eggs and flour and stand in long lines at the bank, money changers like Enayatullah and his underground financial lifeline have found themselves in desperate demand.Enayatullah — his family name withheld — holds down a tiny point in a sprawling global network of informal lenders and back-room bankers called hawala. The Taliban used hawala to help fund their ultimately successful insurgency. Many households use it to get help from relatives in Istanbul, London and Doha. Without cash from hawala, economic life in whole swaths of Afghanistan would come to a crashing halt.That is now a very real possibility. Foreign aid has dried up. Prices are surging. The value of the afghani currency is tumbling. The country’s $9.4 billion in reserves have been frozen.And hawala won’t be enough, said Enayatullah, who says people’s need for money has become so desperate in the last week he raised his commission to 4 percent per transaction, about eight times his usual rate. The system is now struggling with a lack of money, leading the Taliban and dealers themselves to rein in activity to preserve cash.“The demand,” Enayatullah said, “is too much.”The Taliban won the war in Afghanistan, and an economic crisis may be their prize. They have been cut off from the international banking system and from the country’s previous funding sources, like the International Monetary Fund, the World Bank and the United States government. Foreign aid makes up nearly half of economic output.Without other sources of money, millions of Afghan people could lose the gains they made, in fits and starts, over the past two decades. Already, drought conditions have created a real risk of hunger.“We have conflict. We have war. This is another misery,” said Shah Mehrabi, a board member of Afghanistan’s central bank. “You will have a financial crisis and it will push families further into poverty.”Food prices soared last week after the Taliban took over, at a market in Kabul, Afghanistan.Jim Huylebroek for The New York TimesLong before Afghanistan had formal institutions like banks, it had the hawala system. Millions of Afghans, shut out from formal banking, used it to send and receive remittances, as have migrant workers and others around the world.The system functions on the premise that people want to send equivalent amounts of money between two locations. Loans and transfers are recorded on ledgers, but money doesn’t have to change hands. Those features make it useful for evading taxes, paying bribes and laundering ill-gotten gains.Hawala was a necessity under the Taliban-led Afghanistan of two decades ago, before the American invasion in 2001, when money from illicit sources greased the country’s financial wheels. In addition to hawala, opium from the country’s vast poppy fields and smuggling brought the country money from the rest of the world, offsetting weak trade. As insurgents, the Taliban funded themselves by taxing smuggled goods like televisions and fuel, in transactions often financed through hawala, and through the drug trade.But the Afghanistan of 2021 is a country transformed. The economy, though its growth has been unsteady over the past decade, is five times the size it was in the early 2000s. Once scarce in most places, electricity is now widely available. Smartphones and internet access are common.Foreign money helped. Over the two decades, the United States spent more than $145 billion on reconstruction activities in Afghanistan, according to the U.S. government. Much of it was used to build the Afghan security forces, but funds also went toward large-scale infrastructure projects and an economic support fund. More than three quarters of the Afghan government’s $11 billion annual public expenditures was paid for by donor funding.The Taliban will be hard-pressed to make up that shortfall.Since taking over Afghanistan, the Taliban have said they will stop production of opium. But for the hawala system to work, Afghanistan must ultimately find sources of hard currency to lubricate the lines of credit that would snake back into the country. With exports in 2019 of about $870 million — mostly carpets, plus figs, licorice and other agricultural products — Afghanistan has little to offer on a large scale that is as lucrative as opium.The Taliban could see support from governments like Pakistan, Iran and China that might have their own reasons for keeping relations with Afghanistan warm. Trade has already started up again with Iran, said David Mansfield, an independent consultant and an expert on rural Afghanistan, citing satellite imagery of fuel tankers and transit trucks moving across the border. He has estimated that during its insurgency, the Taliban was able to raise more than $100 million a year from informally taxing goods from Iran and southern Afghanistan.Even if the Taliban raised several multiples more than that, it would mean a return to the minimalist state like the 1990s.