The American economy feels a bit unusual lately. Job trends are curious, the stock market has its ups and downs, and the impact of AI on work is a whole new game. But here’s a surprising number: 10.4 percent. This is how much Americans spent on food from their disposable income in 2024, according to the USDA’s Economic Research Service. That’s a dime out of every dollar.
You might feel that seems high, especially if your grocery bill has been growing. The New York Times recently reported on people spending more than a quarter of their income on food delivery. But let’s put this in perspective.
Back in 1901, the average family spent 42.5 percent of their budget purely on food. If we translate that to today’s income, it’s like spending $2,600 a month on groceries alone. Even in 1947, people spent 23 percent just on groceries. In the 1960s, the average spending hovered around 15 percent.
This drop from 42 percent to just 10 percent over the years is a significant shift in American history. It’s tied to our wealth increasing, as well as how food prices have changed. But often, this decline gets overlooked in discussions about the economy.
The statistician Ernst Engel first noted this trend in the 19th century. He observed that as people got wealthier, they spent a smaller portion of their income on food. This observation became known as Engel’s Law.
Why does this matter? The share of income spent on food can indicate overall freedom. When families spend less on food, they have more for education, health, and leisure. As food spending has declined, more money has become available for other needs.
This transformation in agriculture has played a huge role. In 1940, one American farmer fed about 19 people. Today, a single farmer can feed nearly 170. In less than 100 years, our farming productivity has exploded.
For example, corn yields, which were steady for years, took off with innovations like hybrid seeds and fertilizers. Now, yields are over seven times what they were a century ago. The USDA found that in 2019, food prices were actually 2 percent lower than in 1980, even considering improvements in quality and variety. We now have access to a diverse range of food year-round at prices that would shock our grandparents.
However, the disparity in food spending remains concerning. Data from 2023 shows that the lowest-income households devote 32.6 percent of their after-tax income to food—compared to just 8.1 percent for the wealthiest. This shows that Engel’s Law is still very much relevant.
Moreover, while food prices have risen recently due to factors like the avian flu—causing egg prices to spike by 8.5 percent in 2024—what’s important is that even during these fluctuations, Americans today are generally spending less of their income on food than in previous decades.
A recent report highlighted that younger Americans are shifting toward cooking at home more than ever, partly in response to rising grocery prices. So, when you see the headlines about skyrocketing food costs, remember that people are adjusting by eating in more often.
Yet, these advancements don’t come without their challenges. Cheaper food often leads to more ultra-processed options, which have been linked to health issues such as obesity and diabetes. The real costs of this cheap food—on our health and the environment—aren’t always visible on grocery receipts.
Despite these concerns, it’s worth recognizing the progress we’ve made. An average American family can feed itself with only about 10 percent of its income. This is a remarkable shift from what Engel observed in the past. When people can spend less on food, they open doors to better education, healthcare, and savings—leading to a richer life overall.
In a world of shifting markets and rising costs, this aspect of freedom sits at the heart of the American story.
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Culture,Economy,Food,Future Perfect,Good News,Money
