The Indicator from Planet Money: Go Ask ALICE About Grocery Prices

Release Date: January 22, 2025
Hosts: Waylon Wong and Adrienne Ma
Produced by: NPR

1. High Grocery Prices: A Persistent Challenge

Waylon Wong and Adrienne Ma open the episode by highlighting the significant rise in grocery prices since the pandemic. Waylon Wong states, "Grocery prices are 27% higher than before the pandemic" (00:34), underscoring the tangible impact on everyday lives. This surge in prices has been a focal point of national discourse, especially during the recent presidential election, where Adrienne Ma notes, "The cost of everyday items was a major talking point in the presidential election" (00:14).

2. Introducing ALICE: Asset Limited, Income Constrained, Employed

The episode delves into a specific demographic affected by rising costs: ALICE households. Adrienne Ma introduces ALICE, an acronym for Asset Limited, Income Constrained, Employed, highlighting its relevance to many Americans struggling to make ends meet despite employment. Waylon Wong emphasizes, "ALICE describes households that earn more than the federal poverty level but can't afford the basics where they live" (05:25). This group comprises nearly 30% of U.S. households, representing a significant portion of the population facing financial strain.

3. The ALICE Index vs. Consumer Price Index (CPI)

A critical discussion revolves around the difference between traditional inflation measures and the ALICE-focused approach. Stephanie Hoopes, the national director of United for ALICE, explains, "Inflation measures the change in the cost of goods, not the actual cost. We're seeing inflation slow down, but the overall price level is still elevated" (04:04). The ALICE Essentials Index includes six fundamental categories: housing, childcare, food, transportation, health care, and basic technology. Unlike the CPI, which encompasses a broader range of goods and services, the ALICE index focuses strictly on essentials. Adrienne Ma contrasts the two by stating, "In CPI, it includes wine and full meal services and snacks out... Alice already cut those out of the budget" (06:43).

4. The Persistent Struggle of ALICE Households

The discrepancy between the ALICE index and CPI reveals why many feel economic numbers don't reflect their reality. Waylon Wong points out, "The ALICE index has consistently outpaced CPI for over a decade" (07:20). This means that while headline inflation may appear to stabilize, the essentials remain prohibitively expensive for ALICE households. Limited savings and stagnant wage growth exacerbate this issue, leaving little room for maneuvering or absorbing price increases. Adrienne Ma adds, "ALICE households have limited savings and earnings, have fewer ways to maneuver" (07:31).

5. Navigating Grocery Shopping: Insights from Bri Kellogg

The episode features Bri Kellogg, a dietitian from Beyond Hunger, who works directly with ALICE households to optimize their grocery shopping within tight budgets. During a supermarket tour near Chicago, Bri demonstrates practical strategies to manage costs without sacrificing nutritional value. For instance, when faced with high-priced asparagus at "$8 a pound," she opts for green bell peppers on sale at "$0.99 each" (03:21). Bri Kellogg shares, "We're just freeing up a little bit more room for people to make those choices by loosening up their budget a little bit" (09:13).

Bri also emphasizes the delicate balance between affordability and healthy eating. "A lot of her job is helping clients find a balance between affordability, healthy eating, and something that fits their lifestyle" (08:14). She acknowledges the necessity of processed and convenience foods for budget-conscious shoppers but strives to include fresh produce when possible. Recipes like the Fiesta Rice Skillet, which includes affordable ingredients like green bell peppers, exemplify how ALICE households can maintain healthy diets within their financial constraints.

6. Conclusion: Bridging the Gap Between Economic Indicators and Reality

In wrapping up, Waylon Wong and Adrienne Ma highlight the importance of recognizing and addressing the unique challenges faced by ALICE households. The traditional CPI fails to capture the full extent of financial strain on a substantial segment of the population. By introducing the ALICE Essentials Index, the episode emphasizes the need for more nuanced economic measures that reflect real-world experiences. As Stephanie Hoopes poignantly states, "Alice is feeling that every day" (05:05), reminding listeners that behind the numbers are individuals and families navigating a precarious economic landscape.

Key Takeaways:

• ALICE Households: Represent nearly 30% of U.S. households, struggling despite employment due to limited assets and income.

• ALICE Index: Provides a more accurate measure of inflation for essential items, consistently showing higher inflation than the CPI.

• Grocery Strategies: Practical approaches, such as choosing sale items and prioritizing essential produce, help ALICE households manage tight budgets.

• Economic Discrepancy: Traditional economic indicators may not fully capture the financial hardships faced by a significant portion of the population.

This summary captures the essence of the "Go Ask ALICE About Grocery Prices" episode, providing a comprehensive overview for those who haven't listened. Notable insights and quotes have been included to illustrate the challenges and strategies pertinent to ALICE households.