“Economic crisis, humanitarian disaster, more refugees,” Mr. Mansfield said. “The other side of this is we have an Afghan population in the past 20 years who have seen some degree of transformation. Their livelihoods have improved.”People stood in line outside Azizi bank in Kabul on Sunday, the first day banks reopened in Afghanistan’s capital.Jim Huylebroek for The New York TimesThe hawala system, though central to life in Afghanistan, won’t be enough on its own. While many hawala transactions exist only on ledgers, they are ultimately backed by cold, hard cash often held by hawala dealers called hawaladars. In Afghanistan, say experts, hawaladars regularly use the local currency, the afghani, to buy American dollars from Afghanistan’s central bank, a transaction that can help stabilize the afghani’s value.Understand the Taliban Takeover in AfghanistanCard 1 of 6Who are the Taliban? More

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    Stimulus Checks Substantially Reduced Hardship, Study Shows

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    Researchers found that sharp declines in food shortages, financial instability and anxiety coincided with the two most recent rounds of payments.WASHINGTON — Julesa Webb resumed an old habit: serving her children three meals a day. Corrine Young paid the water bill and stopped bathing at her neighbor’s apartment. Chenetta Ray cried, thanked Jesus and rushed to spend the money on a medical test to treat her cancer.In offering most Americans two more rounds of stimulus checks in the past six months, totaling $2,000 a person, the federal government effectively conducted a huge experiment in safety net policy. Supporters said a quick, broad outpouring of cash would ease the economic hardships caused by the coronavirus pandemic. Skeptics called the policy wasteful and expensive.The aid followed an earlier round of stimulus checks, sent a year ago, and the results are being scrutinized for lessons on how to help the needy in less extraordinary times.A new analysis of Census Bureau surveys argues that the two latest rounds of aid significantly improved Americans’ ability to buy food and pay household bills and reduced anxiety and depression, with the largest benefits going to the poorest households and those with children. The analysis offers the fullest look at hardship reduction under the stimulus aid.Among households with children, reports of food shortages fell 42 percent from January through April. A broader gauge of financial instability fell 43 percent. Among all households, frequent anxiety and depression fell by more than 20 percent.While the economic rebound and other forms of aid no doubt also helped, the largest declines in measures of hardship coincided with the $600 checks that reached most people in January and the $1,400 checks mostly distributed in April.“We see an immediate decline among multiple lines of hardship concentrated among the most disadvantaged families,” said H. Luke Shaefer, a professor at the University of Michigan who co-authored the study with a colleague, Patrick Cooney.Given the scale of the stimulus aid — a total of $585 billion — a reduction in hardship may seem like a given, and there is no clear way to measure whether the benefits were worth the costs.The study does not address the critics’ main complaints, that the spending swelled the deficit, that much of the money went to economically stable families who did not really need it and that the checks were part of a pattern of aid over the last year that left some people with less incentive to find jobs. Some analysts say hardship would have fallen anyway as a result of job growth and other safety net programs.Still, the aggressive use of stimulus checks coincides with growing interest in broad cash payments as a tool in social policy, and the evidence that they can have an immediate effect on the economic strains afflicting many households could influence that debate.Starting in July, the government will mail up to $300 a month per child to all but the most affluent families in a yearlong expansion of the child tax credit that Democrats want to make permanent.Ms. Ray had to contribute $600 to the cost of a CT scan for her cancer diagnosis. The stimulus check in April allowed her to afford it.Callaghan O’Hare for The New York TimesWhile the ability of cash payments to reduce hardship might seem obvious, Mr. Shaefer pointed out that critics of such aid often warn that the needy might waste it. He argued that the size, speed and variety of the hardship reductions vindicated the use of broad cash relief. While other forms of pandemic aid have been better targeted, some have taken many months to distribute and can be used only for dedicated purposes like food or housing.