Go ask ALICE about grocery prices

Summary

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

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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.

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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.

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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.

Transcript

[NPR Host]

Npr.

[Waylon Wong]

This is the indicator from Planet Money. I'm Waylon Wong.

[Adrienne Ma]

And I'm Adrienne Ma. As a nation, we have spent so much time collectively gnashing our teeth over grocery prices and the prices of other staples. The cost of everyday items was a major talking point in the presidential election.

[Waylon Wong]

And the pain is real. Grocery prices are 27% higher than before the pandemic.

[Adrienne Ma]

And this is partly why one of President Trump's Day one executive orders was about emergency price relief to bring down the cost of living. The order was short on specifics, but did mention food, along with fuel, housing, medical care and other things.

[Waylon Wong]

The elevated prices of these essentials are at the heart of this disconnect we've seen between headline economic numbers and people's feelings about the economy.

[Adrienne Ma]

So today on the show, we look at a different way to measure inflation that's designed to capture what a lot of people experience every day at the gas station, the doctor's office and the supermarket.

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[Waylon Wong]

Last week I met Bri Kellogg at a supermarket just outside Chicago.

[Adrienne Ma]

Hi.

[Waylon Wong]

Are you Galen?

[NPR Host]

Yes.

[Bri Kellogg]

Hi.

[Waylon Wong]

Hi. Nice to meet. Nice to meet you, too.

[Adrienne Ma]

Bree's a dietitian, and she works for a nonprofit called Beyond Hunger that operates a food pantry. The nonprofit's clients include local families who are struggling economically. They come to the pantry to pick up groceries once a month.

[Waylon Wong]

Now, part of Bree's job has involved taking some of these clients on grocery store tours to help them shop.

[Adrienne Ma]

Yeah, Bree likes to start her tours in the produce section and from the jump there's a dilemma. The U.S. department of Agriculture recommends that half of what you eat every day be fruits or vegetables. But fresh produce can be expensive.

[Bri Kellogg]

It is winter in Chicago. We're in the Midwest, so you'll see now our prices have gone up a little bit, especially for some more of those summer and spring type of produce items.

[Waylon Wong]

Take asparagus. It is $8 a pound. So expensive. So Bree steers us toward a different item. Green bell peppers.

[Bri Kellogg]

One item. So the regular price is one for $2.99. And so today it is one for 99 cents.

[Adrienne Ma]

So it's like a third of the normal cost. That's pretty good.

[Waylon Wong]

Yeah. Yeah. Let's make some fajitas. So the food pantry where BRI works has seen a huge increase in clientele in the last six months. It served more people than it did in all of 2022. These numbers reflect how many people in the US struggle to afford food despite being employed and housed.

[Adrienne Ma]

And they're struggling even while the headline inflation numbers show improvement. Stephanie Hoopes is the national director of a research organization called United for Alice. And you'll learn who Alice is in just a bit.

[NPR Host]

I think it's important to remember that inflation measures the change in the cost of goods, not the actual cost. So we're seeing inflation slow down, which means that prices aren't increasing as fast. But even when, you know, inflation rates are low and everybody's saying, oh, the economy is good, you know, food is still expensive, housing is still expensive, childcare is still really expensive.

[Waylon Wong]

Stephanie is talking about the difference between inflation and the price level. The price level is the average cost of goods and services in the economy. Inflation is an increase in that price level.

[Adrienne Ma]

Right. So even if the price level isn't going up as much as it was in previous years, the overall level is still elevated. It hasn't come down in a meaningful way. Grocery prices in particular have risen faster than inflation for much of the past few years. And like we mentioned earlier, they're still 27% above their pre Covid levels.

[NPR Host]

Alice is feeling that every day.

[Waylon Wong]

All right, so it is time to meet alice. ALICE is an acronym. It stands for Asset Limited, Income Constrained, Employed.

[Adrienne Ma]

Stephanie's research organization was started by the nonprofit United Way of Northern New Jersey. After seeing a number of struggling families in the region, the organization coined the term alice.

[Waylon Wong]

It describes households that earn more than the federal poverty level but can't afford the basics where they live. Stephanie's data shows that nearly 30% of households in the US fall into this category. She Says Alice lives in every community in the US the term is new.