“Cash aid offers families great flexibility to address their most pressing problems, and getting it out quickly is something the government knows how to do,” Mr. Shaefer said. Extrapolating from the survey data, he concluded that 5.2 million children had escaped food insufficiency since the start of the year, a figure he called dramatic.The experience of Ms. Ray, a warehouse worker at a recycling company in Houston, captures the hardships that the pandemic imposed and the varied ways that struggling families have used stimulus checks to address them. Earning $13 an hour, Ms. Ray had an unforgiving budget even before business closures reduced trash collection and cut her hours by a third.Her car insurance lapsed. Her lights were shut off. She skipped meals, even with food pantry aid, and re-wore dirty work clothes to save on laundromat costs. When her daughter discovered that they owed thousands in rent, she offered to quit high school and work, which Ms. Ray forbid. A stimulus payment in January — $1,200 for the two of them — let her pay small parts of multiple bills and restock the freezer.“It bridged a gap,” Ms. Ray said, while she waited for slower forms of assistance, like rental aid.Then she got cancer. To confirm the diagnosis and guide her treatment, she had to contribute $600 to the cost of a CT scan, which she did with the help of a payment in April totaling $2,800.In addition to providing for the test, Ms. Ray said, the checks brought hope. “I really got down and depressed,” she said. “Part of the benefit of the stimulus to me was God saying, ‘I got you.’ Spiritual and emotional reassurance. It took a lot of stress off me.”Scott Winship, who studies poverty at the American Enterprise Institute, questioned the reliability of the census data used in the University of Michigan study, noting that fewer than one in 10 of the households the government contacts answer the biweekly surveys.He also argued that hardship would have fallen anyway, since the last round of stimulus checks coincided with tax season, which sends large sums to low-wage workers through tax credits. Between the earned-income tax credit and the child tax credit, a single parent with two children can receive up to nearly $8,500 a year.Researchers at Columbia University estimate that poverty fell sharply in March, but Zachary Parolin, a member of the Columbia team, said that about half the decline would have occurred without the pandemic relief, primarily because of the tax credits.Noting that the stimulus checks allocated as much to households with incomes above $100,000 as they did to those below $30,000, Mr. Winship called them inefficient and a poor model for future policy. “It’s not sustainable to just give people enough cash to eliminate poverty,” he said. “And in the long run it can have negative consequences by reducing the incentives to work and marry.”Analysts have long debated the merits of cash versus targeted assistance like food stamps or housing subsidies. Cash is easy to send and flexible to use. But targeted benefits offer more assurance that the aid is used as intended, and they attract political support from related businesses like grocers and landlords.Throughout the pandemic, policymakers have employed both approaches. The first round of stimulus checks, $1200 per adult and $500 per child last year, started before the Census Bureau surveys began, so it is harder to gauge its effect.With full eligibility extending to families with incomes of up to $150,000, the stimulus checks could reach nearly 300 million Americans. While that greatly increased the cost, Mr. Shaefer said it reduced the resentment that could accompany aid to the chronically needy and noted that hardships have expanded up the income ladder.Even among households that had prepandemic incomes of $50,000 to $75,000, more than 11 percent of those with children sometimes or often lacked food at the start of the year — a figure that has since fallen in half, according to the Census data.Ms. Ray said she had skipped meals and reworn dirty work clothes to save on laundry costs during the economic downturn.Callaghan O’Hare for The New York TimesWhen some people heard the latest checks were coming, they considered the news too good to be true. Ms. Webb, a St. Louis nursing aide with three young children, lost about two-thirds of her earnings when the pandemic left fewer patients seeking in-home care. She found another job but lost it after catching Covid. Food was the first casualty.“We’d have breakfast a little later than normal, and then dinner — no lunch,” she said. “Sometimes the kids would have dry cereal because we didn’t have milk.”Despite her skepticism, Ms. Webb received $8,000 for her four-person family between the two rounds. She used the money to pay back family loans and reduce her overdue rent, and she started serving lunch and an afternoon snack “to make sure the kids were full-full.”“I was like, ‘Woo!’ This is the most money I ever seen in my bank account,” she said. “I’m still in a hole, but I’m starting to see more sunlight now.”Mr. Shaefer acknowledged that other aid and an improving economy might have helped reduce hardship, but he said the timing pointed toward the stimulus checks. Among families with children, nearly 90 percent of the improvement in food sufficiency this year occurred in the two weeks after each round of payments.The study cited another direct link between cash aid and hardship: after the government stopped supplementing jobless benefits last fall, food insufficiency among families with children rose nearly 25 percent.“Throughout the crisis, the level of hardship faced by U.S. households can be directly linked to the federal government’s response,” Mr. Shaefer and Mr. Cooney wrote.Low-income families often emphasize the stress that economic uncertainty brings, especially when it threatens needs as basic as shelter and food. At the start of this year, 73 percent of households with children reported spending at least several days a week feeling anxious. That figure has since fallen to 57 percent, according to the census data.“I really got down and depressed,” Ms. Ray said. “Part of the benefit of the stimulus to me was God saying, ‘I got you.’ Spiritual and emotional reassurance. It took a lot of stress off me.”Callaghan O’Hare for The New York TimesBut mental health might have improved for many reasons, Mr. Winship said, including increasing vaccinations, falling disease rates and the socialization that has accompanied the reopening of businesses and schools. “I would really question whether that’s the stimulus checks,” he said.Still, research in recent decades has emphasized the debilitating effect that stress can have on children raised in low-income households. And recipients of the stimulus payments often describe them as an emotional balm.For Ms. Young, 40, the problems of poverty and poor mental health are deeply entwined. A Chicago woman with schizophrenia, she is raising a teenager and a baby on food stamps and disability checks. Extra help from adult children lapsed during the pandemic when they lost work. The result was a disconnected water line and two weeks of toting jugs from her neighbor’s apartment.“It’s really depressing, having to worry about losing your lights and water,” Ms. Young said. “Very stressful. It was a very, very dark path.”She did not receive the stimulus payment that most people got at the start of the year, for reasons she does not understand. She checked her bank account in April, to see if she could buy a loaf a bread, when she found it swollen with a $1,400 stimulus check.Ms. Young bought the bread — two loaves — and paid down her utility bills to avoid more outages. “I did it that day,” she said. “You just don’t know — it was such a relief.” More

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    Lebanon’s Financial Collapse Hits Where It Hurts: The Grocery Store

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    The country’s currency has sunk to a new low against the dollar, sending prices for once affordable foods soaring out of reach.BEIRUT, Lebanon — In normal times, Ziad Hassan, a grocery store manager in Beirut, would get a daily email from his chain’s management telling him which prices needed to be adjusted and by how much.But as Lebanon’s currency has collapsed, sending the economy into a tailspin, the emails have come as often as three times a day, ordering price increases across the store.“We have to change everything,” an exasperated Mr. Hassan said, adding that his employees often weren’t even able to finish marking one price increase before the next one arrived. “It’s crazy.”The country’s economic distress grew more acute last week as the Lebanese pound sank to 15,000 to the dollar on the black market — its lowest level ever — sucking value from people’s salaries as prices for once affordable goods soared out of reach. It has since rebounded to about 12,000.Lebanon has been grappling with a web of economic and political crises since late 2019 that have led to rampant unemployment, skyrocketing prices, road closures by angry protesters and a government with no clear plan to slow the descent. A catastrophic explosion in Beirut’s port in August, which killed 190 people and left a large swath of the capital in ruins, only deepened the misery.In a country where most products are imported, the currency collapse has left no sector unaffected.The catastrophic explosion at Beirut’s port in August last year has deepened the misery in Lebanon.Diego Ibarra Sanchez for The New York TimesFood prices had risen 400 percent as of December compared with a year earlier, according to government statistics, while prices for clothing and shoes had gone up 560 percent and hotels and restaurants more than 600 percent.Scores of pharmacies across the country went on strike last Friday to protest conditions that have left them without some medicines and cut into their profits. Professionals including lawyers, teachers, doctors and university professors have watched the value of their salaries shrink. Many others have been pushed into poverty.In August, the United Nations said that more than 55 percent of Lebanon’s population had become poor, nearly double the number from the year before. Extreme poverty had increased threefold to 23 percent. And the situation has worsened since.The crisis springs from the collapse of a policy by Lebanon’s central bank to keep the Lebanese pound, or lira, pegged to