[NPR Host]

But it's for folks that we all already know. The bank teller, childcare, the security guard, the public transit operator, your Internet repair guy like Alice is so important in our world.

[Waylon Wong]

Alice households have little to no savings, and they have someone who's working but earning low wages. Even though pay for low wage jobs got a boost in 2021, Stephanie says those raises still weren't enough to cover the soaring cost of household essentials.

[NPR Host]

It's that feeling of, you know, you're running up a sandhill and two steps up and then you slide back down.

[Adrienne Ma]

Stephanie's organization has its own measure of inflation called the Alice Essentials Index. It's made up of six basic housing, childcare, food, transportation, health care, and basic technology.

[Waylon Wong]

And the Alice basket of goods and services looks pretty different from the one that the Bureau of Labor Statistics uses for the consumer price index. Take food, for example.

[NPR Host]

Alice is just buying the basics of, you know, cereal, milk, food at home. In cpi, it includes basic costs at home, but it also includes wine and full meal services and snacks out. And so Alice already cut those out of the budget.

[Adrienne Ma]

Alice also is not spending money on hotels or TVs, both things that are part of the CPI basket. Instead, for housing, the ALICE index tracks only rents for apartments up to two bedrooms. And for technology, the index includes just the cost of a basic home Internet plan and a smartphone plan for each adult.

[Waylon Wong]

The differences between the ALICE index and CPI speak to why inflation hasn't loosened its grip on struggling families. The ALICE index has consistently outpaced CPI for over a decade.

[Adrienne Ma]

And ALICE households, because they have limited savings and earnings, have fewer ways to maneuver. In times of higher prices, they typically can't buy in bulk or stock up.

[Waylon Wong]

They also have less wiggle room to make adjustments. Like if ordering takeout is getting too expensive, a higher earning household could cook at home more. And if organic apples and single origin coffee beans are too pricey, it could switch to cheaper brands. That is not an option for Alice.

[NPR Host]

Alice is already on the essentials. So to swap out items doesn't get you very far. So it really means that Alice needs to do without. And that's very different than doing with lower quality or a little bit less.

[Waylon Wong]

Back at the supermarket near Chicago, dietitian Bri Kellogg from the food pantry is resisting my efforts to commandeer her healthy eating tour. You're walking us past all the carbs? No bakery?

[Bri Kellogg]

Well, we're gonna talk about the difference between the produce section and the rest of the grocery store.

[Waylon Wong]

Okay, no donuts for me. Bree says a lot of her job at the food pantry is helping clients find a balance between affordability, healthy eating, and something that fits their lifestyle. Processed foods and convenience foods can often be the most budget friendly.

[Adrienne Ma]

Yeah, I mean, it's calories for cheap. Brie gets it.

[Bri Kellogg]

You know, we've heard it for years now, like you shop the perimeter.

[Adrienne Ma]

Right.

[Bri Kellogg]

But again, reality sets in and we know that we have to shop some more of those processed and packaged foods at in the middle section.

[Adrienne Ma]

Recessor Food Pantry does provide higher ticket items like fresh meat and produce, and that gives clients some relief on their grocery budget.

[Bri Kellogg]

We're just freeing up a little bit more room for people to make those choices, those educated choices that they want to make at the grocery store. So buying some of those more fun items or those top dollar items like the olive oil that they otherwise may not have been able to buy. Right. So it's all about allowing people to make these choices by just loosening up their budget a little bit.

[Waylon Wong]

Bri shares recipes with clients, too. She says a popular one is something called a Fiesta Rice skillet. It's got beans, brown rice, and a lot of veggies, including green bell peppers, which I learned today are on sale for a dollar each.

[Adrienne Ma]

So is there going to be like a quiz later? It feels like you've done a lot of studying.

[Waylon Wong]

Yeah, it's mostly just me looking longingly at the donuts. This episode was produced by Corey Bridges with engineering by Kwesi Lee. It was fact checked by Sarah Juarez and edited by Paddy Hirsch. Keegan Cannon is our show's editor and the indicator is a production of NPR.

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