the dollar at a rate of about 1,500 to 1 since 1997. That allowed people to use the two currencies interchangeably and made it easy for merchants selling products in pounds to convert their profits into dollars to pay for imports.But the state’s ability to maintain the peg faltered in late 2019, when mass protests erupted over decades of political corruption and poor governance. Since then, two governments have resigned and the gap between the pound and the dollar has widened. Western and United Nations officials’ calls for reforms, which could unlock foreign aid and a potential bailout from the International Monetary Fund, have gone unheeded.For many Lebanese, the most personal element of the crisis is the grocery store, where products once considered staples have vanished and other essentials have tripled or quadrupled in price. There has been a run on staples like oil, flour, sugar and rice.“Everything is soaring,” said Suheir al-Jizini, 60, after realizing that the price of the jug of cooking oil she had bought last week was now two-thirds higher. “I’m really shocked.”Riot police standing guard in front of Lebanon’s Central Bank in Beirut last week during a demonstration over the rising cost of living and low purchasing power of the Lebanese pound.Wael Hamzeh/EPA, via ShutterstockShe had come to the store planning to also buy laundry detergent and pasta, but realized she didn’t have enough cash. She said her husband brought in 750,000 pounds per month as a driver. That used to be worth $500 but was now less than $60.The World Food Program said in November that food prices in Lebanon had increased 423 percent since October 2019, the largest jump since monitoring began in 2007. Prices have continued to rise since, putting acute pressure on the poor.Faten Haidar, 29, said she was struggling to pull together meals for her three children as food prices shot up and her husband’s earnings from his coffee stand declined. Speaking by telephone from the northern city of Tripoli, she said that she had only labneh — a strained yogurt — in the fridge and that she was already in debt to her local shop.“I don’t know how to pay them,” she said.Other essentials also depleted her funds, she said, like sanitary pads, whose price had quadrupled. That burden will increase when her 12-year-old daughter reaches puberty.“I can’t afford mine,” she said. “How can I afford hers?”The value of soldiers’ and police officers’ salaries has also fallen, heightening concerns that social unrest and crime will increase. This month, Mohammed Fahmy, the interior minister, who oversees the security forces, said those salaries had “reached rock bottom.”Stocking up at a gas station in Beirut. The price of fuel has also increased.Wael Hamzeh/EPA, via Shutterstock“Three months ago, I would have said the security situation is starting to break down,” Mr. Fahmy told a local news network. “Now, I am saying it has broken down.”Addressing military leaders, the head of the Lebanese Army, Gen. Joseph Aoun, earlier this month issued a rare public criticism of the leaders in Lebanon’s sect-based political system, warning them that his soldiers were also “suffering and going hungry.”Addressing the leaders, he asked: “Where are we going? What do you intend to do?”Parliament recently authorized a $246 million loan from the World Bank to provide cash assistance to poor families, but no significant efforts have been made to stop the wider collapse.The cabinet of the departing prime minister, Hassan Diab, resigned after the disastrous explosion in the Beirut port on Aug. 4 and has yet to be replaced. That has left the government operating in a reduced, caretaker capacity for longer than it was in power.A former prime minister, Saad Hariri, was designated in October to form a new government. But he has made little progress, despite 17 meetings to discuss political horse trading with President Michel Aoun. Last Thursday, they agreed to meet again on Monday.Jihad Sabat, 48, has watched the decline from the window of the Beirut butcher shop he has run since 1997. Over the last year, he said, the price of meat has kept rising while the number of customers has dwindled.A Beirut supermarket.Mohamed Azakir/ReutersA pound of beef now costs more than three times what it would have before the crisis, he said — more than three times what it cost before the crisis. He has also seen a rise in people wanting to buy on credit and interested in taking bones to boil for soup.“Meat has become a luxury,” he said.He accused the country’s politicians of stealing the state’s money through corrupt schemes and criticized them for failing to stabilize the economy.A friend hanging out in the shop interjected, “The problem is the people.” Mr. Sabat nodded.“That’s an essential point,” he said. “If there were elections tomorrow, the same people would be back.”In the grocery store, Mr. Hassan, the manager, said his branch sold less meat every month and more lentils, even though they, too, are imported and cost five times more than before the crisis.Fights have broken out in the aisles over staples like rice, sugar and cooking oil subsidized by the government, he said. And it is common for customers to get sticker shock in the checkout lane when they realize they can afford only a few essentials.“I don’t know how people keep going,” he said. “But it will eventually cause an explosion.” More

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    A Year of Hardship, Helped and Hindered by Washington

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskNew Variants TrackerVaccine RolloutA Year of Hardship, Helped and Hindered by WashingtonFor Kathryn Stewart, a struggling single mother in Michigan, the past year showed how much safety net programs can help — and how the nation’s fickleness about them can add confusion and uncertainty to fear and worry.Credit…Supported byContinue reading the main storyFeb. 14, 2021Updated 2:57 p.m. ETWhen the coronavirus pandemic struck last March, Kathryn Stewart was working at a gas station in rural Michigan and living in her mother’s trailer with eight relatives, three dogs and a budget with no room for error. Her mother, who is disabled, soon urged her to quit to avoid bringing home the disease. Ms. Stewart reluctantly agreed, wondering how she would support herself and her 10-year-old son.An expanded safety net caught her, after being rushed into place by Congress last spring with rare bipartisan support.To her surprise, Ms. Stewart not only received unemployment insurance but a weekly bonus of $600 more than tripled her income. A stimulus check offered additional help, as did a modest food stamp increase. Despite opaque rules and confounding delays, the outpouring of government aid lifted her above the poverty line.Six months later, after temporary aid expired and deadlock in Washington returned, Ms. Stewart’s benefits fell to a trickle, and she was all but homeless after a family fight forced her from the trailer to a friend’s spare room. She skipped meals to feed her son, sold possessions to conjure cash and suffered anxiety attacks so severe they sometimes kept her in bed.Just as Ms. Stewart finally found a job, celebration turned to shock: The state demanded that she repay the jobless aid she had received, claiming she had been ineligible. That left her with an eye-popping debt of more than $12,000.“I spent the whole day just trying to breathe,” Ms. Stewart said the day the notice arrived. “I’m really confused about the whole thing. I’m trying not to panic.”At times during 2020, Kathryn Stewart was bringing in more money than ever because of government aid programs. At other times, when the aid dried up, she and her son went hungry.Credit…Brittany Greeson for The New York TimesIn the robust aid she received and its painful disappearance, Ms. Stewart’s experience captures both sides of the gyrating federal efforts to fortify the safety net in a crisis of historic proportions.As the virus ravaged jobs last spring, rapid federal action protected millions of people from hardship and showed that government can be a powerful force in reducing poverty.Yet the expiration of aid a few months later also underscored how vulnerable the needy are to partisan standoffs in an age of polarized government. Gaps in aid left families short on food and rent, uncertainty made it impossible to plan and confusion joined fear and worry.In his first weeks in office, President Biden appears to have both lessons in mind. A benefit extension passed in December expires next month, and he is urging Congress to spend big and move fast to keep 11 million workers from losing unemployment aid. Democrats are advancing his $1.9 trillion plan for stimulus and relief with a fast-track procedure that limits their policy options but increases the odds of avoiding more whipsaw delays.Critics of the spending warn it swells the national debt and erodes incentives to work. Supporters say the government’s impact has rarely seemed so direct: When help flowed at extraordinary levels, poverty fell. When it ended, poverty rose.“This could be a watershed moment,” said H. Luke Shaefer, who runs a poverty research center at the University of Michigan. “We showed how much government can do to mitigate hardship, even if the effort didn’t last.”Ms. Stewart and her son, Jack, had to rely at one point on a friend for housing.Credit…Brittany Greeson for The New York TimesWith millions still depending on government aid in a weak recovery, Ms. Stewart’s experience over the past 10 months highlights the stakes. As her complex life shows, the causes of poverty often run deep, and some lie beyond the reach of a government check. But the aid, while it lasted, broke her fall, and she is now back on her feet.In recent weeks, Ms. Stewart, 36, has been working at an Amazon warehouse and fighting Michigan’s efforts to recoup her unemployment benefits. She said she was “super happy” to no longer be at risk from another Washington impasse.An introspective woman, insightful about her hardships but distant from politics, she wonders how federal help has at once been so generous and so unsteady — a question that weighs on millions of Americans now waiting to see whether Congress moves quickly enough to sustain their benefits.“It made a huge difference in our lives,” Ms. Stewart said. “But it starts and stops and it’s really confusing. You feel helpless when you’re being helped by the government.”Should another crisis arise, she said, “I hope the government has a better plan.”Anxiety, Solitude and Then the PandemicMs. Stewart grew up accustomed to hardship and inventive in her responses. In a family too poor for vacations, she created her own by tagging along on her stepfather’s tractor-trailer runs. When he fought with her mother, she sheltered in closets. When he left, her mother tried to quell the family’s hunger with diet pills. Ms. Stewart was in grade school when panic attacks started, which she blamed on the conflict.An unsupervised adolescence followed in Grand Rapids, where Ms. Stewart slept in parks with runaways. She liked the literature of bohemians and rebels — Hunter S. Thompson and Oscar Wilde — but left school at 16 and lived in her car. Short on formal education, Ms. Stewart was long on curiosity and peripatetic instinct, which carried her from Ireland to California in between seasonal work at Michigan resorts. She dyed her hair unusual colors. She gave herself tattoos. She covered her walls with the surrealist works of Salvador Dalí, in shared faith that “you create your own reality.” Fearful of forgetting, Ms. Stewart kept a memory box, which included a middle-school note, a ukulele pick and clippings from her first mohawk.CreditMs. Stewart’s shift at an Amazon warehouse starts at 1:20 a.m. “I’m a number but a number with a paycheck,” she said.Credit…Brittany Greeson for The New York TimesIn her mid-20s, Ms. Stewart married and had a son, Jack, but her husband left and her anxiety grew. “Over the years I’ve gotten real anxious — almost afraid of people,” she said. “I’m an empath — if someone else feels bad, I feel bad.”Still, Ms. Stewart worked, most happily in solitude.By 2019, Ms. Stewart was a night janitor and living with her sister in Grand Rapids. Her sister fell behind on the rent and insisted they move in with their mother, five hours away in rural Ossineke. Ms. Stewart grudgingly succumbed. “We all rely on each other, which is good except for us not getting along,” she said.With four children and conflicting parenting styles, the trailer proved crowded and tense. When Ms. Stewart found work as a gas station cashier — $10 an hour, 20 hours a week — she welcomed the escape as much as the pay.A few weeks later, the coronavirus hit.Against All Odds, Help Was on the Way As the virus spread in early March, President Donald J. Trump insisted it posed no threat. “Jobs are booming, incomes are soaring,” he tweeted. By the next week, Disneyland and Broadway were padlocked and the stock market notched its worst daily loss in decades.While the need for Washington action was clear, the risks of an impasse were great. Liberal Democrats controlled the House, conservative Republicans held the Senate, and Mr. Trump derided the House speaker as “Crazy Nancy” Pelosi. Yet within a few weeks, they agreed on a $2.2 trillion plan.One surprise was how much it did for the poor, a class not known for political clout. Even the poorest families fully qualified for stimulus payments — $1,200 for adults, $500 for children (some Republicans had proposed giving them less) — and at the Democrats’ insistence, Congress greatly expanded jobless benefits.The existing program was filled with gaps: It covered only about a quarterof the jobless and replaced less than half their lost wages. Congress widened coverage, temporarily adding part-time workers, independent contractors and others typically excluded. And for four months it gave everyone on jobless aid a large bonus: $600 a week.The payments were more than many workers had earned on the job. Critics said the aid would discourage the jobless from seeking work, but urgency prevailed. “Gag and vote for it anyway,” the Senate leader, Mitch McConnell, advised fellow Republicans. The Senate vote was 96 to 0.Approving aid was one thing, delivering it another. Most stimulus checks arrived automatically and fast, though people who did not file tax returns had to contact the Internal Revenue Service — a procedural hurdle that kept payments from about eight million potentially eligible people, mostly low-income. Households with undocumented immigrants were barred from stimulus checks, which excluded about five million spouses and children who were citizens or legal residents.Unemployment insurance proved harder to get. With nearly 40 million claims in nine weeks, the state-run programs were overwhelmed. Computers crashed. Phone lines jammed. Governors called in the National Guard to process requests.Food shortages soared, especially among families with children as school closures deprived millions of meals. Lines outside food banks stretched for miles.The Coronavirus Outbreak More